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News Now

CU System
Governor during Rhode Island financial crisis dies
PROVIDENCE, R.I. (7/25/11)--Former Rhode Island Gov. Bruce Sundlun, whose first acts of office in 1991 included shutting down 45 credit unions and banks after the collapse of their private deposit insurance company, has died at the age of 91. Sundlun died Thursday at his home in Jamestown, R.I. He served as governor from 1991 to 1995 during one of the state's deepest recessions and the worst banking collapse in the state's history (newsblog.projo.com July 21). The crisis occurred after Heritage Loan and Investment Bank President Joseph Mollicone and $13 million disappeared in 1990. The bank collapsed, causing a run on other banks and credit unions insured by the Rhode Island Share and Deposit Indemnity Corp. (RISDIC). That led to RISDIC's collapse. On Jan. 1, 1991, Sundlun as governor shut down the 45 institutions (News Now April 10, 2002). The closures and the struggle to find a method to pay off depositors dominated his first 18 months of office. Depositors got their money back through a $700 million bailout plan financed by state sales tax revenues. The events also changed the share insurance landscape for credit unions. Today, only one private share insurer remains.


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