60 Minutes followed the FDIC on the February 27th closure of Heritage Community Bank. I was surprised to see how many agents were involved in the closure of this small bank. According to the report, a team of nearly 80 were involved in the Friday evening take-over of the bank's 4 branches. A few days before the closure, the FDIC held a secret auction to find a buyer of the bank. As is typical, FDIC did find a buyer. MB Financial Bank won the auction, and it agreed to assume all deposits of Heritage Community Bank, including deposits over the FDIC limits.
60 Minutes also showed reaction of some customers when the bank opened Saturday. One came in with a suitcase with the intent to cash out his deposits. The FDIC agent was able to calm his worries, and he decided to leave his deposits at the bank.
The 60 Minutes reporter Scott Pelley also interviewed the FDIC Chairman, Sheila Bair. When asked about Citibank, Bair was careful not to give any hints of a take-over, but she did express concern about mega-banks. I think it's likely we'll see new regulations in the next few years with more limitations on bank sizes.
To review the recent bank closures and to learn about FDIC rules, refer to the following:
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