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Bank Failures

Question and Answer Guide

Bank of the Eastern Shore, Cambridge, MD


  1. Banking Services: Including Checks, ATM and Debit Cards
  2. You Do Not Need To Stand In Line to Close Your Account:
  3. Please Remember These Dates and Act Quickly to Replace These Services:
  4. Accounts Greater Than $250,000:
  5. Automatic Payments:
  6. Bill Pay:
  7. Certificates Of Deposits (CDs):
  8. Direct Deposits:
  9. Holds:
  10. IRA Accounts:
  11. Loans:
  12. Merchant Not Honoring a Check:
  13. Official Checks Issued By Bank of the Eastern Shore:
  14. Overdrafts and Lines Of Credit:
  15. Safe Deposit Boxes:
  16. Shareholders:
  17. Statements and Other Account Information:
  18. Tax Reporting - 1098/1099s:
  19. Uninsured Depositors:
  20. Unpaid Bills of Claims:
  21. Scams:
  22. Additional Questions:

On Friday, April 27, 2012, Bank of the Eastern Shore, Cambridge, MD was closed by the Maryland Commissioner of Financial Regulation. The Federal Deposit Insurance Corporation (FDIC) was named Receiver. Share price does not trigger a bank closing and was not the reason for Bank of the Eastern Shore's failure. According to regulatory policy, there is no advance notice given to the public.

Attempts to market the failed institution did not result in an acceptable bid; therefore, the bank will temporarily reopen on Monday, April 30, 2012, as Deposit Insurance National Bank (DINB) of Eastern Shore, so customers can transfer their insured accounts to another institution before the bank permanently closes on 5/25/2012. The bank will be open for a LIMITED period providing LIMITED services. If you do not transfer your funds by 5/25/2012, the FDIC will close your accounts and mail you a check for the remaining funds.

BANKING SERVICES INCLUDING CHECKS, ATM AND DEBIT CARDS:

You can continue to use your personal checks; however, they must clear by 5/25/2012, or they will be returned unpaid. You can continue to make deposits until 5/18/2012. You can use ATM/Debit cards until 5/14/2012. Online transactional service and Bill Pay are expected to resume on 4/30/2012. Automatic withdrawals will continue until 5/14/2012 or until you close your account, whichever is earlier. Branches will remain open until 5/25/2012.


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YOU DO NOT NEED TO STAND IN LINE TO CLOSE YOUR ACCOUNT:

Four ways to close your account:

  • The quickest and easiest way is to write a check for your available balance, then deposit that check into an account at another financial institution.
  • Create a Bill Pay automated payment to another financial institution.
  • Direct a wire transfer to another financial institution.
  • Ask for a "no fee" Cashier's check or Money Order.
    NOTE:
    • Please be sure to leave enough funds in your account to cover any outstanding checks.
    • If you do not close your account by 5/25/2012, you will lose access to your funds for approximately one week until a check for the balance is mailed to you.

PLEASE REMEMBER THESE DATES AND ACT QUICKLY TO REPLACE THESE SERVICES:

  • 5/14/2012: Automatic payments from your account will continue until 5/14/2012 or until you close your account, whichever is earlier.
  • 5/14/2012: You can continue using your ATM/Debit card until this date.
  • 5/14/2012: Online banking and Bill Pay will be permanently disabled 5/14/2012.
  • 5/18/2012: Federal Government direct deposits will not be redirected and will be available
    until 5/18/2012. All direct deposits will be returned after this date.
  • 5/25/2012: Keep in mind that checks must clear by this date or they will be returned unpaid. Branches will close, and any remaining insured account balances will be mailed to the address of record with the bank.
  • 5/25/2012: Drive-through windows will close after this date.
  • 5/18/2012: Federal Government direct deposits will cease to be accepted after this date.


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ACCOUNTS GREATER THAN $250,000:

Noninterest-bearing accounts are fully insured regardless of amount. If you have interest-bearing accounts greater than $250,000, you should call the FDIC to schedule a telephone appointment with an FDIC Claims Agent at 800-591-2817 as your accounts may require review. You may need to complete certain forms or provide documentation so the FDIC can make an insurance determination on your account(s).

