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***
That is pretty much my memory, although I seem to remember it was FDIC at the desk when the bank opened. How the issues were settled was never broadcast. I cannot say, only what was reported.
Today I heard that the U.S. Federal Reserve is the largest land owner in the world. Apparently all that overnight money that the Fed supplies banks (in the multiple billions daily lately) has resulted in the Fed buying up all the property mortgages from the banks.
I have posted here from time to time what the collateral is for trillions of dollars of national debt: our homes, our jobs, our autos, our children, our retirement, our savings... etc. With this move and the student loan crisis such an eventuality is starting to come in to focus. Who loans trillions of dollars with no hope of recovery?
I hope we haven't borrowed our way into indentured servitude.
For the ones that I knew about or was involved with, it was simply business as usual for the customers. No inconvenience and no run on the bank.
Behind the scenes, the acquiring bank usually got some sort of write off of the non-performing loans, so their balance sheet and earnings would not be adversely impacted.
The loans outstanding would be the assets that the acquiring bank was buying. All payments etc. continued the same until the computer changes were ready. Customers were notified of any changes for where to send payments well in advance. Terms of the loan were honored as originally agreed to.
This is contract law 101. Buyers can not alter the contract. Now if the contract had a DEMAND clause, then the acquiring bank could demand payment in full anytime they wanted. But it’s up to everyone to diligently read those contracts and even have a lawyer look at them if they don’t know what they are doing. And by the way the truth in lending law has a very short statute of limitations.
The customer deposits were the liability that the acquiring bank was assuming. There was no special desk. People were so used to acquisitions and mergers that no one paid much attention or had any concern. Never experienced any lines other than normal teller or drive through activity.
The fed govt also later sold a lot of land back to the public through the Resolution Trust Corporation.
The interest rates were fabulous on those S+Ls that were going broke. I was getting 9-10% on MM Funds. S+L would go broke, interest rate would go down after it changed hands, I would move money to another going broke S+L. Easy money, no risk.
“Today I heard that the U.S. Federal Reserve is the largest land owner in the world.”
They don’t even own their own headquarters. They aren’t in the property business. They are the nation’s monetary authority in charge of the US money supply.
“Apparently all that overnight money that the Fed supplies banks (in the multiple billions daily lately) has resulted in the Fed buying up all the property mortgages from the banks.”
The Fed buys loans from commercial banks. That frees up money for new lending. They could be buying mortages but since there are several other agencies whose job is to do precisely that it’s not all that likely.