The Housing Chronicles Blog: 60 Minutes profiles an FDIC bank takeover

Sunday, March 8, 2009

60 Minutes profiles an FDIC bank takeover

Wonder what happens to a bank when it's taken over by the FDIC? 60 Minutes was recently allowed unprecedented access because the FDIC wants the public to know what happens during one of these takeovers. FDIC Sheila Bair says they expect to spend $65 billion on these takeovers over the next five years -- certainly relative chump change versus the recent stimulus package, and an amount that may certainly rise. From a story:

A lot of people are worried about their banks these days. While devastated giants like Citigroup get bailed out again and again and again, many smaller banks are failing. The federal agency that takes over unsound banks is the Federal Deposit Insurance Corporation - the same people who guarantee depositors won't lose their money.

Most every Friday night now the FDIC seizes several banks. You haven't seen these takeovers happening because they're done secretly at night to make sure there's no needless panic by depositors. But last week 60 Minutes and correspondent Scott Pelley were given extraordinary access to one of these operations because the FDIC wants you to know what happens to your money when your bank has failed...

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