Starting on the first business day after closing, you can verify your insurance status by entering each of your account numbers here: https://closedbanks.fdic.gov/drrip/AFI/Search/.

AUTOMATIC PAYMENTS:

Any automatic payments from your account will continue until 5/14/2012 or until you close your account, whichever is earlier. We encourage you to verify all automatic payments from your account the day after such payments are scheduled. You should move your automatic payments to a new bank as soon as possible.

BILL PAY:

Bill Pay and online banking will be discontinued 5/14/2012.

CERTIFICATES OF DEPOSITS (CDs):

Checks for insured balances were mailed on Sunday, 4/29/2012 to your address of record with Bank of the Eastern Shore. CDs will not be available for withdrawal at DINB of Eastern Shore. You will earn interest only until Friday, 4/27/2012. The FDIC has waived the early withdrawal penalty. If you had brokered CD accounts, you must contact your broker for further information.

DIRECT DEPOSITS:

All direct deposits, including Social Security deposits, will continue until 5/18/2012; however, you should arrange to move any automatic deposits or make withdrawal arrangements as soon as possible. The institution of your choice will be glad to assist in completing the required documentation. You may also find assistance at www.godirect.gov or call 1-800-333-1795. The Social Security Administration can be contacted at 1-800-772-1213, or locally at 888-347-9277, or at www.ssa.gov/deposit/.

All Federal government direct deposits, including Social Security checks, will not be redirected after 5/18/2012. Please note these will be processed at the same time they have been in the past.


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HOLDS:

A deposit account may be held due to delinquent loans of the depositor or for loans the depositor has guaranteed. Additionally, an account pledged as loan collateral will be held until the loan is paid. A letter will be sent informing you of any holds placed by the FDIC, along with instructions on how to proceed. If you have any questions regarding loan holds, please call your loan officer or the FDIC at the number provided in the letter.

An account may be held for additional documentation. For example, a Declaration for Trust form may be required to attest to the parties involved in the trust. Please contact the FDIC at 800-591-2817 to schedule a telephone appointment.

IRA ACCOUNTS:

IRA accounts are insured separately from other types of accounts up to $250,000. As with CDs, checks for the insured balance in IRA accounts were mailed on Sunday 4/29/2012 to the address of record with Bank of the Eastern Shore. From the date this check is issued to you from your IRA, you have 60 days to roll this over into another retirement vehicle. You should consult IRS Publication 590 and/or your tax advisor concerning the possible tax consequences of such distribution. This publication specifically addresses this situation; therefore, you should review it carefully. IRS Publication 590 can be obtained by contacting your local IRS office or via the Internet at www.irs.gov/pub/irs-pdf/p590a.pdf.

LOANS:

You should continue to make your loan payments to the same address as you have in the past. Make your check payable to Bank of the Eastern Shore. All escrow services previously performed related to your loan will continue. Should you receive notification that any portion of your taxes or insurance was not paid, please notify your loan officer immediately. You should direct your loan questions to your loan officer.

All foreclosure actions have been suspended to evaluate collateral and each borrower's ability to repay. The FDIC may resume the foreclosure process on certain loans. However, the FDIC intends to sell all loans. The new owner will determine the best collection method for sold loans. If your loan is sold, you will be notified by mail in advance of the sale. You have the right to refinance your loan with another institution.

MERCHANTS SHOULD HONOR CHECKS:

Merchants are encouraged to honor Bank of the Eastern Shore checks, as these will continue to clear up to the insured available balance until 5/25/2012. A copy of this document or the press release from www.fdic.gov can be provided since both documents indicate that insured deposits have been received by DINB of Eastern Shore. Additional copies will be available at the bank. Depositors or merchants can also call the FDIC at 800-591-2817 or contact staff at your former Bank of the Eastern Shore branch locations to confirm this information.


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OFFICIAL CHECKS ISSUED BY BANK OF THE EASTERN SHORE:

Official checks (interest checks, cashier's checks, certified checks, money orders, vendor payment checks) will continue to clear until 5/25/2012. After 5/25/2012, the FDIC will reissue official checks if payee information is available. If you hold an official check without payee information, please call 800-591-2817. Official checks are fully insured as noninterest-bearing transaction accounts.

