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Regulators close 4 banks in 3 states

18.05.12

Federal regulators have closed two banks in Maryland and one each in Minnesota, South Carolina and California, bringing to 22 the number of U.S. banks that have failed so far this year.

The Federal Deposit Insurance Corp. said Friday that it shuttered Bank of Eastern Shore, in Cambridge, Md., as well as HarVest Bank of Maryland, in Gaithersburg.

Regulators also closed Inter Savings Bank in Maple Grove, Minn., Plantation Federal Bank in Pawleys Island, S.C., and Palm Desert National Bank in Palm Desert, Calif.

Combined, the closed banks had $1.42 billion in assets and $1.34 billion in deposits as of Dec. 31.

The FDIC estimates that the banks' failures will cost the insurance fund a combined $272.6 million.

The pace of bank closures has slowed sharply after ballooning following the financial crisis in 2008. By this time last year, 34 banks had failed.

In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis more than two decades ago. The 2010 failures cost the fund around $23 billion. The FDIC has said that year likely was the high-water mark for bank failures from the Great Recession.

Source: The Seattle Times

Bank Of America Gets It Right: Lifetime Of Free Checking For One Man

18.05.12

A Bank of America customer near San Francisco was just granted free checking for life by BofA. But don’t go calling your bank asking for the same deal just yet.

Robert Whitten opened his original checking account in 1971 when he was in high school. The bank he opened the account in was called Virginia Commonwealth Bank which had just opened up a branch in Arlington, VA. He told Bay Area ABC news affiliate that the new branch had a promotion in place where if you opened an account right then you’d be guaranteed free checking for life. So, he signed up.

But thanks to a fury of bank consolidation that’s taken place since then his original bank was acquired by another which was acquired by another and another. Eventually he ended up with Bank of America and that’s when he says the fees kicked in–$14 a month.

BofA told him that they’d notified him about the term changes in his account. He tells ABC news: “They said, ‘Well yes you did have free checking for life, but that expired.’ But I thought it was free checking my life, not the life of the promotion. I decided to see if I could fight it.”

Source: Forbes