How Safe Is Your Bank?

(CBS)  Many depositors, who flocked to withdraw money from California's IndyMac bank this week, suddenly were faced another problem: Where will their money be safe?

"You really don't know, do you?" said one depositor.

For the average consumer, what do you look for in a bank?

CBS News correspondent Bill Whitaker spoke with bank analyst Dennis Santiago, who says that while there is no foolproof checklist to determine if a bank is sound, there are important things to consider:

Is the your particular deposit FDIC insured? The Federal Deposit Insurance Corporation guarantees all deposits of $100,000 or less. But that does not include mutual funds, stocks and bonds.

High interest-rates being offered on new accounts. If they're higher than everyone else's, ask questions. Could be nothing, but could be an indicator that the bank is strapped for capital or cash.

Stock prices. If the value of the bank's stock is plunging, again, find out why.

For do-it-yourselfers, the FDIC has numbers and information on every bank in the country and links to experts who have already crunched the numbers.

"To learn about a specific institution you're going to have to do your homework," Santiago said.

The main thing consumers can do is read the fine print.

[scm1122]

The news stated tonight that if you had more than 100,000.00 at a bank you would not be insured, this is totally not true. FDIC insurance has many different ways to legally title your accounts so that your funds are insured. Let''s not try to scared people into taking all but 100,000.00 from their bank thanking it is not insured or you just might cause more banks to have a problem. Below is a little more information; you might want to check out the FDIC website for the complete story and come back with more accurate information.

The FDIC insures deposit accounts such as checking, NOW and savings accounts, money market deposit accounts and certificates of deposit, or CDs. The basic insurance limit is $100,000 per depositor per insured bank.

If you or your family has deposits at one insured bank totaling more than $100,000, you should know that different ownership categories of accounts are separately insured up to $100,000. You may qualify for more than $100,000 in coverage at one insured bank if you own deposit accounts in different ownership categories.

The most common ownership categories are:

Single accounts
Self-directed retirement accounts
Joint accounts
Revocable trust accounts
The FDIC Web site also has EDIE, the Electronic Deposit Insurance Estimator, that will allow you to input the particulars concerning your deposits and estimate your insurance coverage.

[okhobieman]

Please publish the Texas bank ratio list.

[okhobieman]

Can CBS make public their copy of the bank list for Texas ratio?

[dan3232321]

Oh good, lets name another bank having financial difficulties by name and see if we can cause a run on it! Stating the name of a bank having trouble is just a different version of the hedge funds and competing investment bankers spreading rumors of Bear Stearns. In this case its the media''s obsession with bad news that is going to drive our entire financial system into unavoidable catastrophe if they don''t start exercising some responsibility for what is best for the American people as a whole.

[tootsie1963]

GOOD...I HAVE NO MONEY IN IT....ALL GOES TO GAS

[riddelup-2009]

Capitalism rests on a clear principle: those who get the profits should take the pain. For the system to work, bankers sometimes need to lose their jobs and investors their shirts. Yet were a collapsing Bear Stearns or Fannie Mae to sow destruction for the sake of a principle, it would impose a terrible price in lost jobs and output on everyone else. The unpalatable truth is that by the time a financial crisis hits, the state often has to compromise%u2014to impose as much pain as it can, of course, but to shoulder a large part of the losses nonetheless.

That formula comes at a heavy price. Fannie and Freddie were supposed to help Americans buy their own homes, by making the mortgage market work better. But it has been an awful deal for the taxpayer%u2014a Fed economist calculated the implicit debt-guarantee was worth a one-off sum of between $122 billion and $182 billion. Because Fannie and Freddie barely lowered the cost of borrowing, little of this subsidy went towards boosting home ownership. Instead, just over half%u2014about $79 billion%u2014went straight to their shareholders.

Normal financial-services firms should have been dealing in the safe, middle-of-the road mortgages that Fannie and Freddie specialise in. Except that they were crowded out into subprime mortgages. Fannie and Freddie should never have grown so large. Except that they wanted to exploit the margin

[whitemale08]

In April, Standard & Poor''''s said the risk that the U.S. would have to prop up its so-called Government Sponsored Enterprises posed a bigger threat to the country''''s AAA rating than its willingness to underwrite securities firms.




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Posted by forthepeopl1 at 12:17 PM : Jul 17, 2008-

That''s right my friend,

Standard and Poor''s allways stand as the 2nd con man who comes at the end of the scam game and tells you "it''s over" your country''s AAA is now downgraded.

That will immediately force whoever is left holding so called dollars or Federal Reserve Notes to immediately dump what''s left and it''s almost next to impossible to get that credit rating back unless your country goes through horrible austerity packages like end social security, stop all infrasucture projects it''s the death nail.

Now Paulson''s job is to make sure that all of this bad paper CDO''s MBS SIV''s all that sub-prime wash through Fannie and Freddie so that you and your pension funds are left holding the bag.

It''s evil folks, truly evil.

[mcv57]

... and the rich shall turn its brother against its brother for the sake of his empty belly - racism, anti-jew, and imperial dipiction is on the rise. The Bushwacker was just in it for ride (profiteering).

[mcv57]

LoL, Americans and greedy Corporations never learn their lesson from the Great Depression. It''s not who has the Gold Rules; the People Rule. Now that the corrupt financial system has America doing re-runs of the 1930s, GOP will attempt to murder democracy once more.

[forthepeopl1]

Fannie and Freddie shares have declined by about 80 percent this year. The slump in the two mortgage agencies has sparked a new catchphrase -- ``Too Chinese to Fail'''' -- based on the $974 billion of U.S. agency debt held by foreign investors, a fivefold increase since 2003.

Financial markets and U.S. legislators alike have derided U.S. Treasury Secretary Henry Paulson''s plan to bail out the mortgage lenders. One of the two key elements is illogical, while the second is plain outrageous.

Just last week, Fannie Mae said it ``has access to ample sources of liquidity, including access to the debt markets.'''' Freddie Mac said it was ``adequately capitalized, highly liquid and an essential part of the nation''s housing system.'''' Either they are being economical with the truth, or the decision to let them borrow from the Federal Reserve''s discount facility is window-dressing that serves no real purpose.

Defending the Indefensible

Worse is the scheme to allow Paulson to dip into the nation''s tax revenue to purchase shares in Fannie and Freddie -- shares that investors have already deemed to be almost worthless. If the mortgage lenders can''t survive in their current form, the government shouldn''t be defending the indefensible.

In April, Standard & Poor''s said the risk that the U.S. would have to prop up its so-called Government Sponsored Enterprises posed a bigger threat to the country''s AAA rating than its willingness to underwrite securities firms.