USGlass - October 2008 - USGlass Magazine

FinancialFlash
Bank Troubles Require Extra Vigilance
of Account Balances for FDIC Insurance
We’ve all heard the saying “Don’t bite off more than
you can chew,” but unfortunately, not everyone, including
banks, always listens. For example, when
a bank makes more loans than it can afford a failure of that institution
is often the result. Considering the recent federal
takeover of Pasadena, Calif.-based IndyMac, which was taken
over by federal regulators on July 11 with total assets of $32.01
billion and total deposits of $19.06 billion as of March 31,
2008, many business owners are now wondering, “What if that
happens to my bank?”
To best protect themselves in the event of a bank failure,
glass company owners need to first understand what’s protected
through the Federal Deposit Insurance Corp.
(FDIC). For starters, corporations, partnerships and unincorporated
associations, including for-profit and notfor-profit
organizations, are all insured under the same
ownership category.
“These accounts are insured only up to $100,000 at each
separately chartered insurance institute,” says Jim Deveney,
chief of the deposit insurance section with FDIC. Deveney
explains though, that if a company has multiple accounts—
an operating account, a payroll account, etc.—at one bank,
they are not separately insured. “These accounts are all added
together and insured for up to $100,000,” says Deveney. A
business can, however, have multiple accounts spread out
across different FDIC-insured banks (i.e., one at Wachovia,
continued on page 42
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40 USGlass, Metal & Glazing | October 2008 www.usglassmag.com