I received a letter in the mail on Saturday from the FDIC stating that my bank, Amtrust Bank had been taken over by the FDIC on December 4, 2009 and as of January 1, 2010 my mortgage loan would be serviced by another bank.
Amtrust Bank was founded in 1889 and headquartered in Ohio. AmTrust Bank was the second largest thrift in the U.S., a subsidiary of New York Community Bancorp, Inc (NYCB). AmTrust Bank had 29 branches in northeast Ohio, 25 branches in Southern Florida, and 12 branches in Phoenix Arizona, 124 branches in New York and 53 branches in New Jersey totaling 243 branch offices. AmTrust bank had approximately $42 billion in assets.
As a personal finance expert and coach I assumed I was immune from my mortgage company closing. Amtrust was a bank for boasted of customers with good credit; they provided large loans to investors and other companies. They had a good track record and financial reports, and they had been in business for over 120 years - yet they too fall into the trap of greed and profit and lost their focus. They have been added to the list of FDIC bank closures which totals 140 so far in 2009.
If you are a customer of Amtrust visit their website or contact the FDIC to get more information about your account. Here are 10 tips to help you if your bank has closed or gone bankrupt.
1. Call the FDIC or visit their website to get information about your bank if it was FDIC insured.
2. Check with your bank to get the status of any outstanding checks written to your old bank.
3. Contact the new bank to ask about the status of your account and verify your account balance and standing.
4. Always have at least $100 in cash on hand in the event your bank closes and you are not allowed to access your account.
5. Don't wait until the last minute to pay bills, pay bills at least 7-10 days before the due date.
6. Have multiple bank accounts (checking and savings) so if a problem occurs with one account you can access the other account and still conduct transactions if needed.
7. Do business with FDIC insured banks only.
8. Consider opening an account with a credit union.
9. Look at the bank or mortgage company's financial history for the past five years. If the company revenue has been steadily declining you might want to consider switching banks.
10. Perform bank transactions early in the morning. This ensures your deposit will be applied the same day. Don't wait until the last minute to make transactions; this increases the chance that your transaction may not be applied to your account the same day and may cause a check to bounce.
Showing posts with label bank failure. Show all posts
Showing posts with label bank failure. Show all posts
Wednesday, December 23, 2009
Wednesday, November 11, 2009
What the CIT Bankruptcy Means for You
CIT, the 100 year old and 5th largest bank in the U.S. filed for Chapter 11 bankruptcy Nov. 1, blaming losses on subprime mortgages and decreasing credit markets. CIT listed $71 billion in assets and $64.9 billion in liabilities.
CIT funds approximately 1 million businesses such as Dunkin’ Brands Inc. didn’t include CIT Bank in bankruptcy filing. The CIT bankruptcy is the one of largest bankruptcies in the U.S.
The government has input billions of dollars into CIT including giving $2.3 billion last fall. Citigroup received $45 billion in loans from the government, which now owns a 34% interest in the bank. Citigroup plans to sell some of its assets including its interest in Smith Barney.
CIT customers should be nervous because as a customer you don't know what the future holds for CIT. The company assures its customers that it will be business as usual and that customers should not take their business elsewhere because of the bankruptcy. Unfortunately, if most of their customers leave CIT will not be able to survive.
CIT 2,000 vendors that supply merchandise to 300,000 stores. According to analysts approximately 60% of the apparel industry depends on CIT for financing so the bankruptcy will cause a domino effect for businesses and customers who shop at their stores.
As my grandmother used to say "never have all your eggs in one basket". If you have all of your money in CIT I recommend moving at least some of it to a more stable bank like PNC, BB&T or a credit union.
No one knows the future of CIT but my guess is it will collapse like the other companies such as Lehman Brother and Washington Mutual.
CIT funds approximately 1 million businesses such as Dunkin’ Brands Inc. didn’t include CIT Bank in bankruptcy filing. The CIT bankruptcy is the one of largest bankruptcies in the U.S.
