[Polygamist] Mormons who banked on doomsday find the debt collector at the door

The Independent/December 11, 2004
By David Usborne

If the 9,000 members of a polygamous Mormon sect in south-west Utah felt comfortable borrowing from their local bank like there was no tomorrow, it was because, in their minds, that was precisely the case. The world, they had been told, was coming to an end.

The Fundamentalist Church of Jesus Christ of Latter-day Saints gladly used high-interest funds to finance suspect business ventures. There was the water melon farm on which not a single water melon was planted, and plans to convert old military barracks into homes fell through when they found lead paint and asbestos inside. Now, though, the tap has been turned off. After years of obliging the sect, the local Bank of Ephraim has been forced to shut down after state regulators found it could no longer handle all the loans it had extended.

It was only after the crackdown in June that the bank's president, Keith Church, discovered the truth. Several years ago, the sect, led by a recluse named Warren Jeffs, rumoured to have 70 wives, made members take an oath to drain the bank as fast as possible because doomsday, just around the corner, would see the world and its financial system collapse.

How the Bank of Ephraim, the community's only financial institution, allowed itself to get in so deep is now the subject of several investigations. When closed, it had loans out to the sect valued at about $18m (£9.4m), or roughly 90 per cent of its total loan portfolio.

Mr Church blames the state regulators. He claims that for years they turned a blind eye and only began moving against the sect as part of a state-wide effort to hunt down polygamists in the run-up to the 2002 Salt Lake City Winter Olympics.

What the sect's leader may have to say about the debacle is anyone's guess. Recent reports suggest that Mr Jeffs has left the area for a 1,600-acre compound El Dorado, Texas. Local officials predict an exodus of the flock from Utah.