Luis Pazos 
Many people have been worried about what happens when the FDIC takes over a bank, especially during this recession. There have been many bank closures, with hundreds still on the FDIC’s watch list for potential failures. Since October 1, 2000, there have been 565 bank closures as of March this year, according to the FDIC. Even though the worst might be over, you can never be sure when your bank might be taken over by the FDIC.
When the FDIC closes a bank, it typically does so quietly to avoid causing a panic among customers. They usually move in on a Friday and shut down all of the bank’s operations over the weekend. The goal is often to find another bank to take over the failed bank’s operations. If that doesn’t happen, the bank goes under FDIC conservatorship, meaning the FDIC runs the bank. Despite these measures, many banks are ready to reopen to the public the following Monday. During the weekend, the FDIC works with the bank’s employees to sort out the bank’s assets and liabilities. Other agencies, like the Office of the Comptroller of the Currency and state agencies, may also step in to help. When the bank reopens on Monday, customers can continue their banking as usual.
If the FDIC takes over your bank, your money is generally safe. Deposit accounts are insured up to $250,000 per depositor per bank. If another bank takes over, your accounts typically transfer to the new bank. If the FDIC holds conservatorship, they might cut checks to consumers and try to sell the bank’s other assets. You might have to wait some time to get your money if no bank takes over. Also, remember to update your automatic debit transactions and be aware that you might lose some interest during the wait.
Your debts won’t disappear either. They’ll either be handled by the bank taking over or sold to another lender. Investments through the bank aren’t FDIC-insured, so you might face losses there.
To sum up, your cash deposits are insured up to $250,000. However, the inconvenience and time associated with an FDIC takeover can be significant. It’s wise to regularly check your bank’s health and have a backup plan to avoid limited access to your funds.
When a bank fails and the FDIC steps in, the FDIC tries to find another bank to take over or liquidates the bank and pays out insured deposits. Your money is safe up to the insured limit of $250,000 per depositor per bank. The FDIC usually resolves failed banks quickly, and most customers can access their insured deposits within a few days. You can verify if your bank is FDIC-insured by looking for the FDIC logo or using the FDIC’s BankFind tool. Any loans you have with the failed bank will be transferred to the new bank or another lender and will still need to be repaid.