The government has input billions of dollars into CIT including giving $2.3 billion last fall. Citigroup received $45 billion in loans from the government, which now owns a 34% interest in the bank. Citigroup plans to sell some of its assets including its interest in Smith Barney.
CIT customers should be nervous because as a customer you don't know what the future holds for CIT. The company assures its customers that it will be business as usual and that customers should not take their business elsewhere because of the bankruptcy. Unfortunately, if most of their customers leave CIT will not be able to survive.
CIT 2,000 vendors that supply merchandise to 300,000 stores. According to analysts approximately 60% of the apparel industry depends on CIT for financing so the bankruptcy will cause a domino effect for businesses and customers who shop at their stores.
As my grandmother used to say "never have all your eggs in one basket". If you have all of your money in CIT I recommend moving at least some of it to a more stable bank like PNC, BB&T or a credit union.
No one knows the future of CIT but my guess is it will collapse like the other companies such as Lehman Brother and Washington Mutual.
Sunday, October 18, 2009
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.
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.
Saturday, August 22, 2009
Safe Banks in 2009
A total of over 77 banks have closed in 2009 and counting. According to Dick (Richard Bove), a financial analyst for Rochdale Securities who has been the securities business since 1965 another 150 to 200 banks fail. In 2008, he was ranked by Zacks as the top financial analyst in the country.
He created a list called Bove's List which I talked about in my blog on July 20, 2008 entitled, "Check to See if Your Bank is on Bove's List". Some of the banks listed in his March 2008 report have closed or are still in financial trouble. Bove has identified 8 banks that he likes. The banks are: Bank of NY Mellon, Northern Trust, State Street, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JP Chase Morgan.
As a comparison, in 1987, the FDIC listed 1,575 problem banks and more than 10% of the banks were on the FDIC problem list. In 1987, 184 banks failed. The FDIC reports that number of troubled banks 252, soared during the fourth quarter of 2008 to the highest level since 1994.
BankUnited FSB is the largest bank failure in 2009 in terms of the percentage loss on failed bank’s assets. The two previous largest bank failures in the history of banking, in terms of loss to the FDIC, were Indy Mac Bank in July 2008 and American S&L in September 1988.
According to a Global Finance banks across the world were ranked. In the study 50 of the world's safest banks are identified. One bank in the US was listed in the top 20, Bank of NY Mellon (BK). Wells Fargo was also listed in the top 50 and in another report was listed as the best consumer internet bank. Other banks listed in the top 50 safest banks were US Bancorp and BB&T.
Here are 4 tips to help you research your bank's health.
1. If you bank has closed check the FDIC website to see if it is FDIC insured.
2. Move at least some of your money to a credit union or a smaller bank or banks such as PNC or BB&T that did not invest in the sub-prime mortgage loans.
3. Do research on your current banks and look at the earnings over the past two to three years as well as the number of branches that have closed.
4. Put your money in more than one bank. As your grandmother used to say "never leave all your eggs in one basket."
The following banks closed in 2009.
Guaranty Bank
CapitalSouth Bank
First Coweta Bank
ebank
Community Bank of Nevada
Community Bank of Arizona
Union Bank, National Association
Colonial Bank
Dwelling House Savings and Loan Association
Community First Bank
Community National Bank of Sarasota County
First State Bank
Mutual Bank
First BankAmericano
Peoples Community Bank
Integrity Bank
First State Bank of Altus
Security Bank of Jones County
Security Bank of Houston County
Security Bank of Bibb County
Security Bank of North Metro
Security Bank of North Fulton
Security Bank of Gwinnett County
Waterford Village Bank
Temecula Valley Bank
Vineyard Bank
BankFirst
First Piedmont Bank
Bank of Wyoming
Founders Bank
Millennium State Bank of Texas
First National Bank of Danville
Elizabeth State Bank
Rock River Bank
First State Bank of Winchester
John Warner Bank
Mirae Bank
MetroPacific Bank
Horizon Bank
Neighborhood Community Bank
Community Bank of West Georgia
First National Bank of Anthony
Cooperative Bank
Southern Community Bank
Bank of Lincolnwood
Citizens National Bank
Strategic Capital Bank
BankUnited, FSB
Westsound Bank
America West Bank
Citizens Community Bank
Silverton Bank, NA
First Bank of Idaho
First Bank of Beverly Hills
Michigan Heritage Bank
American Southern Bank
Great Basin Bank of Nevada
American Sterling Bank
New Frontier Bank
Cape Fear Bank
Omni National Bank
TeamBank, NA
Colorado National Bank
FirstCity Bank
Freedom Bank of Georgia
Security Savings Bank
Heritage Community Bank
Silver Falls Bank
Pinnacle Bank of Oregon
Corn Belt Bank & Trust Co.
