Most banks that fail are taken over by the FDIC but not all. The FDIC provides information to customers about their accounts and loans and contact information regarding bank failures. Although the recession has ended the banking industry is still feeling the effects. Since January 1, 2009, ninety-nine banks have failed. A total of 24 banks failed in July 2009, 15 in August 2009 and 11 in September 2009.

The latest bank failure was the San Joaquin Bank in Bakersfield, CA on October 16, 2009. All deposit accounts were transferred to Citizens Business Bank, Ontario, CA. On Monday, October 19, 2009, the former San Joaquin Bank locations will reopen as branches of Citizens Business Bank.

Other banks that closed in October 2009 were Southern Colorado National Bank in Pueblo, CO; Jennings State Bank, Spring Grove, MN and Warren Bank, Warren, MI.

When a bank fails the FDIC acts as the insurer of the bank’s deposits and pays insurance to the depositors up to the insurance limit. The FDIC also acts as the receiver of the failed bank and sells or collects the assets of the failed bank and settles its debts.

The total amount insured per depositor per bank is $250,000 which includes principal and accrued interest on the account. The types of deposits insured are: savings, checking, NOW account, money market deposit accounts and certificate of deposits.

Any person or business is entitled to FDIC insurance on a deposit. The depositor does not have to be a U.S. citizen or a resident of the United States. This is why many foreign investors are able to deposit money in U.S. banks and why many of the foreign depositors were angry about the banking industry failure.

If a bank fails the FDIC notifies each depositor in writing. If a failed bank is acquired by another bank, the new bank notifies the depositors of the change.

I moved most of my accounts to my credit union. I prefer credit unions and am much happier with the customer service I receive. Consider moving at least part of your money to a credit union account so in the event your bank does fail in the future you will still be able to access cash quickly.