An amazing story in the LA Times. Perhaps an overreaction by the customers, but that's why they always called them "panics":
Anxious customers jammed the phone lines and website of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.
Countrywide Financial Corp., the biggest home-loan company in the nation, sought Thursday to assure depositors and the financial industry that both it and its bank were fiscally stable. And federal regulators said they weren't alarmed by the volume of withdrawals from the bank.
. . .
Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.
"It's because of the fear of the bankruptcy," said Ashmore, president of Irvine's Impac Mortgage Holdings, which escaped bankruptcy itself recently by shutting down virtually all its lending and laying off hundreds of employees.
"It's got my wife totally freaked out," he said. "I just don't want to deal with it. I don't care about losing 90 days' interest, I don't care if it's FDIC-insured -- I just want it out."
. . .
At a branch near Countrywide's corporate headquarters in Calabasas on Thursday, a flood of spooked customers seeking to withdraw their certificates of deposit and money-market accounts overwhelmed the small staff.
The Countrywide employees were forced to resort to taking down names and asking people to wait it out or come back later.
. . .
In Laguna Niguel, Ashmore, the Impac Mortgage president, remarked on how the credit problems stemming from sub-prime loans had filtered down to a local bank branch.
"It started out with this global credit crunch we've been reading about," he said as another Countrywide depositor left the bank's office. "It's now gotten down to affecting people like him and me who are closing our accounts."
The other depositor shook his head as he climbed into his car.
"It's all over," he said, and drove away.
5 comments:
I have an online account with Countrywide Bank (they have excellent interest rates) and admit that I've spent some time this week double checking that it's covered by FDIC. It is, and so I'm taking deep breaths and not touching anything.
If the bank does go under, does anyone know how long it takes you to get your money back from the FDIC?
" If the bank does go under, does anyone know how long it takes you to get your money back from the FDIC?
"
Ive seen some debate on that. Wild guesses range form months to never.
Here is an article which is quite good, but admittedly detailed and may be difficult to follow if markets don't interest you, but for those who "want to know":
http://news.goldseek.com/MillenniumWaveAdvisors/1187535944.php
Elizabeth,
Wow, that must be a little nerve-wracking, but the deep breaths are probably the logical choice. The worry for the Impac president, of course, was that his 500K was far more than the FDIC insured.
According to the FDIC it takes a few days after a bank fails. It is the law. The depositor either can receive a check from FDIC or FDIC will transfer the amount to another FDIC insured bank.
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