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Question for the forum, does anyone research the banks/CUs they use to assess bank health/safety? I have leveraged Veribanc for years to check up on my banks and have both left banks as the ratings for that bank fell into disfavorable as well as not choose a bank after reviewing their report card and finding it less than stellar. Just wondering what others on here might be doing (looking for ideas that will improve my processes here). Thanks all for inputs. – Brian
My adopted home state has the distinction of hosting the country’s largest bank failure (so far). Washington Mutual aka WaMu was sunk by mortgage bonds like many others in 2008-2009. A person on my leadership team at work had a sizable CD there when WaMu failed. Because it was smaller than the FDIC coverage limit, he had little trouble or much delay in redeeming it after the bank was seized and sold to JPMC. As Jonathan said, if you manage any bank assets so they stay below FDIC limits you should be fine. My bigger concern with banks is this: are they investing in state-of-the-art security and fraud detection?
During the Great Recession, several small banks in our state went into receivership, including the local bank that held my church’s mortgage. This bank was acquired by another small chain of banks owned by a local family. This event led me to check up on bank health–I hadn’t really thought of it before. It turned out the local family bank was rock solid, from what I could gather. (I figured that’s why the older couple and their son were always in a jovial mood.) For a time, I did check up a new bank for myself or family, but I haven’t changed banks in a while, and I don’t monitor them on an ongoing basis.
I have shifted to regional banks myself, I have found one that REALLY treats both me and my money well. Not publicly traded mind you. Research has also shown me that I have better protections through brokerage accounts (yes arguments against each of these positions, banks and brokerages, can be made, I choose to diversify through a number of banks as well as brokerage accounts). Circling back to using Veribanc, their report cards spell out the health and solvency of the banks. I was a life long USAA member, I was never in the belief I would leave but their report card shifted from green to yellow a while back and the service level was falling off noticeably. I am no longer a member. They may be just fine but when I can find banks without solvency concerns, why would I not choose that. I think you might be surprised what you’ll learn researching the banks. I know I was.
Never thought of it. Always used the largest bank in the Country.
Interesting question. It never occurred to me to do a check. We always dealt with “major” banks, and felt safe. Maybe that was naive.
To be honest, I’ve never bothered to look at the safety of the banks I’ve used, but nor have I ever had a reason for concern. Yes, in the event of a failure, it might be difficult to access your money for a few months, but you could address that concern by having a second bank account. What about losing money? That shouldn’t happen if your balances are below the FDIC limits.
https://humbledollar.com/money-guide/fdic-insurance/