Hometown Bank Run

Last week, Si very quietly went and withdrew all of our money from our various accounts at our bank. We have appreciated this bank over the years, but we had reason to believe that it was no longer solvent. We had a number of different accounts {savings for each child in which we put money they receive as gifts, checking, regular savings, and checking for each of our small business ventures}. Though we don’t necessarily have a lot of money, it was quite the process for Si to get all of it out because each withdrawal required a separate transaction.

Si then ran over to a new bank that we had reason to believe was fine. Or at least better than our current bank.

Did I mention why we made this decision? First, my dad, who is “in the business” in a way, told us that our bank’s products weren’t selling well on the secondary market. I don’t know exactly what this means, but it sounded like a bad thing. Then, Si did the math. He basically figured out that our bank had more “insured” desposits than the FDIC had in funds to pay out if something went wrong. Though the government likes to print new money and give it out with wild abandon, Si was justly worried about the interim.

Basically, if our bank failed, would we be able to pay our bills while we waited for the insurance to kick in? And since there wasn’t enough money to cover all deposits, would the insurance ever kick in?

It wasn’t a risk we were willing to take.

Well, our personal bank run was divided into two parts. Apparently, I had opened a couple of our accounts on my own, so Si wasn’t able to close them without me. So on Saturday morning, all six of us packed the Suburban and headed to the bank.

“Why are you closing your account?” asked the sweet little teller.

I looked at Si. He looked at me. “Oh,” he said, trying to sound nonchalant, “solvency.”

The blank look on her face was slightly frightening. I know that tellers aren’t exactly in charge of the bank, but I suppose I expected that people who work in banking would understand basic concepts…like the idea of solvency.

I felt bad for her and I feared she wouldn’t be able to spell it when she wrote it down, so I said, “We are just trying to find a bank that feels more secure.”

This teller was fine with that. Her manager, though, had some major ruffled feathers. The manager tried valiantly to be polite, but it was plain to see she was upset. Near the end of the approval process, the manager looked at me and said, “Maybe when all this media nonsense dies down, you will come back.”

Oh, how I bit my tongue. Media nonsense? It was all I could do not to tell her to call me when her bank’s CDs were again good on the secondary market, even though I only had a vague notion of what that actually meant. Instead, I forced a smile and tried to sound sweet when I said, “Well, we have enjoyed banking here.”

And it was true. I was already annoyed that “free checking” at our new bank only applied to one account, and all subsequent checking accounts would have a monthly fee. So, naturally, we combined all our money and are trying to keep it mentally separate using a spreadsheet. Of course, this new bank seems to be healthy so maybe there is something to charging for some of the services.

And our old bank? Well…I have to say I feel a bit vindicated. After all, my impression was that the manager thought that Si and I were simply blown around by the winds of the drive-by media instead of making an intelligent and informed decision.

Last night, our old bank became the biggest bank failure in the history of the nation.