Prompted by the an awareness alert from the Amy Knows blog, I just learned about how NetBank, and online bank, failed on checking and savings accounts, which would include business accounts. This means that they no longer have the money that they were holding in individual or business accounts, or don't have all of it. This isn't a scam, but an awareness issue that TheStreet.com had been warning about for years.
Amy told how she ran into a friend who runs a non-profit, and who is a victim of NetBank's failure, and may be out $350,000. Of the $450,000 the non-profit had deposited with the bank, so far, they have only gotten $100,000 back from the FDIC and are not guaranteed to get the rest back.
Amy says: "The lesson to remember here is that bank accounts (checking, savings, money markets) are only guaranteed for $100,000 in cash. Here is a link to the FDIC’s website for further information http://www.fdic.gov/deposit/deposits/insuringdeposits/index.html"
On September 28th, 2007, NetBank was acquired by ING Bank, after a deal to be acquired by EverBank fell through. The Office of Thrift Supervision closed down NetBank on September 28th, 2007, naming FDIC as the acquirer, who then issued a statement that NetBank's insured deposits had been acquired by ING Bank. TheStreet.com had been rating NetBank poorly for years, and has a good story on it here.
From TheStreet.com's article:
"Customers with uninsured deposits will receive immediate payment of 50% of their uninsured balances. These customers will become creditors to the receivership for the remaining 50%. This means that $54.5 million in deposits may never be recovered by these customers."
Related Articles:
Portfolio.com's Finance Blog: More on the NetBank failure
ajc.com: NetBank failure largest in state
Google search for NetBank online failure
Digg search for NetBank
Thursday, October 4, 2007
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