My g-grandfather just put his two weeks pay in the bank in a little town in Iowa.
The next day, the bank closed.
The same family is running a bank nearby.
Milton Friedman said that the most important piece of legislation to come out of the Great Depression was the creation of FDIC, the Federal Deposit Insurance Corporation.
Prior to FDIC, when a bank failed every depositor’s money simply disappeared. And in the three years from 1930-33 one third of all American banks collapsed, wiping out the savings of millions of Americans.
No other country in the world had similar damage. A peculiarity of American banking law prohibited branch banking, something which could have provided small rural banks with large money center partners in a crisis.