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.
I wonder what might happen if a number of the affected customers asked for their cash savings... Also, this is instructive concerning one or two banks but what if a larger number of banks becomes involved (e.g.: 1929)? (You don’t have to answer that.) The Fed is efficient at creating great sums seemingly out of thin air... just wondering. :)
Contract Law was nullified in 2009, where the government is concerned.
Anything the government “funds” is subject to the whims of the executive.
The FDIC is funded by the government.
Don’t believe me?
Go buy a 2020 Oldsmobile Cutlass.
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