We’re less than a third of the way into the year, and already more banks have failed in 2009 than in all of 2008. On Friday, four more banks were shut down by the FDIC, making the total 29 bank failures for the year after 28 banks failed in 2008. The banks on the list Friday were the First Bank of Idaho, American Southern Bank in Georgia, Michigan Heritage Bank, and the First Bank of Beverly Hills.

The bank failures come as no surprise in the wake of the financial turmoil we’ve seen during the past 18 months. What is more alarming is that there is no end in sight when it comes to other potential bank failures.

Each time a bank fails, the FDIC springs into action to not only cover the deposits of the bank, but also to help organize an orderly transition for bank customers if a new bank is taking over. With all of the bank failures of the past couple of years, the FDIC is getting pretty efficient at handling these transitions. For example, US Bank, based in Minneapolis, purchased the assets of the First Bank of Idaho Friday night and the bank was scheduled to operate during normal business hours on Saturday. Customers won’t have any delay at all at being able to access their money. When banks first started to fail last year, customers faced a great deal of uncertainty. The process has unfortunately become almost routine.

Through changes meant to instill confidence in the banking system, the FDIC is covering bank deposits up to $250,000 through the end of 2009. Traditionally bank deposits have been covered for up to $100,000 per customer. As customers continue to have a hard time making loan payments during this recession, banks are likely to be in survival mode for the foreseeable future.

If your bank happens to be one of these or fails in the future, the FDIC establishes a link on its website with details on every failed bank and instructions that customers should be aware of. The web address is www.fdic.gov.

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Tags: Bank, deposits, Failure, FDIC

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