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.