OVERDRAFTS AND LINES OF CREDIT:

DINB of Eastern Shore will not allow overdrafts. Any checks overdrawing an account prior to Monday will be returned unpaid. ALL LINES OF CREDIT, including home equity lines, will be permanently frozen as of closing on Friday, April 27, 2012. You will need to establish a new line of credit with your new bank.

SAFE DEPOSIT BOXES:

You must empty your safe deposit box by 5/25/2012. After that date, you will be required to make an appointment by calling 800-591-2817. For safety reasons, you are encouraged to secure a new safe deposit box prior to emptying your box. If you do not clear your safe deposit boxes by 5/25/2012, the box will be drilled under dual control. The contents will be escheated according to state law. A letter will be sent to you at the address listed on the bank's record prior to your box being drilled. Unclaimed property can be located by visiting www.missingmoney.com or by contacting the State Treasurer's office or the office of unclaimed property.


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SHAREHOLDERS:

Shareholders have a claim against the receivership; however, they have the lowest priority of claim. You should discuss this with an accountant and/or the IRS concerning the exact requirement necessary to recognize the investment as a loss for tax purposes. The FDIC does not require stockholders to file a claim with the Receiver. However, we recommend that you keep our office informed of any address change should we need to contact you in the future. A letter will be mailed to all stockholders.

STATEMENTS AND OTHER ACCOUNT INFORMATION:

DINB of Eastern Shore will mail your account statements at the same time you have received them in the past. Customers who have not closed their accounts by close of business 5/25/2012, will receive a final statement approximately one week after that date. Please call or visit your branch to request any records you may need. After 5/25/2012, please call 800-591-2817 for assistance.

TAX REPORTING - 1098/1099s:

The FDIC as Receiver for Bank of the Eastern Shore will be responsible for mailing your 1099 tax information. Your 1098 reporting will be done by the FDIC as Receiver for Bank of the Eastern Shore or the servicer of your loan.

UNINSURED DEPOSITORS:

In the event you have uninsured deposits, it may be possible to offset your uninsured amount against a loan in the same name as your uninsured deposit account. You should make a telephone appointment with an FDIC Claims Agent at 800-591-2817 to discuss this. If it is determined that you have some uninsured funds, the FDIC will mail you an Uninsured Determination Letter (UDL). The UDL provides a Receiver's Certificate Number which entitles you to share proportionately in any funds recovered through the sale of the assets of Bank of the Eastern Shore. You may eventually recover your uninsured funds as assets are liquidated. For an explanation of this dividend process, go to https://closedbanks.fdic.gov/dividends.


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UNPAID BILLS OR CLAIMS:

Submit your invoice or documentation to the following address:

FDIC as Receiver for Bank of the Eastern Shore
1601 Bryan Street
Dallas, TX  75201
Attention: Claims Agent

SCAMS:

Please be advised you will not receive any communications from the FDIC to claim, unlock, or un-suspend your account or to provide any private information. Be watchful for and resist any scams to obtain information from you by individuals or entities stating they are acting on behalf of Bank of the Eastern Shore, DINB of Eastern Shore, or the FDIC. Should you be contacted by anyone requesting private information from you related to this event, please contact the Call Center 800-591-2817 and you will be directed to the appropriate person.


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ADDITIONAL QUESTIONS:

You may contact the FDIC Call Center at the number provided below with any additional questions:

FDIC Call Center
Toll free number 1-800-591-2817
Hours of Operation - Eastern Time
Friday, April 27, 2012: Until 9:00 p.m.
Saturday, April 28, 2012: 9:00 a.m. - 6:00 p.m.
Sunday, April 29, 2012: Noon - 6:00 p.m.
Monday, April 30, 2012: 8:00 a.m. - 8:00 p.m.
Thereafter: 9:00 a.m. - 5:00 p.m.

Additional information: www.fdic.gov/bank/individual/failed/easternshore.html


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Last Updated: August 9, 2012