7 On Your Side
7 On Your Side looks into FDIC insurance
SAN FRANCISCO (KGO) -- So if you have a bank account and your bank suddenly closes on you, what do you do? 7 On Your Side checks it out.
The FDIC has insured deposits and paid on deposits with more than 2,200 times. With our down economy sparking so many recent examples of this, the staff there has this down to a science.
We've been down this road before -- bank closures and worried customers. In 2008 when IndyMac, a huge Pasadena-based bank, went under the Federal Deposit Insurance Corporation, the FDIC, issued reassurances.
"If you have insured accounts, you have nothing to worry about. You don't have to suffer any inconvenience. If you want to withdraw money, you can do that at any time," said John Bovenzi from the FDIC.
Despite that, there was an old fashioned run on the bank. Angry customers showed up to get their money.
"I want to withdraw my money. I've got a CD. I've got approximately $100,000 in IndyMac," said Steve Knieerein, an IndyMac customer at the time.
Every customer who wanted out was paid. And this time, in Walnut Creek the FDIC insurance is even more generous. $250,000 per individual accounts and if worked properly up to $3 million can be insured for a couple.
The difference with Home Savings of America is this time there is no investors willing to take over the bank. So the branches have been closed and checks are in the mail. Checks for savings and checking accounts started going out on Friday, checks for CDs started going out Monday.
Mailed from Texas the FDIC told me the checks should be in depositors' hands this week.
federal reserve, 7 on your side, michael finney
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