When a Bank Fails - Facts for Depositors, Creditors, and Borrowers 1
Priority of Payments and Timing
How quickly will the Receiver make payments on Receiver's Certificates?
By law, after insured depositors are paid, uninsured depositors are paid
next, followed by general creditors and then stockholders. In most cases,
general creditors and stockholders realize little or no recovery. Payments
of uninsured funds only, called dividends, depend on the net recovered proceeds
from the liquidation of the bank's assets and the payment of bank liabilities
according to federal statute. While fully insured deposits are paid promptly
after the failure of the bank, the disbursements of uninsured funds may
take place over several years based on the timing in the liquidation of
the failed bank assets. The dividend payment history for all failed banks
closed since October 1, 2000 is available at http://www2.fdic.gov/divweb/index.asp.