With the well-publicized economic downturn, it is no surprise that many people these days are worried about their finances, and about the safety of their savings.  This office receives a great many calls from people wanting to know if their bank is a safe and secure place for their money. 

First, both State bank regulators and federal bank regulators are prohibited by law from disclosing information about the financial health of specific banks.  That is because of the overarching need for a safe, sound, orderly banking system.  If consumers were told specific banks had problems, regardless of the severity of those problems, there would be a serious risk of a “run” on those banks identified as being troubled.  Most troubled banks do not fail.

We can, however, speak generally to the health and safety of the industry as a whole.  In that regard, we can say that, with a very few exceptions,  North Carolina’s banks are in safe and sound condition, and deposits in all of them are insured up to $250,000 for each insured entity by the Federal Deposit Insurance Corporation.  In no case has a depositor lost a dime of their insured deposits in the more than 70 years since the FDIC was formed.

In the case of commercial noninterest-bearing transaction accounts, such as lawyers and real estate brokers’ trust funds, the insurance has been extended to the full balance of those accounts, without limit.

If you have more than $250,000 to deposit, it may be prudent to consider spreading the deposits among a number of different banks to ensure you have no more than $250,000 in any one institution, thereby eliminating the risk of any loss.

For more detailed information regarding your deposits and FDIC insurance, we recommend you visit the FDIC’s official website at www.FDIC.gov.  Information on the FDIC’s recently increased deposit insurance coverage can be found on the right side of the home page by clicking on “Temporary Liquidity Guaranty Program,” which details the recent enhancements to FDIC insurance, including the increase of individual depositor coverage from $100,000 to $250,000 through December 31, 2009.

The FDIC also issued FAQs for its rules governing deposit accounts in the event of a bank failure. The rules establish practices for determining deposit and other account balances at a failed depository institution and include disclosure requirements for certain sweep accounts that went into effect on July 1, 2009. For more information, please visit: http://www.fdic.gov/news/news/financial/2009/fil09039a.html.