A Southern Utah bank failed because they put too much faith in their neighbors’ ability to pay back loans. Turns out their neighbors had no intention of making good on their financial committments, because they expected either the world to end, or to move lock, stock, and barrel to Texas.
The Bank of Ephraim had profited for many years from higher-interest loans to the sect, whose members live in the twin cities of Hildale and Colorado City astride the Utah-Arizona state line. But eventually the bank “got in too deep,” investing heavily in increasingly risky ventures with sect members who “didn’t have much to lose,” Utah Banking Supervisor Jim Thomas said.
“They were locked into a community that is “not normal,” Thomas said.
The sect is one of many polygamist splinter groups in Utah and Arizona. They have more property and businesses than most, kept going on the cheap labor provided by all the progeny. It and other groups literally trade on the unquestioning faith (some would call it gullibility) of its members and other locals; no one would dream of questioning their motives or business practices, so they get away with… well, a lot.