The Federal Deposit Insurance Corp. has fallen on difficult times following the failure of 95 banks in 2009. As things in the financial industry still remain uneasy, practically every expert believes it’s a question of when — not if — the FDIC will run out of money.
How will the FDIC get money to survive these difficult times? According to the Associated Press, the leading idea at the moment calls for the FDIC to require banks to prepay premiums. One rumored plan has the FDIC asking for three years of prepaid premiums.
Currently, the FDIC has said that they generate about $12 …read more

Following the recent lawsuit filed against BBVA Compass Bank and general concern surrounding deceptive bank practices involving overdraft fees, the Federal Deposit Insurance Corporation has called for tight restrictions on fees charged for overdrawn checking accounts. Separately, many of the nation’s largest banks have already announced their plans to revisit overdraft policies.
However, FDIC Chair Sheila Blair has raised the concern that banks may not be going far enough in their restrictions of these fees. She has called on the Federal Reserve to finalize the rulemaking portion of the overdraft reform, but the Federal Reserve maintains that it is still unsure …read more

Georgian Bank, a bank based in the city of Atlanta, has been shut down by federal regulators. The closure marks the failed bank number 95 in 2009.
The FDIC took over the bank and is expected to lose about $900 million in doing so. Georgian Bank had about $2 billion in assets as of the final week of July.
The five branches of Georgian Bank will be taken over by First Citizens Bank and Trust Co. — a bank based in the state of South Carolina. All five branches will open on Monday under the new name.
Not only will the number of …read more

On Monday, Bank of America announced that it has agreed to a deal with the United States federal government to terminate its term sheet agreement. To terminate the agreement, Bank of America will pay $425 million. The money will go to the FDIC, the Federal Reserve and the Treasury Department.
This agreement was originally constructed after Bank of America acquired Merrill Lynch at the beginning of the year. In the agreement, the federal government guaranteed nearly $120 billion in assets. However, Kenneth Lewis, the CEO and President of Bank of America, believes that his company has the means to thrive on …read more

Two more banks failed in the United States on Friday — pushing the yearly total of bank failures to 94. Friday’s failed banks were located in the states of Kentucky and Indiana.
Kentucky’s failed bank was the Louisville-based Irwin Bank FSB, while Indiana’s failed bank was the Columbus-based Irwin Union Bank and Trust Co.
Both of the failed banks will be assumed by Ohio’s First Financial Bank after reaching an agreement with the Federal Deposit Insurance Corp.
Irwin Bank FSB and Irwin Union Bank and Trust Co. had more than two dozen branches. Each of the branches will be reopened …read more

In an all-too-common move, the Missouri Division of Finance has decided to close the First Bank of Kansas City on Friday, appointing the Federal Deposit Insurance Corporation as its receiver. The FDIC has entered into an agreement with Kansas’s Great American Bank that will allow the bank to assume the deposits and buy the assets of First Bank, which will then reopen as a Great American Bank Branch.
 
As of June 30, the First Bank of Kansas City was responsible for $16 million in assets and $15 million in deposits in its only branch. The FDIC will continue insuring the deposits …read more

So far in 2009, 77 banks have failed, testaments to the withering strength of the recession and the severe impact of the financial crisis. However, the Federal Deposit Insurance Corporation has also found itself struggling to make ends meet, finding it difficult to accomplish its goal of reimbursing those depositors with money in failed banks.
On average, the FDIC has had to pay 34 percent of each failed bank’s assets in order to make reparations to depositors of the banks. The Community Bank of Nevada required the highest percentage of payment, with $1.52 billion in assets and a cost of $781.5 …read more

Where do you keep your money? Is it safe?

Another week, another set of bank failures in the United States. Today, five more banks failed, which lifts the number of bank failures in 2009 to 69. Each of the five banks were in different states.
The five states that saw banks fail on Friday were Illinois, Oklahoma, Ohio, New Jersey and Florida.
In Illinois, Mutual Bank failed. The FDIC decided that United Central Bank will receive the deposits. United Central Bank, which is located in Texas, will reopen the 12 Mutual Bank branches.
First State Bank was the Oklahoma bank that bit the dust. Located in the city of Altus, their branches …read more

There have now been three more bank failures than there are states in the United States, and bank failure number 53 has taken place in a state that has not experienced a single bank failure since 1991. The Bank of Wyoming, based in Thermopolis, was closed yesterday by federal regulators.
According to the Federal Deposit Insurance Corporation, Lander, Wyoming’s Central Bank and Trust has agreed to assimilate Bank of Wyoming’s deposits. Bank of Wyoming was responsible for $70 million worth of assets and $67 million in deposits.
The FDIC will be forced to pay about $27 million out of its insurance fund …read more