What is the FDIC?
How many bank failures have
there been?
How do I know if my bank is on
the FDIC watch list of troubled banks?
What is
deposit Insurance?
How does the FDIC pay for
Deposit Insurance?
What types of investments does FDIC
deposit insurance cover?
What are the current deposit
insurance limits?
Are multiple
accounts in the same name at different branches of the same bank insured
separately?
Are non-US residents
covered by FDIC deposit insurance?
Are accounts at credit unions insured by the FDIC?
What is the NCUSIF?
How to I find out if I'm owed money by the NCUA arising from a credit
union liquidation?
What happens when an
FDIC-insured bank fails?
How are depositors
notified when a bank has been closed?
What happens when a failed bank with
federal deposit insurance is liquidated?
What is an FDIC Dividend?
What are the four major types of FDIC Dividends?
Who is entitled to receive an FDIC Dividend?
How often are FDIC dividends paid?
How do I determine if a
dividend has been declared on my failed bank?
What is a brokered deposit?
Are there time limits on
claims? How long do I have to claim an insured deposit transferred by the
FDIC to another bank?
What happens to a safe
deposit box at a closed bank?
What happens if my bank merged with
another that subsequently failed?
What occurs when the FDIC is appointed Receiver?
When the FDIC acts as conservator and charters a new bank, does the 18 month time limit apply for
depositors to come forward to claim their insured accounts?
What
happens to unclaimed insured deposits?
What occurs when the FDIC is
appointed Conservator?
Do I
continue to earn interest on my account or CD when my bank fails?
If I had a CD
(certificate of Deposit) at a failed bank that was transferred, can I withdraw
the funds without penalty?
What
happens if I had an outstanding check drawn on an account at a bank that
failure before the check was cashed?
What
happens to my automated deposits and withdrawals when my bank fails?
Do I
still have ATM access my accounts when my bank fails?
I had a
loan with a failed bank. What happens?
I was a
stockholder in a failed bank. Is my equity Interest protected?
I was a
bondholder in a failed bank. Is my equity Interest protected?
I
performed service for a failed bank. I am a creditor, having delivered
goods or performed services. What happens?
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What is the FDIC?
The Federal Deposit
Insurance Corporation (FDIC) is an independent agency of the United States
government that protects against the loss of insured deposits if an
FDIC-insured bank or savings association fails. FDIC deposit insurance is
backed by the full faith and credit of the United States government.
How many bank failures have
there been?
There has been at least
one failure every year since insurance operations began in 1934, with more than
1,400 banks and 700 savings institutions closing between 1982 and 1992
alone. There were 25 failures in 2008 including the
largest ever, Washington Mutual with $182 billion in deposits. Prior to WaMu,
the largest failure was Continental Illinois, with $30 billion in
deposits. At least 117 other banks holding $78 billion in questionable
assets are currently on the FDIC’s secret list of problem institutions.
How do I know if my bank is on
the FDIC watch list of troubled banks?
The names of these institutions are not
made public to avoid causing any undue panic which might exacerbate the
danger and cause a run on the bank.
What is
deposit Insurance?
The FDIC administers insurance funds responsible for
protecting depositors from losses when banks fail.
FDIC
deposit insurance covers the balance of each depositor's account,
dollar-for-dollar, up to the insurance limit, including principal and any
accrued interest through the date of the insured bank's closing.
How does the FDIC pay for
Deposit Insurance?
The FDIC’s deposit insurance
fund consists of premiums already paid by insured banks and interest
earnings on its investment portfolio of U.S. Treasury securities. No
federal or state tax revenues are involved.
What types of investments does FDIC
deposit insurance cover?
FDIC insurance
covers funds in deposit accounts, including checking and savings accounts,
money market deposit accounts and CDs (certificates of deposit).
What are the current deposit
insurance limits?
The
Emergency
Economic Stabilization Act of 2008 -
enacted October 3, 2008
-
temporarily authorized increased deposit
insurance coverage between October 3, 2008 and December 31, 2009.
Single Accounts
(owned by one person): $250,000
Joint Accounts (two or more persons) $250,000
IRAs and certain other retirement accounts: $250,000
Trust Accounts: $250,000 per owner per beneficiary subject to specific
limitations and requirements
Prior to this emergency increase, and
subsequent to expiration of the aforementioned act, deposit insurance
covers $100,000 for individual and joint accounts, $250,000 for IRAs and
certain other retirement accounts.
