What Do You Do If the FDIC Takes Over Your Bank?

Posted on Monday, May 24, 2010

The number of insured financial institutions on the FDIC’s so-called “problem list” has risen to 775, up from 702 at the end of 2009. The total assets of problem banks have increased from $403 billion at the close of last year to $431 billion.

The FDIC says both the number and assets of problem institutions are the highest they’ve been since June 30, 1993, when they hit 793 and $467 billion, respectively. But the agency also pointed out that the latest increase in the number of problem banks is the smallest in four quarters.

The number of banks under the FDIC’s watchful eye has grown significantly since the housing crisis and recession took hold. In the fourth quarter of 2007, just 76 financial institutions were on the list, and a year ago, the number was 305.

Just which banks the federal agency considers to be at risk of collapse is shrouded in secrecy. The FDIC will not release the names of those on its “problem list” for fear that the stigma attached would cause a run on those banks, and the agency notes that a “vast majority” are able to get back on their feet.

So far this year, 72 insured banks have gone under, well on pace to surpass last year’s total of 140. By comparison, in 2008, The FDIC seized control of 25 banks. In 2007, there were only three failures.-DSNews

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