Regulators Shut Down 4 More US Banks
January 30th, 2010
So far in 2009, 14 banks have been shut down. Last year, the FDIC seized 140 banks – compared to three during 2007.
As unemployment increases and signs of economic recovery slow, it is expected that more banks will be seized this year. The FDIC seizes a bank when it is unable to meet obligations of depositors.
Typically, when the FDIC seizes a bank, they already have another bank lined up to purchase the assets of the troubled bank. If not the FDIC is responsible for providing depositors with their insured funds.
If there is no purchaser available for the troubled bank, the FDIC has every intention of getting insured funds into the hands of depositors within 2 days. The only groups of people that may experience delays are those who have money deposited in the name of a trust.
Others that could experience longer delays getting their money back from a failed bank are those that deposit money through a fiduciary. For instance, many brokerage firms “sell” CD’s. If they sell you a CD and a bank fails, the fiduciary will receive money from the FDIC and then distribute that money to you.
Of the four banks closed today, two were in Georgia, one was in Florida and the last was in California. All four of the failed banks have financial institutions lined up to purchase their assets. This means that depositors will have uninterrupted access to their accounts through the new financial institution.
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