The Alabama State Banking Board is to meet Wednesday for what could be the death knell for Colonial BancGroup Inc.

At the meeting, Colonial will be formally asked to consent to be taken into receivership by the Federal Deposit Insurance Corp., should regulators decide such action is necessary.

Colonial said July 31 that its existence was in jeopardy after a $600 million quarterly loss, an inability to satisfy requirements under a cease-and-desist order and a capital infusion that fell through.

The FDIC typically decides on Wednesdays which banks it will close two days later.

Colonial complicated a capital bailout further, announcing that it is the subject of a criminal investigation by the Department of Justice over alleged accounting irregularities in its mortgage warehouse operations.

The company's Orlando office for such operations was raided last week by federal authorities.

Taylor, Bean & Whitaker Mortgage Corp., which unsuccessfully tried to buy Colonial, also had its main office raided.

The Ocala, Fla., mortgage lender last week said that it would stop originating loans after being cut off by its main secondary market outlets.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.