The FDIC is warning customers of a recently closed Oklahoma bank that they could lose millions of dollars in uninsured deposits.
Uninsured Deposits Could Be Lost
The FDIC says over $7.1 million in deposits at First National Bank of Lindsay were uninsured, meaning they exceeded the FDIC’s $250,000 insurance limit. For now, customers can access 50% of these uninsured deposits, but that number could change as the FDIC sells off the bank’s assets.
Recent Bank Failures Raise Concerns
This news comes after the FDIC fully reimbursed uninsured depositors in the previous four bank failures. This recent case shows that even deposits above the insurance limit can be lost.
FDIC’s Insurance Limit Tested
The FDIC’s $250,000 insurance limit was put to the test last year during the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank. In a historic move, the government protected all deposits at the first two banks using a combination of FDIC insurance and a special “systemic risk exception.” This allowed the FDIC, Federal Reserve, and Treasury Department to backstop all deposits. The two following bank failures were handled differently, with both lenders being acquired by rival banks and all assets, including uninsured deposits, being assumed.
Bank Closure Due to Fraud
Regulators say First National Bank of Lindsay was shut down last week after they discovered false and misleading bank records and other information suggesting fraud had depleted the bank’s capital.
