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      Response SEC 090705

      September
        7, 2005

      SENT
        VIA EDGAR

      Ms.
        Joyce Sweeney

      Senior
        Accountant

      United
        States Securities and Exchange Commission

      Division
        of Corporation Finance

      Washington,
        D.C. 20549-0408

      Re:    CFS
        Bancorp, Inc.

      Form
        10-K for the
        Fiscal Year Ended December 31, 2004

      Forms
        10-Q for the
        Quarters Ended March 31, 2005 and June 30, 2005

      File
        No.
        000-024611

      Dear
        Ms. Sweeney:

      The
        following are the responses of CFS Bancorp, Inc. (the
        Company) to the additional comments set forth in the letter of the staff of
        the Securities and Exchange Commission dated September 1, 2005 relating to
        the
        Company’s Form 10-K for the year ended December 31, 2004 (2004 Form
        10-K) and the Forms 10-Q for the quarters ended March 31, 2005 and June
        30,
        2005. For reference purposes, the text of the staff’s comment letter has been
        reproduced below in italics with the Company’s responses following immediately
        thereafter.

      Form
        10-K for the fiscal year ended December 31,
        2004

      Results
        of Operations

      Non-Interest
        Expense, page 26

      Comment
        No. 1

      We
        note your supplemental response to comment 2 of our letter
        dated August 11, 2005. Please tell us and in future filings disclose the
        following:

      • When
        you purchased the viatical receivables
        and for what consideration;

      • What
        prompted the review of the receivable
        files during the third quarter of 2004;

      • How
        it came about that you recorded the
        policies as receivables for which you were not the named beneficiary;

        • Any
          recourse provisions available to you
          related to your original purchase of the receivables; and

        • How
          you determined that the current carrying
          value of receivables is appropriate.

            Ms.
              Joyce Sweeney

            September
              7, 2005

            Page
              2 of 5

      Response to Comment No. 1

      • The
        Company purchased these receivables for an aggregate
        cash consideration of $958,000 over a period beginning in 2000 through 2003
        subsequent to the Company’s merger in July 1998 with SuburbFed Financial Corp
        (SuburbFed). Prior to the merger, SuburbFed’s wholly-owned subsidiary,
        Suburban Federal Savings Bank, a federal savings bank (Suburban
        Federal), offered and sold to its customers, as agent, viatical receivable
        investments issued by third parties. After the merger, the Company received
        numerous complaints from customers of Suburban Federal who purchased these
        investments concerning the realization of the projected return on investment.
        In
        an effort to settle the complaints, the Company offered to repurchase these
        investments from these customers. The Company generally repurchased the viatical
        receivables at the customer’s cost basis, which included the original cost plus
        premium payments in some cases.

      • In
        light of the increasing concerns surrounding the
        viatical industry, the difficulty associated with the bankruptcy of one of
        the
        viatical companies that offered these investments, and the May 2004 closure
        by
        federal and state regulators of one of the nation’s leading seller of these
        investments, uncertainty was created relative to these receivables. As a
        result
        of the uncertainty, the Company embarked upon a thorough review of its viatical
        receivables during the third quarter of 2004 to assess the reasonable
        collectibility of each receivable. The review allowed the Company to determine
        if the proper documentation as discussed below was available to continue
        to
        support the recorded carrying value.

      • The
        Company, as part of the process of repurchasing the
        viatical receivables from its customers, required a consent and assignment
        agreement to be signed by the customer naming the Company as beneficiary.
        The
        agreement was then forwarded to the respective viatical companies who owned
        the
        policies to process the change in the beneficiary with the insurer. Typically,
        the Company would receive documentation for its files naming the Company
        as
        beneficiary. However, the above-described review of the files revealed that
        not
        all the requisite documentation had been received from the viatical companies
        and/or the insurance companies to validate a transfer of beneficial interest
        for
        every policy repurchased by the Company and reflected as an asset on its
        financial statements. This was primarily due to the increasing difficulty
        that
        the Company, as well as other investors, was experiencing in obtaining
        information and documentation from the various viatical receivables companies
        regarding these investments.

