I Wouldn’t Bank There

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There is a bank that is popular with many people here in Seattle. It even has our state name in its name. Well a few of my mutual friends have heard my reasons why I’d move my money to a different bank. Here they are:

  • The bank has a BankRate.com Star rating of 2 out of 5. Why wait around until it goes to 1 star?
  • This bank just raised $7 Billion to stay alive. That is more than their market cap of $6 Billion.
  • This bank underwrote a lot of junk mortgages in California. Why give your business to a bank that was handing out NINJA loans (no income, no job)?
  • Many speculate this bank will need more money to stay afloat. If they are waiting for the California housing market decline to end soon – they are doomed.

Sure your account is FDIC insured up to $100,000. If this bank is shutdown, Ben and the boys will pick a new bank for you. It may run smoothly or it could be a hassle. Why not do the due diligence now and find an safe bank with honest lending practices?

Banks will fail. Will the bank implied in this post fail? Maybe. Maybe not. I wouldn’t risk it.

From the 2/26/2008 Wall Street Journal article FDIC to Add Staff as Bank Failures Loom:

The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis.

FDIC spokesman Andrew Gray said the agency was looking to bulk up “for preparedness purposes.” The division now has 223 employees, mostly based in Dallas.