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Sat, Jul 04 2009 

Published: July 18, 2008 12:00 am    print this story     

Bank officials: Don't worry about money

By Cass Rains, Staff Writer

Enid bank patrons, and bank patrons across Oklahoma for that matter, have nothing to worry about. Their money is safe, bank officials said.

Officials say stories on television and in newspapers about the collapse of IndyMac bank in California last week have scared some customers and depositors into thinking their money may not be safe.

Brad Blankenship, chief operating officer and president of Security National Bank, said his bank had received some calls from concerned customers. He said the bank has been telling customers not to worry.

“We not only want to reassure our deposit customers but all deposit customer in Enid, Garfield County and Oklahoma that Oklahoma banks are profitable and have good liquidity,” Blankenship said.

The problems that led to a bank run on IndyMac last week are not likely to occur in Oklahoma, said Central National Bank Senior Vice President Daron Rudy.

“ IndyMac was in an area of the country where home prices had fallen 30 percent to 50 percent,” he said. “We’re blessed in the fact we didn’t see the same amount of depreciation.”

Blankenship and Rudy said the sub-prime mortgage crisis effected states on the East and West coasts, and those problems were not likely to affect Oklahoma banks.

According to a statement issued by the Oklahoma Bankers Association Wednesday, Oklahoma banks hold more than $5 billion in capital as of March 31 and are “positioned well to withstand any downturn in the state’s economy,” which is not foreseen in any state economic forecast.

Bank deposits are insured by the Federal Deposit Insurance Corp., an independent agency of the federal government. FDIC protects against loss of deposits if an FDIC bank or savings association fails.

FDIC and other federal and state regulatory agencies regularly review insured banks to ensure standards are met. FDIC covers deposit accounts, dollar for dollar, including principal and any accrued interest, up the insurance limit.

The basic insurance amount is $100,000 per depositer per bank for deposit accounts such as checking, savings and NOW accounts, money market deposit accounts and certificates of deposit, or CDs.

Anyone with $100,000 or less in all deposit accounts at the same insured bank, is fully insured.

Additional insurance also is available for accounts with different ownership categories, and federal law provides up to $250,000 in deposit insurance coverage for self-directed retirement accounts, such as individual retirement accounts, or IRAs.

“If they have multiple people on the account, they can have multiple coverage and still get more coverage,” Rudy said.

Blakenship suggested people with more than $100,000 in an account should talk with their bank because there are other ways to get additional coverage.



Joint accounts



With joint accounts, or accounts owned by two or more people who have equal rights to withdraw money from the account, each person’s shares of all joint accounts at the same insured bank are added together and the total is insured up to $100,000.

If a couple has a joint checking account and a joint savings account at the same insured bank, each co-owner’s shares of the two accounts are added together and insured up to $100,000, providing up to $200,000 in coverage for the couple’s joint accounts.



Revocable trust accounts



Revocable trust accounts are deposits held in either payable-on-death, or POD, accounts or living trust accounts.

POD accounts, also known as testamentary or Totten Trust accounts, are the most common form of revocable trust deposits. These informal revocable trusts are created when the account owner signs an agreement, usually part of the bank’s signature card, stating the deposits will be payable to one or more named beneficiaries upon the owner’s death.

Deposit insurance coverage for revocable trust accounts is based on each owner’s trust relationship with each qualifying beneficiary. While the trust owner is the insured party, coverage is provided for the interests of each beneficiary in the account.

The FDIC insures the interests of each beneficiary up to $100,000 for each owner if all of the following requirements are met:

• The beneficiary is the owner’s spouse, child, grandchild, parent or sibling. Adopted and stepchildren, grandchildren, parents and siblings also qualify.

• The account title must indicate the existence of the trust relationship by including a term such as payable on death, in trust for, trust, living trust, family trust or an acronym such as POD or ITF.

• For POD accounts, each beneficiary must be identified by name in the bank’s account records.

If any of these requirements are not met, the entire amount in the account, or any portion of the account that does not qualify, would be added to the owner’s other single accounts, if any, at the same bank and insured up to $100,000. If the revocable trust account has more than one owner, the FDIC would insure each owner’s share as his or her single account.



Certain retirement accounts



Certain retirement accounts are deposit accounts owned by one person and titled in the name of that person’s retirement plan. Only the following types of retirement plans are insured in this ownership category:

• Individual Retirement Accounts (IRAs) including traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs and Savings Incentive Match Plans for Employees (SIMPLE) IRAs

• Section 457 deferred compensation plan accounts.

• Self-directed defined contribution plan accounts

• Self-directed Keogh plan (or H.R. 10 plan) accounts

All deposits that a person has in any of the types of these retirement plans at the same insured bank are added together and the total is insured up to $250,000.

For example, if a person has an IRA and a self-directed Keogh account at the same bank, the deposits in both accounts would be added together and insured up to $250,000. However, naming beneficiaries on a retirement account does not increase deposit insurance coverage.

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