      • The
        Company is not aware of recourse provisions it has
        regarding these policies.

      • The
        current carrying value of the receivables is based on
        the amount paid to the customer for the policy, which included their cost
        plus
        any premiums paid in some cases. At the time the Company purchased these
        receivables, the Company determined that the cost carrying value of the
        receivables did not exceed the estimated or expected future insurance proceeds
        of these policies.

            Ms.
              Joyce Sweeney

            September
              7, 2005

            Page
              3 of 5

      Comment
        No. 2

      Please
        provide us with your analysis of how you determined
        that this was not a correction of an error to be reported consistent with
        paragraph 36 of APB 20.

      Response
        to Comment No. 2

      The
        Company does not believe the impairment write-down possesses
        the characteristics of a correction of an error as outlined in paragraph
        13 of
        APB 20. These characteristics include errors that result from mathematical
        mistakes, mistakes in the application of accounting principles, or oversight
        or
        misuse of facts that existed at the time the financial statements were prepared.
        The impairment charge was not due to any such factors but a reflection of
        an
        analysis as a result of a number of subsequent developments concerning these
        assets. These subsequent developments raised issues regarding the value of
        the
        receivables. As discussed above, these developments included the increasing
        concerns surrounding the viatical receivable industry, the difficulty associated
        with the bankruptcy of one of the viatical companies that offered these
        investments, and the May 2004 closure by federal and state
        regulators of one of the nation’s leading seller of these investments, none
        of which occurred until some time after the Company purchased the receivables.
        As a result of the uncertainty created by these subsequent developments,
        the
        Company embarked upon a thorough review of its viatical receivables during
        the
        third quarter of 2004 to assess the reasonable collectibility of each
        receivable. In any case, the impairment charge did not relate to any of the
        factors as identified in paragraph 13 of APB 20.

      Financial
        Statements

      Consolidated
        Statements of Cash Flows, page
        51

      Comment
        No. 3

      We
        note your supplemental response to comment 3 of our letter
        dated August 11, 2005. In future filings please separately quantify sales
        of
        loans and participations for each period presented.

      Response
        to Comment No. 3

      The
        Company will, in future filings, separately quantify sales of
        loans and participations for each period presented therein.

            Ms.
              Joyce Sweeney

            September
              7, 2005

            Page
              4 of 5

      Note
        7 - Borrowed Money, page 65

      Comment
        No. 4

        We
          note your supplemental response to comment 4 of our letter
          dated August 11, 2005. Please confirm that you include both the principal
          and
          interest cash flows in your determination of NPV. Tell us how you determined
          which individual advances comprise the $75 million of debt extinguishment.

      Response
        to Comment No. 4

      Yes,
        the Company included both the principal and interest cash
        flows in its determination of NPV as presented in Exhibit 1 in the Company’s
        letter dated August 22, 2005.

      Each
        of the individual advances was restructured with an equal
        amount of new debt or with new debt and a cash repayment.  The individual
        advances comprising the $75 million of debt extinguishment consists of those
        advances that included a cash repayment with the amount of debt extinguishment
        equal to the amount of the cash repayment.

      Comment
        No. 5

      Please
        provide us with a revised substantial modification
        analysis that excludes the $75 million of extinguished debt and the related
        prepayment penalties.

      Response
        to Comment No. 5

      Please
        refer to Exhibit 1 enclosed with this letter.

      Form
        10-Q for the Quarterly Period Ended March 31,
        2005

      Changes
        in Financial Condition

      Securities,
        page 18

      Comment
        No. 6

      We
        note your supplemental responses to comments 6 and 7 of our
        letter dated August 11, 2005. Please tell us how your concern over further
        increases in long-term interest rates impacted your determination that the
        $38.9
        million of GSE securities with unrealized loss positions for 12 months or
        longer
        as of June 30, 2005 were not other-than-temporarily impaired. Tell us the
        nature
        of investments sold during the first two quarters of 2005 and the amounts
        of
        related gross realized losses. Refer to SAB Topic 5M.

