In the old days, banking hours were from 10:00 am until 3:00 pm, except Friday.
On Friday banks stayed open till 6:00 pm giving working people extra time to deposit their hard-earned paychecks and get a little cash for the weekend. Banks were never open on Saturday or Sunday!
Then the world of banking changed. But, has it changed for the better?
Sure, banking has become more convenient; longer hours, seven days a week, ATM’s. They’ve increased their services and products. But over the last ten years they’ve increased their deception, over-leveraging, and taken greater risks with their depositors money. The results; foreclosures beyond our imagination.
The FDIC took Christmas Day off or it could have been even worse.
As a result of taking the day off, not a single bank was closed on Friday, December 25th. The ten (10) they assumed the previous two weeks brought the 2009 total to 140; six more from the four states with the most failures.
Georgia (25), Illinois (21), California (16), and Florida (14) account for 55% of the bank failures in 2009. But very few states escaped the tenacity of the Federal Deposit Insurance Corporation this year. The FDIC Bank Watchlist increased to 552 last quarter. Eighteen (18) states lost no banks in 2009; although Arkansas and West Virginia each lost a bank in 2008. Hawaii has not had a bank foreclosed on since October of 2000. Louisiana, Tennessee, and Connecticut each lost a bank back in 2002. There are twelve states that have not lost a bank since the current list posted by the FDIC begins in 2000.
Georgia and California had five (5) banks each seized in 2008 accounting for 40% of all the foreclosures that year. IndyMac, based in Pasadena, California, was the largest bank seized by the FDIC in 2008, with an *asterisk, and cost the Federal Deposit Insurance Fund nearly $9 billion. Colonial Bank of Montgomery, Alabama was the largest bank taken over in 2009 at $25 billion. But, incredibly, it only cost the Fund $2.8 billion.
The * in 2008? Washington Mutual was by far the largest foreclosure of the year with $307 billion in assets. But the quick sale to JP Morgan Chase left the FDIC with zero liabilities. Two other banks, both giants and dwarfing IndyMac, avoided foreclosures when the FDIC was able to find buyers in the 11th hour. Wells Fargo snatched Wachovia away from Citi with a better proposal and PNC Financial got a sweet deal to take-over National City Corp, then the 10th largest bank in the nation, in the closing days of the year.
So what does the landscape look like for 2010? What can we realistically expect? Read the rest of this entry »