Are multiple
accounts in the same name at different branches of the same bank insured
separately?
No, deposits in separate
branches of an insured bank are not separately insured. Deposits in one
insured bank are insured separately from deposits in another insured bank.
Deposit ownership may be structured, however, to provide increased
insurance coverage over the individual limit.
Are non-US residents
covered by FDIC deposit insurance?
Any
person or entity can have FDIC insurance on a deposit. A depositor does
not have to be a citizen or a resident of the United States.
Are accounts at credit
unions insured by the FDIC?
No. The National Credit Union Administration (NCUA) is the federal agency
that administers the National Credit Union Share Insurance Fund (NCUSIF)
NCUA is an independent agency that supervises and insures over 7,329
federal credit unions and 4,538 state-chartered credit unions.
What is the NCUSIF?
The NCUSIF insures
member savings in federally insured credit unions, which account for
approximately 98 percent of all credit unions. All federal credit unions
and the majority of state-chartered credit unions are covered by NCUSIF
insurance protection.
When a federally-insured credit union is
liquidated, NCUA's Asset Liquidation Management Center assumes
responsibility for paying share accounts to members. The National Credit
Union Share Insurance Fund insures member deposits up to a $100,000 limit,
which has been temporarily increased to $250,000 until December 31, 2009
by the Emergency Economic Stabilization Act of 2008.
Share accounts claimed within an 18-month
insurance period are paid the full insured amount. After the 18-month
insurance period, unclaimed shares are considered uninsured and are
written down to subsidize any losses incurred. In the rare event a
liquidation results in surplus funds, shareholders may be entitled to
receive an additional distribution.
How to I find out if I'm
owed money by the NCUA arising from a credit union liquidation?
Contact:
National Credit Union Administration
Asset Liquidation Management Center
4807 Spicewood Springs Road, Suite 5100
Austin, TX 78759
What happens when an
FDIC-insured bank fails?
When
a bank is unable to meet its obligations to depositors and others, the
FDIC steps in to make good on deposits up to the insurance limit,
and acts as Receiver of the failed bank, assuming the task of
liquidating the assets of the failed bank and paying creditors, where
possible, to depositors who had accounts valued in excess of the
insured limit, and then to creditors and others if any amounts remain.
The failed institution is typically closed
after the close of business on a Friday, and reopens the following Monday
either as a new branch of the acquiring institution in cases where an
acquirer has been found; or as a newly charted federal bank with the FDIC
acting as Conservator, in the event there is no acquirer.
How are depositors
notified when a bank has been closed?
The
FDIC notifies each depositor in writing using the depositor's address on
record with the bank. This notification is mailed immediately after the
bank closes. Additionally, the news media is advised via press release,
and notice is posted at the bank.
What happens when a failed bank with
federal deposit insurance is liquidated?
The FDIC resolution division is responsible for paying:
unclaimed
insured deposits up to the statutory limits; any dividends declared on
excess deposits over the statutory limits; any dividends declared on
general creditor claims; and any remaining funds distributed to the
shareholders of the failed institution.
What is an FDIC Dividend?
When a financial institution is closed and
the FDIC is appointed as receiver, one of FDIC's responsibilities is to
sell the institution's assets to pay the depositors and its creditors. If
there is any excess cash generated by the disposition of these assets less
disposition cost and reserves met, a dividend is declared and distributed
to the claimants.
What are the four major types of FDIC Dividends
Advance: Dividends paid to proven uninsured depositors (usually paid
within 30 days of closing). The FDIC Board of Directors authorizes the
percentage of dividends for this type of dividend.
Traditional: Dividends paid from the net proceeds derived from
converting assets of the institution to cash. Such a dividend may be
declared for uninsured depositors and unsecured creditors with proven
claims, and others in order of their priority. This type of dividend is
the most commonly used.
Initial: A hybrid of the Advance and Traditional dividends. This
dividend is based on the dollar amount paid for the assets assumed by the
acquiring institution less appropriate reserves. The Initial dividend is
paid as soon as possible after the institution is closed and paid to the
proven uninsured depositors, generally within a few weeks.
