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What would you do if your bank was failing?

olds

olds

Elite Member
I would think something like this might cause a run on the bank.

A struggling Nevada City bank has been hit with a warning notice by federal regulators over its weakened financial state.

Citizens Bank of Northern California was given a "prompt corrective action directive" by the Federal Deposit Insurance Corp. The notice went out in late June but wasn't disclosed by the FDIC until today.

The FDIC ordered the bank to sell enough stock to become "adequately capitalized" or agree to be sold altogether to another bank.

The bank's president Gary Gall couldn't be immediately reached for comment.

The bank lost $1.4 million in the first quarter, according to the FDIC.


http://www.sacbee.com/2011/07/29/3804333/fdic-issues-warning-to-nevada.html
 
Wasn't there a movie about this?

Just ask people, nicely, to only take out the money they need. It worked great!
 
oldsmoboat said:
I would think something like this might cause a run on the bank.

A struggling Nevada City bank has been hit with a warning notice by federal regulators over its weakened financial state.

Citizens Bank of Northern California was given a "prompt corrective action directive" by the Federal Deposit Insurance Corp. The notice went out in late June but wasn't disclosed by the FDIC until today.

The FDIC ordered the bank to sell enough stock to become "adequately capitalized" or agree to be sold altogether to another bank.

The bank's president Gary Gall couldn't be immediately reached for comment.

The bank lost $1.4 million in the first quarter, according to the FDIC.


http://www.sacbee.com/2011/07/29/3804333/fdic-issues-warning-to-nevada.html
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Fear Monger 🙂 Yeah, this would suck
 
Probably nothing. The next bank will swoop in and you'll see no change other than a new sign on the door.
 
If I had less than the FDIC max I wouldn't worry too much, but I'd definitely consider moving my stuff into another bank.

While my local credit union wasn't that bad they started doing things that made me think they weren't doing well. Closing down branches, less ATMs, more fees, signing everyone up for new services that had monthly fees which you had to opt out of, etc. Now everything but a checking count is at USAA.
 
arcenite said:
I guess so... But maybe that only worked because the bank wasn't FDIC insured. More proof that more federal regulation is not good!
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Actually FDIC is one of those things that has largely worked the way it is supposed to work. The S&L crisis was brought about due to poorly run S&L's in states that didn't require them to be part of the SLIC.
 
I'd immediately open an account at another bank and switch my paycheck to it and transfer any savings I have to it. Moving the mortgage and stuff would probably be a huge headache, so I'd probably just setup an auto transfer so money goes to that bank from my new bank, so I can pay it.

Though, say a bank does fail, and you have any debts such as a loan or mortgage with that bank, what happens?
 
Bateluer said:
Pretty sure you'd still going to be liable for those, you'll just be sending the checks to a different address.
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Yes, the bank's mortgages and other debts still have value. They'll be sold off to other banks as a way to recoup some of the money that is needed to cover the bank's own debts.
 
Bateluer said:
Pretty sure you'd still going to be liable for those, you'll just be sending the checks to a different address.
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Ah I see, so you would not lose your house or anything, but some kind of collection agency would probably take over I take it?

But really, the odds of a major bank failing is probably quite slim, and the government would probably not allow it.
 
Red Squirrel said:
Ah I see, so you would not lose your house or anything, but some kind of collection agency would probably take over I take it?

But really, the odds of a major bank failing is probably quite slim, and the government would probably not allow it.
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Most likely it would be another bank that would buy it and add it to their portfolio of mortgages.
 
Fuck...not again.

When WaMu went under, we made the mistake of not jumping ship before Chase took over.
Worst customer service ever...even worse than Bank of America.

We left within 2 months of the change.
 
there's enough competition in banking that i'd take my money out and go elsewhere. no need to suffer through their malfeasance.
 
1) Look for a new job

2) It depends. I wouldn't worry about FDIC insured deposits, but I would definitely worry about credit counterparty risk.

Disclosure: I work for a large commercial bank (that's what makes #1 funny!)
 
BoomerD said:
Fuck...not again.

When WaMu went under, we made the mistake of not jumping ship before Chase took over.
Worst customer service ever...even worse than Bank of America.

We left within 2 months of the change.
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Yep. Same here. Chase is HORRIBLE.
 
Nintendesert said:
You'd need money before you need a bank.
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True. I think the most I've ever had at any given time is a bit under $30k, just after my grandmother died and left us a little. No where near that much now. I imagine I'd probably start to get nervous if I ever had six-figures worth just laying around.
 
I rather have my money stored in a bank than at home. Imagine a house fire or something taking away all your life savings. Sure they make fire safes and what not, but it only takes a really bad luck moment where you didn't close the door or something and a fire happens to break out that day.

Though, this makes me think, it's probably not a bad idea to keep like 1000 bucks in a safe in $20 bills, just in case. Perhaps a large scale ATM outage that lasts for weeks or something. Unlikely, but it could happen.
 
Red Squirrel said:
I rather have my money stored in a bank than at home. Imagine a house fire or something taking away all your life savings. Sure they make fire safes and what not, but it only takes a really bad luck moment where you didn't close the door or something and a fire happens to break out that day.

Though, this makes me think, it's probably not a bad idea to keep like 1000 bucks in a safe in $20 bills, just in case. Perhaps a large scale ATM outage that lasts for weeks or something. Unlikely, but it could happen.
Click to expand...

High quality safes at more than one location keeps you pretty well protected against catastrophic losses.
 
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