Riverside Bank of the Gulf Coast
Sherman County Bank
County Bank
Alliance Bank
FirstBank Financial Services
Ocala National Bank
Suburban FSB
MagnetBank
1st Centennial Bank
Bank of Clark County
National Bank of Commerce
He created a list called Bove's List which I talked about in my blog on July 20, 2008 entitled, "Check to See if Your Bank is on Bove's List". Some of the banks listed in his March 2008 report have closed or are still in financial trouble. Bove has identified 8 banks that he likes. The banks are: Bank of NY Mellon, Northern Trust, State Street, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JP Chase Morgan.
As a comparison, in 1987, the FDIC listed 1,575 problem banks and more than 10% of the banks were on the FDIC problem list. In 1987, 184 banks failed. The FDIC reports that number of troubled banks 252, soared during the fourth quarter of 2008 to the highest level since 1994.
BankUnited FSB is the largest bank failure in 2009 in terms of the percentage loss on failed bank’s assets. The two previous largest bank failures in the history of banking, in terms of loss to the FDIC, were Indy Mac Bank in July 2008 and American S&L in September 1988.
According to a Global Finance banks across the world were ranked. In the study 50 of the world's safest banks are identified. One bank in the US was listed in the top 20, Bank of NY Mellon (BK). Wells Fargo was also listed in the top 50 and in another report was listed as the best consumer internet bank. Other banks listed in the top 50 safest banks were US Bancorp and BB&T.
Here are 4 tips to help you research your bank's health.
1. If you bank has closed check the FDIC website to see if it is FDIC insured.
2. Move at least some of your money to a credit union or a smaller bank or banks such as PNC or BB&T that did not invest in the sub-prime mortgage loans.
3. Do research on your current banks and look at the earnings over the past two to three years as well as the number of branches that have closed.
4. Put your money in more than one bank. As your grandmother used to say "never leave all your eggs in one basket."
The following banks closed in 2009.
Guaranty Bank
CapitalSouth Bank
First Coweta Bank
ebank
Community Bank of Nevada
Community Bank of Arizona
Union Bank, National Association
Colonial Bank
Dwelling House Savings and Loan Association
Community First Bank
Community National Bank of Sarasota County
First State Bank
Mutual Bank
First BankAmericano
Peoples Community Bank
Integrity Bank
First State Bank of Altus
Security Bank of Jones County
Security Bank of Houston County
Security Bank of Bibb County
Security Bank of North Metro
Security Bank of North Fulton
Security Bank of Gwinnett County
Waterford Village Bank
Temecula Valley Bank
Vineyard Bank
BankFirst
First Piedmont Bank
Bank of Wyoming
Founders Bank
Millennium State Bank of Texas
First National Bank of Danville
Elizabeth State Bank
Rock River Bank
First State Bank of Winchester
John Warner Bank
Mirae Bank
MetroPacific Bank
Horizon Bank
Neighborhood Community Bank
Community Bank of West Georgia
First National Bank of Anthony
Cooperative Bank
Southern Community Bank
Bank of Lincolnwood
Citizens National Bank
Strategic Capital Bank
BankUnited, FSB
Westsound Bank
America West Bank
Citizens Community Bank
Silverton Bank, NA
First Bank of Idaho
First Bank of Beverly Hills
Michigan Heritage Bank
American Southern Bank
Great Basin Bank of Nevada
American Sterling Bank
New Frontier Bank
Cape Fear Bank
Omni National Bank
TeamBank, NA
Colorado National Bank
FirstCity Bank
Freedom Bank of Georgia
Security Savings Bank
Heritage Community Bank
Silver Falls Bank
Pinnacle Bank of Oregon
Corn Belt Bank & Trust Co.
