this was send in email and I am sharing
I'm passing this along mainly for the info'. I didn't know there was a per bank limit on FDIC-insured accounts. Not sure if you all knew about this, but it's worth knowing, because this means that you could still lose money if your bank fails regardless of the increase to $250,000 on FDIC-insured accounts.
Apparently, BROKER funds also insured by the FDIC are paid in total for whatever assets they had in the failed bank; BUT personal accounts MAY NOT be totally covered. Taking care of Wall Street again, huh? What about OUR FDIC insurance?
Another Georgia Bank Seized by Feds
By Catherine Clifford, CNNMoney.com
posted: 4 HOURS 17 MINUTES AGO
NEW YORK (March 27) -- Bank regulators closed a Georgia-based bank Friday, marking the 21st bank to be shuttered this year, according to a statement from the FDIC.
Earlier in the afternoon, the Office of the Comptroller of the Currency (OCC) announced that the Federal Deposit Insurance Corporation (FDIC) was named the receiver for the Omni National Bank, based out of Atlanta, Ga.
The FDIC entered into an agreement with the SunTrust Bank, also based in Atlanta, Ga. to protect the depositors.
The FDIC expects the cost to its Deposit Insurance Fund to be $290 million.
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The failed Omni National Bank had $956 million and total deposits of $796.8 million as of March 9, 2009, according to the FDIC.
Omni National Bank, founded in 2000, had six full service branches located in Atlanta and Dalton, Ga.; Chicago, Ill.; Tampa, Fla; and Houston and Dallas, Texas.
SunTrust Bank (STI, Fortune 500) will operate the six former branches of Omni National through April 27, 2009. During the month-long transition period, banking activities will operate normally.
At the end of the 30 days, all the branches of the failed bank will close. Depositors in Georgia and Florida can open an account with SunTrust or terminate their account and receive a check, according to the FDIC. Customers of those branches will automatically be transferred to SunTrust if they do not make a decision otherwise.
Meanwhile, customers of the failed bank branches in Illinois or Texas who have not closed their accounts will automatically get a check mailed to them.
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According to the FDIC, the temporary arrangement with SunTrust bank allows for uninterrupted service with direct deposits and gives customers a cushion of time to find a new bank.
The FDIC fully insures individual accounts up to $250,000 through the end of 2009. At the time of the Omni National Bank closing, however, there were around $2 million in deposits that potentially exceeded the insurance limits, according to the FDIC, although those estimates will likely change as further information comes in from customers.
Brokered accounts are considered separately. The FDIC will pay $320.1 million in brokered deposits directly to the brokers for the total of their insured funds.
The failed bank also had two loan production offices, one located in Birmingham, Ala. and another in Philadelphia, Pa.
Federal regulators said they took control of Omni after the OCC found "the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices." The OCC also found that the bank has "depleted most of its capital," and that it couldn't "become adequately capitalized without Federal assistance."
Banks fall like flies So far in 2009, 21 banks have been shuttered. Last week, three banks were closed.
Twenty five banks failed in 2008, crippled in the wake of the housing meltdown. Plummeting home prices rendered a slew of subprime mortgages nearly worthless. As the recession took hold, unemployment surged, and default rates on loans - for homes, autos, and on credit cards - increased, further squeezing banks.
Plagued with toxic assets on their books and increasing default rates, banks started hoarding cash. With banks scared to lend money, credit pipelines virtually dried up, which only served to accelerate the rate at which the economy fell into recession.
On Monday, Treasury Secretary Timothy unveiled details of his plan to take those toxic assets off the balance sheets of banks, giving them the confidence to lend again. Geithner alluded to the plan in broad strokes last month, but investors were skeptical until they heard more specifics about the plan.
Under the new so-called "Public-Private Investment Program," taxpayer funds will be used with private investors cash to buy up toxic assets backed by mortgages and other loans. The goal of the plan is to cover at least $500 billion of assets and loans.
The FDIC has been charged with the task of overseeing the toxic-asset plan that Geithner introduced. The FDIC has already been hit hard by the increase in bank failures, and the increased rate of failures has put pressure on the FDIC's funds.
Reading this, I was reminded of a few things: Despite all the taxpayer money our government threw at the failing banks, AIG, et.al. in the bank bailout, it didn't make the toxic assets (the problem) go away. It did allow them to have some parties, give some bonuses and invest OVERSEAS, however.
So, now the government's solution is to buy all the toxic assets from the banks so the banks can get them off their books, bought with more of our (the taxpayers) money. Isn't this analagous to our paying twice for all the greed and poor decisions that created this crisis?
AND NOW, with the government's plan to sell this toxic garbage back to us (the investors, aka the taxpayers), wouldn't this be like paying three times? Is three times a charm? Who in their right mind would buy this garbage?
This is getting as ridiculous as the government's proposal to release the remaining 300-odd Guantanamo terrorist prisoners within the United States. Why here? Apparently, the ones our government has already freed by deporting them back to their respective countries have gone back to their old jobs within the terrorist network, each and every one of them! What kind of logic is this?!
I guess it's the same kind of logic used in having us pay the banks for the money they lost on toxic loans (greed), use our money to buy the toxic garbage, and then plan to sell it back to us as an investment!
Let's see ... how about the logic being used to help solve the Mexican drug problem? Specifically, what is the logic of imposing gun control on U.S. citizens in order to stop the Mexican druggies from smuggling U.S. weapons?
Am I losin' it, or is our government becoming absurdly illogical?????
Mar 31, 2009 @ 17:20:11