Post Insolvency Interest:
This dividend is paid once a
receivership has paid 100% of the principal on the uninsured Depositor and
General Creditor Claims.
Who is entitled to receive
an FDIC Dividend:
Prior to August 10, 1993 the law in effect at the time the institution
failed determined the priority in which the proven claimants received
dividends. All receiverships established after August 10, 1993, must
distribute dividends according to the Federal Deposit Insurance Act, 12
U.S.C. § 1821(d)(11)(A), which mandates the following priorities:
Administrative expenses of the Receiver; Any deposit liability of the
institution; Any other general or senior liability of the institution; Any
subordinated obligations; Any obligations to the shareholders or members
(including holding companies and their creditors).
How often are FDIC dividends paid?
The FDIC conducts quarterly reviews of the financial statements of the
receivership to determine if sufficient funds are available to pay
dividends, and as additional funds become available, dividends may be
declared. Disbursements for dividends less than $25.00 are held until the
aggregate total dividend exceeds $25.00.
How do I determine if a
dividend has been declared on my failed bank?
Go to:
http://www2.fdic.gov/divweb/index.asp
What is a brokered deposit?
Custodial deposits held in
the name of a broker on behalf of their investors and deposited in an FDIC
insured financial institution are covered by federal deposit insurance,
the same as if the funds had been deposited directly by the broker’s
clients in the same institution. Therefore, FDIC coverage applies to each
of the broker’s clients (pass-through insurance coverage), up to the
deposit insurance limit.
Claims, however,
may take some additional time
to be processed. The FDIC requires the broker who opened the deposit
account to provide ownership information after an insured financial
institution fails before insurance funds are made available. It is
important that you contact you broker to ensure the necessary paperwork
has been submitted.
Are there time limits on
claims? How long do I have to claim an insured deposit transferred by the
FDIC to another bank?
If an insured deposit is
transferred to a successor bank the depositor has 18 months to claim the
funds from the successor. After the 18 month period the funds are
returned to the FDIC and FDIC turns the funds over to the state for a
period of 10 years. If the funds are not claimed at the state during that
10 year period the money is returned to the FDIC and the depositor can no
longer claim the funds.
What happens to a safe
deposit box at a closed bank?
The boxes are
transferred to the assuming institution. If FDIC cannot find an assuming
institution box holders are asked to remove the contents. If the box
holder does not remove the contents, the box is drilled open and the
contents turned over to the state unclaimed property administrator in the
state where the box holder lived at the
time the bank failed. The time frame for this depends on how long
the FDIC remains at the
failed bank site.
What happens if my bank merged with
another that subsequently failed?
Accounts at banks which have merged into an institution that subsequently
failed are covered by deposit insurance up to the statutory limits, with
the following important caveat:
If
the account was an insured deposit transferred from an institution that
previously failed to an institution where the depositor already has an
existing account, the FDIC generally provides full insurance for a period
of six months after the failure, in the event the depositor exceeds the
statutory deposit limits.
When the FDIC acts as conservator and charters a new bank, does the 18 month time limit apply for
depositors to come forward to claim their insured accounts?
Yes, a depositor have contact the successor bank within 18 months to avoid having the account
remitted to a state
unclaimed property administrator.
What
happens to unclaimed insured deposits?
In many instances these funds remain unclaimed because: The insured
deposit is never claimed from the assuming financial institution; The
dividend check on the excess deposit amount is not cashed; The dividend
check on the general creditor claim is not cashed; The check to the
shareholder is not cashed; A valid address is not on file and the dividend
check has been returned to the FDIC
The
database for this site contains unclaimed funds for either unclaimed
insured deposits (for receiverships established between January 1, 1989
and June 28, 1993), or for dividend checks issued which were undeliverable
or never cashed. As receiverships are terminated, under Federal Law 12
U.S.C., 1822(e); see also Pub. L. No. 103-44, section 2(b) unclaimed
insured funds can no longer be claimed and data will be removed from the
website.
Dividends, however, for uninsured portions of a deposit might be claimed
post termination if a dividend check was returned for a bad address.
To initiate a search go
to: http://www2.fdic.gov/funds/index.asp
What occurs when the FDIC is appointed Receiver?