Riverside Bank of the Gulf Coast
Sherman County Bank
County Bank
Alliance Bank
FirstBank Financial Services
Ocala National Bank
Suburban FSB
MagnetBank
1st Centennial Bank
Bank of Clark County
National Bank of Commerce
Sunday, May 17, 2009
How Bank Bailout Money Was Used for Lobbying Congress
Congress is considering credit card legislation to help consumers. However some members of Congress believe that the banking and financial industries have too much influence on members of Congress. Unfortunately the banking industries does have a great influence on Congress which is not good for consumers. Some banks increased the amount of money spent on lobbyists last year including Wells Fargo and Bank of New York Mellon Corp.
Some of the top recipients of contributions from companies receiving TARP money are members of Congress who chair committees tasked with regulating the financial industry and overseeing the effectiveness of TARP program including Senator Chris Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs who received $854,200 from the companies in the 2008 election. Senator Max Baucus, chair of the Senate Finance Committee received $279,000.
Members of the Senate Finance Committee and House Financial Services Committee and Senate Committee on Banking, Housing and Urban Affairs, received $5.2 million from TARP recipients in the 2007-2008 election cycle.
The 300 or so companies that have been received aid from TARP, 26 of them paid lobbyists $76.7 million to represent them on Capitol Hill in 2008. The 161 companies approved for TARP money gave $37.5 million to federal candidates, parties and committees in the 2007-2008 election.
Bank of America spent $14.5 million towards campaign contributions for Congress, received $45 billion from the bailout and spent $8.78 million on lobbying. Citigroup was also one of the top companies that spent the most, $12.5 on lobbying expenses and campaign contributions, and received $50 billion from the bailout. American Express spent $3.79 million and M&T Bank spent $10,000 on lobbying.
The top 10 companies that received the $700 billion bailout spent $9.5 million on federal lobbying during the first 3 months of the 2009. Citigroup Inc. and JPMorgan Chase & Co. spent over $1 million in lobbying. Bank of America Corp spent $660,000 in lobbying, Wells Fargo $700,000 in lobbying, PNC Financial Services Group, spent $135,000, and U.S. Bancorp spent $170,000 on lobbying.
Write your state congressman and representative and voice your opinion about the banking and financial industry lobbyists.
Some of the top recipients of contributions from companies receiving TARP money are members of Congress who chair committees tasked with regulating the financial industry and overseeing the effectiveness of TARP program including Senator Chris Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs who received $854,200 from the companies in the 2008 election. Senator Max Baucus, chair of the Senate Finance Committee received $279,000.
Members of the Senate Finance Committee and House Financial Services Committee and Senate Committee on Banking, Housing and Urban Affairs, received $5.2 million from TARP recipients in the 2007-2008 election cycle.
The 300 or so companies that have been received aid from TARP, 26 of them paid lobbyists $76.7 million to represent them on Capitol Hill in 2008. The 161 companies approved for TARP money gave $37.5 million to federal candidates, parties and committees in the 2007-2008 election.
Bank of America spent $14.5 million towards campaign contributions for Congress, received $45 billion from the bailout and spent $8.78 million on lobbying. Citigroup was also one of the top companies that spent the most, $12.5 on lobbying expenses and campaign contributions, and received $50 billion from the bailout. American Express spent $3.79 million and M&T Bank spent $10,000 on lobbying.
The top 10 companies that received the $700 billion bailout spent $9.5 million on federal lobbying during the first 3 months of the 2009. Citigroup Inc. and JPMorgan Chase & Co. spent over $1 million in lobbying. Bank of America Corp spent $660,000 in lobbying, Wells Fargo $700,000 in lobbying, PNC Financial Services Group, spent $135,000, and U.S. Bancorp spent $170,000 on lobbying.
Write your state congressman and representative and voice your opinion about the banking and financial industry lobbyists.
