Bank Failures: 25 Things Everyone with a Bank Account Needs to Know

bank failure

By Patrick Russo

A bank failure regularly occurs when a bank’s assets become less valuable than its liabilities. The value of an institution’s assets can diminish for a number of reasons, including an increase of noncurrent loans, a decrease in deposits, or a decrease in the loan loss allowance amount on its books. Some banks are able to recover before the FDIC (Federal Deposit Insurance Corporation) boards up the windows, but on many occasions the government regulatory agency quickly steps in and closes down operations in an attempt to minimize economic damages. The FDIC has closed 16 banks down so far this year, and so as not to waste an opportunity to learn from these failure


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8 Responses to Bank Failures: 25 Things Everyone with a Bank Account Needs to Know

  1. Christina says:

    Look at Fitch Safety Ratings for your bank before it goes under so you don’t scramble. An E- rating for our mortgagor, plus crappy web security rules (mandatory changing of passwords every 60 days to LOOK at our mortgage balance) and a tempting offer somewhere else led us to switch to a credit union. We also closed our child’s savings account with moribund interest from a failing bank and moved his cash to an account with 6% interest, at a credit union.

    “The 2008 banking collapse was a combination of regulatory error and willful ignorance at the tops of big banks.”
    Overleveraging of real estate development loans can do in smaller, regional banks.

  2. danny says:

    What credit union is giving you 6%? Is this a special kid’s account, or is it available to anyone? Is there a limit on the amount that gets 6%? More details please!

  3. Patrick says:


    I can’t speak for Christina’s specific account, but there are indeed some credit unions offering those rates on children’s savings accounts. In fact, there are a handful offering up to 7% interest.

    Currently, however, most (if not all) of these offerings come with tight membership restrictions and low maximum balances that are eligible for the high interest rate (usually $500, $1k, or $2k). You can check them out here:

  4. Christina says:

    Hello Danny:

    BECU (formerly Boeing Employees Credit Union) is offering 6% on minors’ savings accounts up to balance of $500, and also for general savings accounts up to balance of $500.

    Credit unions membership restrictions have loosened from about the peak of the bank failures era: in many cases one now merely has to work, live or own property in the state the credit union is headquartered or otherwise has branches in. Here’s a link that may be helpful for people searching for a credit union close to home.

  5. danny says:

    Your link doesn’t work — could you give it to me again?

  6. Christina says: is the URL for the Credit Union Locator

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