Bank Closed

[GreatLakesGramma]

This morning when I got online to do my weekly check of our bank & credit card accounts, I got a big shock upon opening the log in page for our bank. Instead of the page I was expecting, this is what I saw:

Quote:

On Friday, July 16, 2010, _____ Bank, ______, MI, was closed by the Office of Thrift Supervision. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

All deposit accounts, including brokered deposits, have been transferred to ----- Bank, -----, MI. For more information on ----- Bank, visit us at www.------bank.com.

The FDIC has assembled useful information regarding your relationship with ________ Bank. Besides a checking account, you may have Certificates of Deposit, a business checking account, a Social Security direct deposit, and other relationships with the institution.

Please select the link below to read more about this event:

FDIC Bank Closing Information for _______ Bank

Online service will remain available.

I checked the FDIC site for the closing information, and learned that the bank is now operating on its normal schedule, as a branch of the new bank. We can still use our current paper checks with the old name, and we don't have to change our routing and account numbers with other online accounts yet. The bank will give us plenty of notice when it's time to make those changes.

The thing is, I chose this local, stand-alone bank because our former bank was sold twice in less than a year, and I had to go to every online direct/auto-pay and direct deposit site I use and change the numbers. The last time, I decided to switch to a local bank so I wouldn't have to go through this again.

So much for that! I'm thinking "credit union."

[phkrause]

This morning when I got online to do my weekly check of our bank & credit card accounts, I got a big shock upon opening the log in page for our bank. Instead of the page I was expecting, this is what I saw:

Quote:

On Friday, July 16, 2010, _____ Bank, ______, MI, was closed by the Office of Thrift Supervision. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

All deposit accounts, including brokered deposits, have been transferred to ----- Bank, -----, MI. For more information on ----- Bank, visit us at www.------bank.com.

The FDIC has assembled useful information regarding your relationship with ________ Bank. Besides a checking account, you may have Certificates of Deposit, a business checking account, a Social Security direct deposit, and other relationships with the institution.

Please select the link below to read more about this event:

FDIC Bank Closing Information for _______ Bank

Online service will remain available.

I checked the FDIC site for the closing information, and learned that the bank is now operating on its normal schedule, as a branch of the new bank. We can still use our current paper checks with the old name, and we don't have to change our routing and account numbers with other online accounts yet. The bank will give us plenty of notice when it's time to make those changes.

The thing is, I chose this local, stand-alone bank because our former bank was sold twice in less than a year, and I had to go to every online direct/auto-pay and direct deposit site I use and change the numbers. The last time, I decided to switch to a local bank so I wouldn't have to go through this again.

So much for that! I'm thinking "credit union."

Well that rots big time, sorry to hear that. doesn't really matter there all in bad shape.

[Outta Here]

We've used a local credit union for 25 years. Having had a few experiences with banks as well, we'd NEVER use a bank as our primary financial institution if we have the choice. Our credit union has always been available to us as needed, and the rates are better than elsewhere.

[Tom Wetmore]

Same here, for 25+ years, with no regrets. Credit unions are a very good alternative.

[rudywoofs (Pam)]

GLG, my local bank has changed hands 4 times since I first began using it back in the '70's. Now it's part of a large bank system. I find it more difficult to do transactions. The bankers don't know their customers personally anymore...I miss that. Nowadays everything is so impersonal.

[GreatLakesGramma]

The more I have thought about it, the more I have been leaning toward a credit union. However, googling credit unions for my local area only turned up three of them, whereas just a couple of months ago, there were four. And opening the sites for each credit union, one of them goes to a different credit union. Searching for further information, I find that credit unions are in the same boat as banks. Several have also been closed by the NCUA this year. So I'm not sure it would be any more secure.

[Tom Wetmore]

Credit unions can and do run into financial trouble too. But I believe the premise of nonprofit member collective "ownership" of credit unions overcomes the over-emphasis on shareholder profits of bank operation that can too easily lapse into primal greed mode. Credit unions are designed to serve the interests of their members (account holders). Banks have to balance that against their primary goal of profit for shareholders, many, if not most, of whom are not even costumers of the bank.

I also believe that NCUA does a better job of regulating credit unions than the FDIC does of banks. (It should be noted that some credit unions are state chartered and regulated by a state governmental agency rather than NCUA.) Not perfect, but better.

I served as a credit union board member (including vice chair, and chair of several subcommittees) for 10+ years. I have seen all this first hand through good times and bad. I know whereof I speak.

[GreatLakesGramma]

I've been looking up more information, and I'm becoming more convinced that a credit union is the best way to go. I've belonged to other kinds of co-ops, and I like the concept.

Next week, when I go to town, I'm going to stop in at each of the credit unions and get all the information. It may be a hard decision to choose between them.

[Woody]

There's usually very little difference from one CU to another from my humble experience.

[GreatLakesGramma]

One of them is very localized, only one branch besides the main office here. The other is based in a much larger city & has 4 branches besides the main office. The larger one has a better website, more user friendly with more detailed information. It also lists more services and discounts, including being on a nationwide co-op ATM network. The smaller one is the one that has the NCUA symbol at the bottom of their page. I'll want all the information they may not have listed before I choose.

[Dr. Shane]

Quote:

With a traditional bank, you’ve got the Federal Deposit Insurance Corporation (FDIC) looking out for you. Late last year, Congress temporarily increased the basic FDIC insurance coverage limit from $100,000 to $250,000. This change is scheduled to remain in effect throughout 2009. The National Credit Union Administration (NCUA) is the FDIC of the credit union world, and they also increased their coverage limits in 2008.

The biggest thing you want to look at is the “hassle factor” if your institution goes broke and closes up shop. I haven’t done business with big banks for years, primarily because of the awful customer service you get at most of them. I like local, community banks, and I believe whole-heartedly in credit unions. As a rule, these institutions practice excellent customer service. Plus, most of them didn’t get mixed up the sub-prime debacle.

Community banks and credit unions are both safe, and in most cases, they’re both fabulous places to put your money!

-Dave

Banks Versus Credit Unions

[GreatLakesGramma]

It certainly has given me reason to make some changes. If the FDIC hadn't found another bank willing to buy ours, we may have been unable to access our checking account for awhile. I guess I need to figure out how much cash we'd need for a month, and keep it here at home in our fireproof lockbox.

I've read that recommendation before, but I like getting interest. Even at the current low rate, it's still money we wouldn't have otherwise, and even small amounts do add up.