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ICBA Debunks Deposit
Insurance Myths
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Washington, D.C. (July 17, 2008)-The Independent Community
Bankers of America (ICBA) is challenging unfounded concerns raised
about the safety of bank deposits. Federal deposit insurance guarantees
your deposits are safe in every financial institution insured by the
Federal Deposit Insurance Corporation, including community banks. Don't
believe the hype. Get the facts.
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Myth: Your money is safer in big banks.
Fact: No one
has ever lost a penny of FDIC-insured deposits held in community banks.
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FDIC insures deposits up to $100,000 per depositor and
$250,000 for certain retirement accounts. If you have more than
$100,000 at a community bank, you can still be fully insured if your
accounts meet certain requirements. For example, accounts owned by a single
person are separately insured from joint accounts or retirement
accounts owned by that person. The FDIC's Electronic
Deposit Insurance Estimator can determine
your coverage.
Community banks focus on the needs of local families,
businesses and farmers, and their top executives are generally
available on site to answer your questions directly and make timely
decisions. Many of the nation's largest banks are structured to serve
large corporations and have CEOs headquartered in office suites, not
local banks.
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Myth: Your money is stored in a vault at the bank.
Fact:
Community bank deposits are reinvested in your local economy.
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Your money on deposit will be used to make loans in the
community that help your neighbors start a nearby business, purchase a
home, or send a son or daughter to college. Continuing to hold deposits
in community banks ensures the neighborhoods where you live and work
will continue to grow and thrive.
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Myth: Community banks are undercapitalized.
Fact: The vast
majority of our nation's banks, especially community banks, are strong,
safe and stable.
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Community bankers are common sense lenders that don't
engage in high-risk activities. Instead, they stick to the longstanding
fundamentals of responsible banking, and always seek to serve the
long-term interests of their customers and communities.
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Myth: The FDIC takeover of IndyMac Bancorp means my bank
is at risk.
Fact: IndyMac
Bancorp was taken over because, in part, depositors became fearful and
attempted to close their accounts at once, destabilizing the bank.
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The overwhelming majority of the nation's banks are safe
and well capitalized. As stated by FDIC Chairman Sheila Bair, IndyMac
is only one of nearly 8,500 depository institutions operating in the
United States and represents just 0.2 percent of banking-industry
assets. There is little chance your bank will be taken over by the
FDIC. And if that does happen, you will continue to have virtually
uninterrupted access to your insured deposits.
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Myth: Community banks are involved in problems with
subprime mortgage lending.
Fact:
Community banks are common-sense lenders that have avoided subprime
lending.
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There is no mortgage-lending crisis for community banks
because they are well-run, highly capitalized, tightly regulated and
more risk-averse than big banks. Community banks have money to lend
homeowners for new purchases and to refinance existing mortgages. In
spite of talk of a credit crunch, community banks are open for
business.
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Portions
of this "Special Edition" are reprinted with
permission from "NewsWatch Today", a publication of the
Independent Community Bankers of America, and brought to you as a part
of your bank's relationship with the Arkansas Community Bankers
Association. We're pleased to provide information about current
issues affecting community banks. If you prefer not to receive
these updates please reply to this email and enter
"unsubscribe" in the Subject line.
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