FDIC is a fantastic scam! It is designed to stop a run on the banks. The USGvt is $23 trillion in debt; where does its obligation to you begin?
Here is how it worked in Nashville in the 1980's. Two banks went belly up (for whatever reason.) After a short lockup, Monday morning the doors of the banks opened up and a desk was placed just inside. A line formed of depositors. As each stepped up their account was examined and they were assured their money was safe.
Mr. Smxth (it would go)... we see that you have $8,000 dollars deposited; that is guaranteed. Now we see that you have a home mortgage for $25,000; you still owe us $17,000.
That sort of thing; and after all, you can't expect a broke system to give $8,000 to someone who owes it $25,000... not logical. Too many people carry a lot of debt.
That isn’t how it works.
And no small bank would ever service their own mortgage. They are sold as soon as they close.
Try again.
Since I was the Cash Manager for the largest bank in St. Louis and responsible for all our bank’s accounts with other banks, I often had to stop activities with banks that I didn’t consider sound.
Generally, what happened during this period, the Fed came in after the bank closed on Friday(they would have already found a buyer for the troubled bank). During the weekend, the news reported the acquisition by another bank.
On Monday, the bank opened up with some sort of banner covering the old name and giving the new name. Life went on as usual for the customers.
Our bank was an acquiring bank for many smaller banks and savings and loan associations.
When I had a mortgage, I kept 6 months of payments in a savings account at that bank. The rest of my savings was split between 2 other banks which I did not owe anything to.
Creditors have a tendency to dr. your account when there’s a payment dispute. Hence keeping money out of their clutches is a good thing.