Saturday, February 07, 2009
What the IndyMAC Sell Means
The FDIC announced last month that it would sell IndyMAC to a group of private investment firms for $13.9 billion. The buyers include J.C. Flowers & Co. and hedge fund Paulson & Co plus several other firms.
The bank will be controlled by IMB Management Holdings and managed by Steven Mnuchin, who is chair and co-chief executive of Dune Capital Management. Terry Laughlin, will serve as chief executive of IndyMac and previously headed Merrill Lynch Bank & Trust.
The failure of IndyMac bank will cost the FDIC between $8.5 billion and $9.4 billion and the deal is expected to close within the next three months.
The private buyers will put $1.3 billion in capital into the IndyMAC bank. IMB Management has agreed to continue the streamlined loan modification program that FDIC Chairman Sheila Bair put into place to continue to receive the FDIC's loan loss protection.
The IndyMac loan modification program will assist homeowners who are experiencing problems by adjusting their mortgage payments to no more than 38% of their monthly income. This is achieved by either reducing the interest rate or extending the length of the loan.
According to the FDIC, more than 8,500 mortgages have been modified and over 9,400 are in the process of being modified. The new bank will have 33 branches in the Los Angeles area.
The bank will be controlled by IMB Management Holdings and managed by Steven Mnuchin, who is chair and co-chief executive of Dune Capital Management. Terry Laughlin, will serve as chief executive of IndyMac and previously headed Merrill Lynch Bank & Trust.
The failure of IndyMac bank will cost the FDIC between $8.5 billion and $9.4 billion and the deal is expected to close within the next three months.
The private buyers will put $1.3 billion in capital into the IndyMAC bank. IMB Management has agreed to continue the streamlined loan modification program that FDIC Chairman Sheila Bair put into place to continue to receive the FDIC's loan loss protection.
The IndyMac loan modification program will assist homeowners who are experiencing problems by adjusting their mortgage payments to no more than 38% of their monthly income. This is achieved by either reducing the interest rate or extending the length of the loan.
According to the FDIC, more than 8,500 mortgages have been modified and over 9,400 are in the process of being modified. The new bank will have 33 branches in the Los Angeles area.
Monday, September 29, 2008
Wachoiva : Another Bank Failure and How it Affects You
Wachovia was seized by the government and on September 29, 2008, and was bought by Citigroup. Wachovia has 3,300 retail offices in 21 states with 40 international offices. Citigroup will pay Wachovia $2.1 billion to pay for its subordinated debt (a debt obligation whose holder is placed in precedence below secured and general creditors) which basically means the debts bought by Citigroup will be paid after Wachovia's secured debt and debt owed to their creditors is paid. It will also assume $53 billion of Wachovia senior and subordinated debt. The buy will make Citigroup the largest bank in the US. The buy should be complete by the end of 2008.
Wachovia states that "Customers of both companies should continue banking as usual, and feel confident that their deposits are secure. Also, employees and vendors should continue to operate business as usual."
To down play the severity of the buy of Wachovia by Citigroup they use terms that the average consumer may not understand. When you visit the Wachovia website a blurb states "Wachovia announces bank subsidiary divestitures to Citigroup."
What does this mean? I am a customer of Wachovia and it saddens me that messages like this appear. Press releases and other messages should be explained in a manner so that all customers of Wachovia understand exactly what the buy by Citigroup means to them.
Divestitures are the sales of business holdings of a company. Citigroup purchased the retail bank, corporate and investment bank and wealth management businesses (divestitures) of Wachovia.
Wachovia investors will receive approximately $1 of Citigroup stock for each of their Wachovia shares of stock. For now, it appears that it is business as usual at Wachovia so don't take your money out of the bank.
Some Wachovia bank branches may close within the next year when Citigroup takes over the 3,300 retail offices. This will have a devasting effect on the Charlotte area where Wachovia is headquartered.
I advise all Wachovia customers to keep an eye on their account balances and monitor the behavior of your local branch staff to see if they started acting differently or see if you can pick up on hints about the health of the company.
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