FDIC Receivership of Failed Banks:
Insured Deposit Accounts at Failed Banks  

Unclaimed Accounts / CDs / IRAs / Safe Deposit Boxes      

FDIC Failed Bank - Missing bank savings accounts


Failed Bank FDIC Insurance Frequently Asked Questions ...

 
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?


Trace and claim a lost bank account

For assistance tracing and reclaiming a lost bank account go to: Bank Account Search
For assistance finding and claiming a lost or dormant credit union account go to Credit Union Account Search
For assistance with a lost safe deposit box go to: Safe Deposit Box Search


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 FDICís 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 FDICís 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. ß 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 brokerís clients in the same institution.  Therefore, FDIC coverage applies to each of the brokerís 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 institutionís 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 institutionís 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 institutionís 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 institutionís 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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