Friday, April 8, 2011

This Week in Bank Failures

A federal government shutdown is expected to be ordered tonight, and there is a chance that the shutdown could last for a week or longer. If it comes to that, bank failures do continue during a government shutdown. State banking regulators and the FDIC aren’t affected by the government shutdown. Federal banking regulators are still obliged to close a bank well before the bank is forced to close its doors on its own, regardless of a government shutdown.

Opinions of Portugal’s creditworthiness have declined so much that banks in that country say they are no longer able to lend the government money. Portugal is expected to seek a two-month loan from the European Commission this weekend.

BB&T is discontinuing its free checking accounts on June 3, but customers can still get the $12 monthly maintenance fee waived by maintaining a $2,000 average balance each month. Executives at giant banks have suggested that all the banks will be discontinuing free checking this summer.

There were two bank failures tonight, each with less than $200 million in deposits.

In Illinois, Western Springs National Bank and Trust was closed. Heartland Bank and Trust Company is taking over the deposits and purchasing the assets.

In Las Vegas, Nevada Commerce Bank was closed. California-based City National Bank paid a $1 million premium for the deposits and is also purchasing the assets.

There was also a credit union liquidation tonight. Mission San Francisco Federal Credit Union had 2,500 members. Membership accounts have been transferred to Self-Help Federal Credit Union.