by E. Manning

Created on: August 07, 2008

Friday has come and gone. In quiet style, another U.S. bank has been closed by the FDIC. Could your bank be next? The appearance of reality is that a number of banks will fail in the short-term without warning and likely at the end of any given week. What do you do when your bank is closed by the FDIC?

Don't panic by storming the doors. Assuming that you follow the $100,000 account rule, Uncle Sam has you covered. The FDIC has provisions to make your life much simpler without losing your cool.

In the case of First Priority Bank closed on August 1, 2008, all non-brokered deposits have been transferred to SunTrust Bank. The bank will re-open on Monday during regular business hours at the former main office and branch locations. This kind of transition is typical. Money usage is uninterrupted. The change in ownership is designed to be transparent and you maintain the right to withdraw your money based on available funds during any business day. After all, the FDIC doesn't want a loss of confidence on their hands. As a banking customer, you are well covered.

The first best thing to do is to visit the FDIC website. You will find a press release about any closed banks on the front page of the FDIC website near the top. On the press release, you will find a link that will allow you to verify the insurance status of each of your accounts. This link will be available for use no later than the first business day after bank failure.

There is a linked list of any affidavits, forms and any declarations that may relate to your bank closing along with complete instructions, assuming that you need them. In a pinch, you can call the FDIC Call Center at 800-837-0215 during posted hours, which are generally quite generous.

That is all there is to the initial process. In the case of First Priority Bank, insured funds are now in the receivership of SunTrust Bank. You aren't required to do a thing to protect your insured money. Of course, proper money management considering insurance coverage limits is always your best protection. Avoiding brokered accounts is probably good medicine as well during these troubled times to avoid needless complexity.

Buck up soldier. Unless you are a careless millionaire, you are probably well taken care of right now. But how many millionaires have bundles sitting in a bank at low or no interest? Mr. Joe Average is well protected for checking and savings. Having a fit, should you choose to have one, ought to be reserved for more serious economic situations.

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