What Should I Do When My Bank Fails?

Facts For Depositors When A Bank Fails

The former head of the FDIC has predicted that up to 500 banks will fail this year and the FDIC has 305 banks on it Problem Bank List. The average depositor usually has no way to determine if his bank will fail.  Given these circumstances, it is important to know what to do if your bank fails.

Most depositors are covered by FDIC insurance.  The FDIC was created as an independent federal agency in 1933 to protect bank depositors and thereby promote confidence and stability in the banking system.  There has never been a loss to a customer who had his deposits insured by the FDIC.

The following important facts for depositors are provided by the FDIC, in the event that your banking institution fails:

What is a bank failure?
A bank failure is the closing of a bank by a federal or state banking regulatory agency. Generally, a bank is closed when it is unable to meet its obligations to depositors and others.  The term “insured bank” means a bank insured by FDIC, including banks chartered by the federal government as well as most banks chartered by the state governments. An insured bank must display an official FDIC sign at each teller window.

What is FDIC’s role in a bank failure?
In the event of a bank failure, the FDIC acts in two capacities. First, as the insurer of the bank’s deposits, the FDIC pays insurance to the depositors up to the insurance limit. Second, the FDIC, as the “Receiver” of the failed bank, assumes the task of selling/collecting the assets of the failed bank and settling its debts, including claims for deposits in excess of the insured limit.

What is the purpose of FDIC deposit insurance?
The FDIC protects depositors’ funds in the unlikely event of the financial failure of their bank or savings institution. 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.

What is the FDIC insurance amount?
The basic insurance amount is $250,000 per depositor, per insured bank. This includes principal and accrued interest up to a total of $250,000. The $250,000 amount applies to all depositors of an insured bank.

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.

Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $250,000 at one insured bank and still be fully insured.

What does FDIC deposit insurance cover?
FDIC insurance covers deposits received at an insured bank. Types of deposit products include checking, NOW, and savings accounts, money market deposit accounts (MMDA), and time deposits such as certificates of deposit (CDs).

How am I notified when my 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.

When the failed bank is acquired by another bank; the assuming bank also notifies the depositors. This notification usually is mailed with the first bank statement after the assumption.


  1. The FDIC is fraudulent! When Glass-Steagall Act was repealed it was necessary that FDIC be revoked!! The public would have been notified of the reasons for the act and consequences it was meant to prevent!!! The necessary action to revoke FDIC was purposely and deceptively withheld from public notice!!!

    With the passage of the Glass-Steagall Act in 1933, after the 1929 stock market crash, commercial and investment banking were separated, and the FDIC was founded with an understanding that it could underwrite (insure) the commercial deposits because those funds were not being used for speculation!! When the Glass-Steagall Act was repealed in 1996 Gramm- Leachy-Bliley Act (money weight-leech-pirate act), investment banking was provided access to commercial deposits. FDIC underwriting specifically prohibits use of commercial deposits for financial investment assets and is not obligated to cover the losses!!!

    Further, if one had placed their commercial deposits in financial risk markets, the rate of interest on returns would have been appreciably greater than the trivial commercial deposit rates received during the time of the market expansion. In addition, control and leverage for the commercial deposits would have provided risk manageability. Investment institutions deceptively usurped FDIC restrictions, which allowed the banks to profit illegally and profoundly, but also allowed the banks to destroy the US and global economic systems. The US government and taxpayer is therefore entitled to seek liabilities and damages against the financial institutions.

    Thus, not only should FDIC not pay out those funds to force the issue, the politicians who purposely and deceptively failed to revoke FDIC, with the implementation of the Gramm-Leachy-Bliley- Act, should be prosecuted and impeached for malfeasance!!! The assets for the financial institutions, which corroborated to assist in the espionage and financial terrorism, should be seized and incarcerated as individuals; their responsible persons should be prosecuted, and their institutions fined to pay for the damages.

    In 1929 a special district attorney was assigned to investigate the crash and many were prosecuted!!! 70 years later such prosecutions are a ridiculous joke!!! The US citizens can convene a grand jury!!! The US citizens do not need the permission of government to prosecute these criminals under a grand jury!!! Appoint a presiding lawyer!!! Convene a grand jury!!! Prosecute the government officials if they get in the way!!!!!!!!!!!!!!!!!!


  2. Please send me a copy of the failed bank list,or a site I could print them out,I heard it is over 800 of them.Thank you

  3. Problem Bank List Staff says

    The FDIC does not publish its Problem Bank List. You can access the “unoffcial” Problem Bank List by clicking the link on Problem Bank List.

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