Processing deposit accounts in a bank failure

Earlier this year, the FDIC began trying to lure roughly 25 retirees like Holloway back to prepare for an increase in bank failures. It’s also hiring about 75 new staff.

In this slow economy, even banks are feeling the pinch. The FDIC shut down one northwest Arkansas bank system. Arkansas National Bank, that had nine branches in the Bentonville area was shut down Friday.

Hume Bank, Hume, Missouri, was closed today by the Commissioner of Missouri's Division of Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect depositors, the FDIC Board of Directors approved the assumption of Hume Bank's insured deposits by Security Bank, Rich Hill, Missouri. The failed bank's sole office will reopen Monday as a branch of Security Bank. Depositors of Hume Bank will automatically become depositors of the assuming bank. As of December 31, 2007, Hume Bank had total assets of $18.7 million and total deposits of $13.6 million. Security Bank has agreed to assume $12.5 million of the failed bank's insured deposits for a premium of 4.26 percent.

As if the economy wasn't already fighting enough strong headwinds, the risk of capital shortfalls and outright failure of the nation's banks is rising. The Federal Deposit Insurance Corp., the federal agency that backs bank deposits, last week reported the biggest jump in "problem institutions" it has seen since the savings and loan crisis of the late 1980s. While the extent of the problem is still low by historic standards, it identified 76 banks as in trouble - a 52% increase from a year ago.

Despite NT$2.5 billion (US$80.4 million) in cash on hand, the credit unit of the Shulin Farmers' Association (樹林農會) in Taipei County has suffered a bank run after more than 700 depositors withdrew a total of NT$840 million as of yesterday morning, a government official said. "NT$140 million was withdrawn through the association's ATMs during the weekend and some NT$700 million was withdrawn before noon," Lai Wu-chi (賴武吉), director-general of the Council of Agriculture's bureau of agricultural finance, said during a telephone interview yesterday.

Summary: The FDIC is proposing the attached two-part rulemaking relating to the potential failure of an FDIC-insured depository institution: The first part of the proposal would govern how and at what point deposit account balances would be determined in the event of a failure, and applies to all FDIC- insured depository institutions. The second part proposes requirements to facilitate the process for determining the insurance status of depositors of large insured depository institutions in the event of failure. Comments on the Notice of Proposed Rulemaking are due by April 14, 2008.