Saving, Investing and Making Ends Meet

HOW TO KNOW YOUR BANK’S IN TROUBLE&WHAT TO DO ABOUT IT

Posted on Sunday, March 27, 2011

Background
159 failures in 2010
Florida had the most. 40% Florida banks “troubled” or “problematic”
Reasons: Economy, real estate, regulation, undercapitalized.
The Signs: How To Know
Federal Financial Institute Examination Counsel (FFIEC.gov) Uniform Bank Performance Report
Deposit money moving out. (FDIC.gov subscribe)
News: delayed earnings reports, etc, layoffs, branch closings, service cuts, fee increases
What Happens: 7 Common Questions
Background: the ‘take-over’ usually Fridays. Conservatorship (take control, oversee, maximize values for sale, continue services). 250K FDIC insurance. Purchase and Assumption verses Deposit Payoff (from Deposit Insurance Fund DIP)
1. When will I get my money? Typically 2 days. Supplemental documents.
2. What happens to my interest? Paid until take over. New bank can change rate, but you can withdraw without penalty.
3. What happens to my direct deposits (like social security checks)? Re-directed to new bank. If no new bank, to nearby bank/get information from FIC at old branch
4. What happens to uncleared checks? New bank will pay. If no new bank, returned marked ‘bank takeover’ no impact to credit
5. Can I still use my checks and deposit slips? If new bank, yes.
6. When can I get to my safe deposit box? Usually next day. If no new bank, FDIC sends letter.
7. Will my loan (such as mortgage) still be the same? Yes. Make payments as usual until directed otherwise.
How Can You Protect Yourself? 5 Take Away Tips
• Keep all account balances under $250K FIDC insurance limit.
• Keep a few days cash on hand just in case
• Don’t send payments any place else unless clearly directed by FDIC – avoid scams
• Keep copies of loan and deposit account documents and good records
• Look for a large national bank headquartered in a state that hasn’t had many failures









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