Many US banks have already failed in 2009, and economists are forecasting more bank failures before the year ends. The economic crisis has hit many banks, large and small.
If you ever wanted to know what happens if your bank fails, this 60 minutes video shows how the FDIC comes in to take over banks when they fail.
3 Ways the FDIC can close a bank:
According to this video, the FDIC can close a bank one of three ways:
- Close bank and pay depositors
- Run the bank themselves
- Sell the bank to someone else to run
Of these options, the FDIC usually prefers to find another financial institution to run the bank, that way they aren’t on the line for reimbursing as many customers.
Make sure your deposits are protected
Always make sure the bank you join is a member of the FDIC, so your deposits will be covered in the event of a bank failure. If you join a credit union, make sure your credit union is a member of the NCUA, which is a similar government agency that protects deposits in credit unions.