Each depositor insured to at least $250,000 per insured bank


Failed Bank Information

Dodd-Frank Wall Street Reform and Consumer Protection Act New Deposit Insurance Determination Question and Answer Guide

1.  What is the Dodd-Frank Wall Street Reform and Consumer Protection Act?

The Dodd-Frank Wall Street Reform and Consumer Protection Act (The Dodd-Frank Act) retroactively increases the Standard Maximum Deposit Insurance Amount (SMDIA) from $100,000 to $250,000 for the period of January 1, 2008 to October 3, 2008. The six failed financial institutions affected by this retroactive increase are:

  • Hume Bank, Hume, MO;
  • ANB Financial, N.A., Bentonville, AR;
  • IndyMac Bank, F.S.B., Pasadena, CA;
  • First Priority Bank, Bradenton, FL;
  • The Columbian Bank and Trust Company, Topeka, KS; and
  • Silver State Bank, Henderson, NV.

2.  How will the FDIC apply the deposit insurance increase to uninsured depositors of the six affected failed institutions?

The Dodd-Frank Act requires that, in applying the $250,000 ceiling amount retroactively to January 1, 2008, the FDIC must subtract: (1) deposit insurance previously paid to depositors, and (2) any dividend payments or offset made to depositors by the FDIC as receiver of the failed insured institution. Thus, for these six institutions, these amounts are subtracted from the $250,000 insurance limit.

Below are several examples of how this retroactive coverage works:

Payment of Additional Deposit Insurance

Example 1. If you had single-ownership deposits of $300,000 at a bank that failed on January 1, 2008, you have received $100,000 of insurance coverage (corresponding to the $100,000 ceiling amount effective on the date of failure). If the FDIC, as receiver of the failed bank, also paid you a 50% dividend on the amount of your uninsured deposits, you have received, to date, a cumulative amount of $200,000 (insurance coverage of $100,000 plus a dividend of $100,000). Applying the retroactive $250,000 coverage amount under the Dodd-Frank Act, you are now entitled to an additional payment of $50,000.

Example 2. If you had single-ownership deposits totaling $400,000 at a bank that failed on January 1, 2008, the FDIC's deposit insurance determination provided you $100,000 of insurance coverage (corresponding to the $100,000 ceiling amount effective on the date of failure). If the FDIC, as receiver of the failed bank, also paid you dividends totaling $50,000, you have received, to date, $150,000 (insurance coverage of $100,000 plus $50,000 in dividends). Applying the retroactive $250,000 coverage amount under the Dodd-Frank Act, you are now entitled to an additional $100,000 in deposit insurance thereby increasing the total payments to $250,000. The FDIC also will issue you a revised Receiver’s Certificate for $150,000.

No Additional Payment of Deposit Insurance

Example 3. If you had single-ownership deposits of $400,000 at a bank that failed on January 1, 2008, you received $100,000 of insurance coverage (corresponding to the $100,000 ceiling amount effective on the date of failure). If the FDIC, as receiver of the failed bank, also paid you a 50% dividend on the amount of uninsured deposits, you have received, to date, a cumulative amount of $250,000 (insurance coverage of $100,000 plus a dividend of $150,000). Because you have received combined payments of $250,000, you are not entitled to any additional payment under the Dodd-Frank Act.

Example 4. If you had single-ownership deposits totaling $125,000 at a bank that failed on January 1, 2008, the FDIC's deposit insurance determination provided you $100,000 of insurance coverage (corresponding to the $100,000 ceiling amount effective on the date of failure). If the FDIC, as receiver of the failed bank, also paid two dividends aggregating $25,000, you would have received, to date, $125,000 (insurance coverage of $100,000 plus $25,000 in dividends). Applying the retroactive $250,000 coverage amount under the Dodd-Frank Act, you will not receive an additional deposit insurance payment. You have already received payments for the full account balance.

3.  When can depositors from ANB, Columbian, IMB, etc. expect to receive additional checks for deposit insurance?

The checks were mailed on Thursday, July 22, 2010. If you have not received your check by Wednesday, July 28, 2010, please contact the FDIC at 1-866-806-5919.

4.  What about interest on the amount being returned? Will I be paid accrued interest?

The new law does not provide for the payment of any interest.

5.  Can my funds be wired to my bank?

The checks were mailed on Thursday July 22, 2010. If you have not received your check by Wednesday July 28, 2010, please contact the FDIC at 1-866-806-5919. If it is necessary to reissue your additional deposit insurance payment, any request for a wire transfer must be in writing and provide pertinent wiring instructions. Wire transfer fees may apply.

6.  How do I notify FDIC of a change in my address?

You must notify the FDIC of your change in address in writing and include your name, old and new addresses, your tax identification number, the failed bank name and deposit account number(s), and your signature. Mail the information to the following address:

Depositors of Indy Mac Bank: Depositors of Other Institutions:
FDIC
ATTN: Claims Department
1601 Bryan Street
Dallas, TX 75201
FDIC
ATTN: Claims Department
1601 Bryan Street
Dallas, TX 75201

7.  What forms do I need to complete to be eligible for additional insurance coverage under the recently passed legislation?

If additional documentation is needed to complete the insurance redetermination, you will be contacted by an FDIC Claims representative. You will not be asked for your account number or other personal information over the phone. Please do not give out personal information to anyone who calls representing themselves as an FDIC employee.

8.  What if I disagree with the FDICís determination under the increased SMDIA?

In the event you disagree with the FDICís new determination with respect to your uninsured deposit balances, you may seek a review of the FDICís new determination in the United States District Court for the federal judicial district where the principal place of business of the failed institution was located. 12 U.S.C. ß 1821(f)(4). You must request this review not later than 60 days after the date of the notice to you.

9.  Will I receive a 1099? How should I handle this for tax reporting purposes?

The additional deposit insurance payment is subject to Internal Revenue Service (IRS) reporting. A 1099 is only issued for payment of interest. For example, if part of the deposit insurance payment represents accrued interest on your deposit account, from the time of closing, a 1099INT will be mailed for 2010.

10.  I am a deposit broker or I have a deposit through a broker.

The Dodd-Frank Act retroactively increases the coverage amount for Brokered Deposits also. If you had your deposit through a broker, you must contact your broker with any questions. If you are entitled to an additional insurance payment, your insured funds will be wired to your broker on your behalf.

Last Updated 01/12/2012