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0 pointsPlasmoid12y ago0 comments

The bigger risk if your poor is not having access to your money while the FDIC sorts out the problems. Now, I don't know how long it would take to restore access to your money in a bank closure but, for a lot of these people, having your funds frozen for a week or two would be crippling.

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shawn-furyan12y ago· 1 in thread

There was a This American Life episode during the financial crisis when interest in bank failures was high. They followed an federal takeover of a bank, and from what I recall, it was an extremely swift and surgical procedure. The don't inform the bank ahead of time when they're going to take it over, because the last thing they want is a bank run. For that reason they also try to disrupt banking hours as little as possible if at all.

[edit: here's the episode, very interesting listen: http://www.thisamericanlife.org/radio-archives/episode/377/S...]

ben104012y ago

There are also instances though where the FDIC can't find another bank willing to acquire the failed institution, so it can't just close on a Friday and then reopen on Monday as a branch of a new bank.

One of those happened just last week:

http://www.fdic.gov/bank/individual/failed/commbank-ct.html

So it seems like in an instance like this, while you get a check for your insured deposits from the FDIC, your bank is gone and presumably any auto-debits or outstanding checks would fail to clear. You get to wait for the FDIC to mail you a check. Then you'd have to find yourself a new bank. This seems like something that would be fairly disruptive even if you are not poor.

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