Read the information on rate cuts regarding rate cuts to CDs after a bank closes. A few followup questions:
1) Can this happen with brokered CDs or only direct CDs? If it can happen with brokered CDs is there any exit (right to liquidate)?
2) When it happens to a direct CD since there has been a change in policy can you withdraw from the CD with no penalty. If there is a penalty do you get something like the worst of the new and old bank's penalties or does the new bank have to respect the old bank's penalty structures?
3) How often do these rate cuts happen when a bank dies and the deposits get folded in to the new bank?