Bank Champ » General

FDIC $250,000 Insurance Limits Extended to 2013

Bank Champ — Sun, 31 May 2009 11:49:05 +0000

Recently the Department of the Treasury approved the FDIC’s request to extend the deposit insurance limit of $250,000 from 2009 to 2013, so our deposits will be protected up to the new amount for the next five-plus years. As you may remember, last year the limit was $100,000 and it was temporarily increased to $250,000 to calm people’s fears about bank failures. Originally, the increase was to expire on December 31st, 2009, so this extension adds many years to the existing protections. The limit is supposed to return to $100,000 in 2014, unless it is extended once again.

This extension of the increased limits applies to NCUA covered credit unions as well, protected by the National Credit Union Share Insurance Fund (NCUSIF).

GMAC Bank Becomes Ally Bank

Bank Champ — Sat, 16 May 2009 12:47:49 +0000

GMAC Bank customers got a bit of a scare this week when a visit to GMACBank.com redirected them to Ally.com. That’s because GMAC Bank decided to rebrand itself, not a bad move given the turmoil surrounding General Motors and what appears to be an inevitable structured bankruptcy. GMAC/Ally Bank announced in a press release that would offer leading bank rates, no teasers, and 24-hour service! Hooray!

Technically, they are a unit of GMAC Financial Services, much like GMAC Bank was, and they would offer the whole breadth of financial products including CDs, online savings accounts, and money market accounts. For GMAC Bank customers, nothing changes – your login and passwords are the same.

To help kick off the fun, they now offer a no penalty CD. You can withdraw your funds from the no penalty CD after six days without penalty. You can read the full FAQ here and they are currently offering a 9-month 1.49% APY no penalty CD.

OTS: E*Trade Bank Must Quickly Raise Capital

Bank Champ — Wed, 29 Apr 2009 12:59:49 +0000

E*Trade Financial Corporation (NASDAQ: ETFC), the parent company of E*Trade Bank and E*Trade Brokerage, was notified by The Office of Thrift Supervision to “quickly” raise new capital for its bank and reduce the leverage of the holding company after it posted a 7th straight quarterly loss. (Interactive Investor) E*Trade reported earnings on April 28th and shares fell a whopping 25% as disclosed the directive from OTS.

What does this mean for consumers with accounts at E*Trade Bank? They are FDIC insured so your deposits are secure up to $250,000, so I wouldn’t worry too much. Their failure would be like any other bank and chances are your deposits will be available within a day or two (they usually fail banks on a Friday and reopen on Monday). If all of your savings are in E*Trade, you might want to withdraw a little bit just so you have it on hand in case you need it those few days the bank will be inaccessible. Better safe than sorry.

What does this mean for shareholders? The stock dropped 25% for a reason, failure of the bank would be very bad for the holding company. Should the holding company go bankrupt, shareholders would almost certainly be wiped out.

E*Trade faced this sort of pressure before, we’ll see if they can get themselves out.