Protect your Money; FDIC's Updated List of Troubled Banks Soon to Come

Knowledge is Power: Who is Next?

Protect your Money; FDIC's Updated List of Troubled Banks Soon to Come

Many investors are on edge after federal regulators seized the California lender, IndyMac Bank, one of the nation’s largest savings and loans, last week. With $32 billion in assets, IndyMac, a spinoff of the Countrywide Financial Corporation, was the biggest American lender to fail in more than two decades.

Yet, FDIC has a list of about 90 trouble banks. Many consumers are wondering wether their bank is the next one to fail. Bear Stearns came on. IndyMac followed. Which bank is going to go down? Investors and regular depositors are watching all the signs. FDIC is not going to publish the names of these financial institutions in order to avoid a run on them. This is not sitting well with most hard-working people who will be kept away from their hard-earned money. In 1994, the Federal Deposit Insurance Corporation listed 575 banks that it considered to be troubled. As of this spring, the agency was worried about just 90 banks. That number may go up in August, when the government releases an updated list.

Guess what? IndyMac, one of the nation’s largest mortgage lenders, was not on the government’s troubled bank list this spring — an indication that other troubled banks may be below the radar.

The future of Fannie Mae and Freddie Mac is vital to the banks, savings and loans and credit unions, which own $1.3 trillion of securities issued or guaranteed by the two mortgage companies. If the mortgage giants ever defaulted on those obligations, banks might be forced to raise billions of dollars in additional capital.

Small banks may not be as lucky as the large institutions. The collapsed real estate market and souring mortgage loans have placed them on a danger list.