      Response
        to Comment No. 6

      The
        impact of long-term interest rates was not a factor in
        determining whether the Company’s GSE securities with unrealized losses for 12
        months or longer were other-than-temporarily impaired as compared to the
        Freddie
        Mac perpetual preferred security due to the different characteristics of
        the GSE
        securities. The $38.9 million of GSE securities as of June 30, 2005 was
        comprised of eight short-term securities with maturities ranging from 11
        to 20
        months. Although the length of time the amortized cost of these securities
        exceeded their market value was greater than one year, the associated

              Ms.
                Joyce Sweeney

              September
                7, 2005

              Page 5
                of 5

        unrealized losses on these eight securities only ranged from 1.3% to
          2.0%
          of book value as compared to more than 10% with respect to the Freddie
          Mac
          perpetual preferred security. Given the short term to maturity, the Company
          believes that the market loss on these securities will decrease as each
          security
          nears its maturity.

      During
        the first two quarters of 2005, the Company sold a total of
        $38.1 million of securities for a net realized loss of $88,000. Of the total
        sold, $28.2 million were GSE securities which were sold for a gross realized
        loss of $273,000 and GSE securities totaling $964,000 which were sold for
        a
        gross realized gain of $16,000. The Company also sold collateralized mortgage
        obligations totaling $8.3 million for a gross realized gain of $177,000 and
        collateralized mortgage obligations totaling $661,000 for a gross realized
        loss
        of $8,000.

      Management’s
        Closing Comments

      Management
        of the Company acknowledges that CFS Bancorp, Inc. is
        responsible for the adequacy and accuracy of the disclosure in the Form 10-K
        for
        the year ended December 31, 2004 and in the Forms 10-Q for the quarters ended
        March 31, 2005 and June 30, 2005. Management of the Company understands that
        staff comments or changes to disclosure in response to staff comments do
        not
        foreclose the Commission from taking any action with respect to the filings.
        In
        addition, management of the Company understands that the Company may not
        assert
        staff comments as a defense in any proceeding initiated by the Commission
        or any
        person under the federal securities laws of the United States.

      As
        applicable, the Company will revise its disclosures in future
        Forms 10-K and 10-Q in accordance with your comments. If you have any questions
        regarding these responses, please direct them to me, or in my absence, to
        Joyce
        Fabisiak, Vice President - Finance and Reporting, at 219-836-5500.

      Sincerely,

      /s/
        Charles V.
        Cole

      Charles
        V. Cole

        Executive
          Vice President and

        Chief
          Financial Officer

      cc:  Matthew
        Komar, Staff
        Accountant

         Philip
        R. Bevan, Esq.

                    Exhibit
                      1

                    Remaining

                    Call
                      Date to

                    Term

                    Amount

                    Rate

                    Maturity

                    use
                      for NPV

                      (months)

                    Settle
                      Date

                    Penalty

                    NPV

                     Old
                      Cash Flows

                    3151350

                    $

                    36,000,000

                    5.95

                    %

                    03/23/10

                    64.0

                    11/23/04

                    $

                    3,898,308

                    $

                    35,966,015

                    4260722

                    25,000,000

                    5.91

                    %

                    04/28/10

                    65.1

                    11/24/04

                    2,675,501

                    24,990,441

                    5120063

                    39,000,000

                    6.34

                    %

                    05/15/10

                    02/16/10

                    65.6

                    11/26/04

                    4,996,229

                    38,914,846

                    6010441

                    25,000,000

                    6.29

                    %

                    06/07/10

                    66.4

                    11/26/04

                    3,076,059

                    24,919,153

                    6151262

                    50,000,000

                    5.94

                    %

                    06/21/10

                    66.8