FDIC Creates a Deposit Insurance National Bank to Facilitate the Resolution of New Frontier Bank, Greeley, Colorado Bank of the West to Provide Temporary Operational Management FOR IMMEDIATE RELEASE April 10, 2009 Media Contact: David Barr (202) 898-6992 Cell: (703) 622-4790 E-mail:dbarr@fdic.gov New Frontier Bank, Greeley, Colorado, was closed today by the State Bank Commissioner, by Order of the Banking Board of the Colorado Division of Banking, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC created the Deposit Insurance National Bank of Greeley (DINB), which will remain open for approximately 30 days to allow depositors time to open accounts at other insured institutions. At the time of closing, the receiver immediately transferred to the DINB all insured deposits of New Frontier, except for brokered deposits, certificates of deposit (CDs) and individual retirement accounts (IRAs). The receiver also transferred to the DINB all secured public unit deposits. Under the FDI Act, the FDIC may create a deposit insurance national bank to ensure that depositors have continued access to their insured funds where no other bank has agreed to assume the insured deposits. Bank of the West, San Francisco, California, was contracted by the FDIC to provide operational management of the DINB. The main office and two branches of New Frontier will open on Monday, April 13, 2009. Banking activities, such as direct deposit and writing checks, ATM and debit cards, can continue normally for former customers of New Frontier during the 30-day transition period. It is also important to note that New Frontier official checks will continue to clear and will be issued to customers closing accounts. All insured depositors of New Frontier are encouraged to transfer their insured funds to other banks. They may do so by asking their new bank to electronically transfer their deposits from the DINB or by writing checks for the amount in their accounts. The FDIC will mail checks at the end of the transition period to the address of record for depositors who have not closed or transferred their accounts during the transition period. Brokered deposits, CDs and IRAs are not a part of this transaction. The FDIC will mail checks to non-brokered deposit customers. The FDIC will pay the brokered deposits directly to the brokers for the amount of their insured funds. Customers with brokered deposits should contact their brokers directly for information concerning their money. The FDIC created the DINB to permit uninterrupted service for customers with checking and NOW accounts. This arrangement allows for uninterrupted direct deposits and automated payments from customers' accounts and allows them time to find another institution with which to do business. As of March 24, 2009, New Frontier had total assets of $2.0 billion and total deposits of about $1.5 billion. At the time of closing, there were approximately $150 million in insured deposits and $4 million in deposits that potentially exceeded the insurance limits. Uninsured deposits were not transferred to the DINB. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers. Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-800-830-4705 to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9 p.m., MDT; on Saturday from 9 a.m. to 6 p.m., MDT; on Sunday from noon to 6 p.m., MDT; and thereafter from 8 a.m. to 8 p.m., MDT. Customers who would like more information on today's transaction should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/newfrontier.html. Beginning Monday, depositors of New Frontier with more than $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp to determine their insurance coverage. The FDIC as receiver will retain all the assets from New Frontier for later disposition. Loan customers should continue to make their payments as usual. The cost to the FDIC's Deposit Insurance Fund is estimated to be $670 million. New Frontier is the twenty-third bank to fail this year and the second in Colorado. The last bank to be closed in the state was Colorado National Bank, Colorado Springs, on March 20, 2009. # # # Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,305 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars â insured financial institutions fund its operations. FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-53-2009
No "acquiring bank" had previously occurred three times this year. The Omni National Bank (March 27) failed under such a circumstance - no acquirer. In the Omni National case Sun Trust maintains(ed) the accounts for 30 days after which the branches/headquarters will be shut. Omni National had almost a billion in assets. The other two had about $290 million in assets. You can see the list of failed banks here -> http://www.fdic.gov/bank/individual/failed/banklist.html -gastropod
Here is a link to check the safety of banks and credit unions. http://www.bankrate.com/rates/safe-sound/bank-ratings-search.aspx Credit unions are insured by the National Credit Union Administration: http://www.ncua.gov/shareinsurance/
My credit union is insured by the NCUA. I've recieved two emails from them in the last year or so assuring me that they are safe, even though they have some exposure to the declining southern California real estate market. The fact that they sent me two emails causes me a little concern so I wonder how I can check up on them. I also wonder if the NCUA operates like the FDIC in that in the event of a seizure I can quickly transfer my insured deposits out. Any info is appreciated!
Hugh you need to verify it for yourself but yes NCUA does operate like FDIC. I was a member of the defunct New Horizons of Denver. I wasn't told for 10 months, pissed me off, but I got all my money and even a dividend from the credit union that took them over for staying with them. You can look up institutions on http://www.bankrate.com/rates/safe-sound/bank-ratings-search.aspx. What I remember was that they acted funny when I would call them and ask them to match rates against another credit union. This was about 2 years ago. With my other CU I demanded to speak to someone in accounting to ask some questions. You could do the same.
Saw an FDIC ad today at a bus stop. Suze Orman saying "Remember no one has lost a penny at FDIC". Which tells you that someone at FDIC feels they need to instill confidence in the public. By the way, is it true no one has ever lost a penny at FDIC? I'll bet someone has.
Credit unions are standing strong. For the most part, they did not engage in subprime lending, unlike banks.
You're not paying attention. Two big 'wholesale' credit union entities just got taken over. Credit Unions are not immune, though they are as safe as the banks as far as I'm concerned, and pay more.
Who has lost a penny+ at FDIC? The depositors over FDIC limits. The way some banks have been shut down in different years may have exacerbated the large depositors' losses where I am thinking of the late 1980s but newspaper details may not be reliable. <BR> <BR> Also in the late 1980s, I used a credit union that had a stronger balance sheet than most banks and a second, higher limit insurance policy. Times have changed, and I think the risks of everything have to be reassessed, including inflation and many things in the US like large corrupt government and the prospective relative economic strength of a hollowed out country.