The powers of the FDIC as
receiver of a failed institution are similar to those of a bankruptcy
trustee. A receivership is designed to market the assets of a failed
institution, liquidate them, and distribute the proceeds to the
institution’s creditors. The FDIC as receiver succeeds to the rights,
powers, and privileges of the institution and its stockholders, officers,
and directors. The FDIC may collect all obligations and money due to the
institution, preserve or liquidate its assets and property, and perform
any other function of the institution consistent with its appointment.
A receiver also has the
power to merge a failed institution with another insured depository
institution and to transfer its assets and liabilities without the consent
or approval of any other agency, court, or party with contractual rights.
Furthermore, a receiver may form a new institution, such as a bridge bank,
to take over the assets and liabilities of the failed institution, or it
may sell or pledge the assets of the failed institution to the FDIC in its
corporate capacity.
A depository institution’s charter
determines which state or federal regulatory agency will appoint a
conservator or a receiver for a failing institution.2 For federal savings
associations and national banks, the Office of Thrift Supervision and the
Office of the Comptroller of the Currency, respectively, are the
chartering authorities responsible for determining when the appointment of
a receiver is necessary.
The FDIC must be appointed as receiver for
insured federal savings associations and national banks. For state
chartered savings and loan associations or banks, the FDIC may accept
appointment as receiver by the appropriate state regulatory authority, but
it is not required to do so.
In the case of state chartered banks that
are members of the Federal Reserve System, the state banking authority may
also appoint the FDIC as receiver. In certain limited instances, the FDIC
may appoint itself as receiver for a state chartered insured depository
institution.
Immediately after its appointment, the FDIC
as receiver must notify the failed institution’s creditors (which include
customers with uninsured deposits) to submit their claims to the receiver.
The FDIC arranges for a notice to be published in a local newspaper
stating that the financial institution has failed and how claimants may
file their claims. The receiver must also mail notices to file claims to
all creditors identified in the institution’s records. All claimants,
including those who may have been suing the failed institution, must then
file proof of their claims with the receiver by a specified deadline. Once
a claim has been filed, the receiver has 180 days to determine if the
claim should be allowed. If the receiver is not satisfied that the claim
has merit, the claim will be disallowed.
What occurs when the FDIC is
appointed Conservator?
The
FDIC acts as guardian to manage the affairs of an institution to maximize
it's value for a future sale, if possible.
Do I
continue to earn interest on my account or CD when my bank fails?
The answer is generally
'yes" until at least the date of closure, however rates can and generally are
adjusted by the assuming institution.
f I had a CD
(certificate of Deposit) at a failed bank that was transferred, can I
withdraw the funds without penalty?
Yes, you may withdraw funds without penalty
prior to the expiration of the term of the CD, as originally set by
the failed bank.
What
happens if I had an outstanding check drawn on an account at a bank that
failure before the check was cashed?
Checks are processed as
usual. All outstanding checks will be paid against your available insured
balance as if no change had occurred.
What
happens to my automated deposits and withdrawals when my bank fails?
Your automatic
direct deposits and/or automatic withdrawals should be transferred
automatically to the successor bank. You should, however, however, contact
the acquirer to discuss your account) and to
insure that service is not delayed or discontinued.
When the FDIC acts as conservator and charters a new bank, does the 18 month time limit apply for
depositors to come forward to claim their insured accounts?
Yes.
I
had a loan
with a failed bank. What happens?
If you had a
loan with a failed bank, you should continue to make your payments as
usual. The terms of your loan will not change under the terms of the loan
contract because they are contractually agreed to in your promissory note
with the failed institution. Checks should be made to your former bank
and sent to the same address until further notice.
I
was a bondholder in a failed bank. Is my equity Interest protected?
In accordance with federal law,
allowed claims will be paid, after administrative expenses, in the
following order of priority: depositors, general unsecured creditors,
subordinated debt holders and stockholders.
I was a
stockholder in a failed bank. Is my equity Interest protected?
In accordance with federal law,
allowed claims will be paid, after administrative expenses, in the
following order of priority: depositors, general unsecured creditors,
subordinated debt holders and stockholders.
I
performed service for a failed bank. I am a creditor, having delivered
goods or performed services. What happens?
In accordance with federal law,
allowed claims will be paid, after administrative expenses, in the
following order of priority: depositors, general unsecured creditors,
subordinated debt holders and stockholders.
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