Just last month I was talking with a friend about federal takeovers of failed banks. I advised my friend to put his money in two banks instead of one – just in case a bank closes its door without warning. I told him I’ve seen it happen twice – and it’s not a pretty site to see people fighting to get their money after a bank has been shuttered.
Last week, branches of Pasadena-based IndyMac bank were seized by the Federal Deposit Insurance Corporation and closed without warning. The good news is bank customers’ accounts are insured by the FDIC up to $100,000. The bad news is customers have to wait in line for hours or sometimes days to get their money out of a failed bank.
Yesterday, at least three police squad cars showed up as tempers flared outside the San Fernando Valley branch. Cops threatened to arrest customers who didn’t remain calm as they stood in line waiting to get their money.
Imagine that: threatening customers whose life savings are tied up in a bank.
My advice to you guys is to take your lunch break to go open up another account at a different bank. the AJC has just announced it will lay off 200 staff members due to dwindling advertisement sales and rising fuel costs. The immediate future looks bleak and banks are usually among the first institutions affected by a bad economy.
