It wouldn’t have been true a month ago.
NetBank failed. And just 3 months ago I bought a house using this (and other, but mostly this) bank’s checking account. Man, I just barely dodged a painful bullet!
Congratulations on buying the house. You’ve got FDIC insurance on the NetBank account, so you should be able to get what remaining money you have in there real soon.
Hmm I believe I had an account at netbank at some time or another. I don’t recall if there funds in it
The FDIC insures up to $100 000, doesn’t it? So unless you had a huge amount of money socked away, you’d have been ok.
What does that mean, “NetBank failed?” Everyone who has money in whatever NetBank is will lose it? Is NetBank a brick-and-mortar bank? Is this part of the whole sub-prime thing? Banks are just failing?
Here is what netbank says on their webpage.
It means NetBank was shut down by the OTS for failing to meet basic standards of liquidity. As pointed out above, it’s an FDIC insured bank, so nobody’s losing their money, unless they had more than $100,000 in deposits. The deposit accounts have been sold to Bank of America, as I recall, and some of the crappy loan portfolio has been sold to someone else.
Small banks fail all the time. It’s nothing to get excited about. When Citibank and BoA start going tits-up, then you can panic.
ING Direct now owns my account.
Wow, I just sent a “BankMail” on Friday to close my NetBank checking account. It only had $0.03 in it, I opened a WaMu account last summer and hadn’t used my NetBank account in months.
I opened my NetBank account in 1999, when I was 22 y.o. college grad who suddenly found herself traveling for business five days a week. At the time NetBank was offering service that I just couldn’t find at brick and mortar banks, I recommended them highly to all my friends. Within a few years the other guys had just caught up.
I don’t know how it is in the States, but I love ING Direct. I have savings accounts, an RRSP, and as of this morning, set up a six-month GIC, since I’m trying not to touch the money in ING anyway.
Seriously, I get all excited on the first of every month to see how much interest I’ve earned. I log in at 6:45 a.m. to check it out. 
Still trying to find the cites but Citibank and BoA were recently allowed to go over the reserve limits set by the federal government because of exposure in the sub-prime mortgage crisis. Not tits-up but the bra straps have definitely been removed.
I’ve never been this turned on by financial talk.
I’ve been with ING for some time now. They’re pretty good.
Agreed. When my mortgage was due for renewal last year, I wasn’t enthralled with the financial institution that I was with. I was initially attracted to the interest rate at ING, spoke to them over the phone to try to find out what the downside was. I couldn’t find anything that I couldn’t live with. A year later, I’m a very happy client. I haven’t tried any of their other products yet, but I wouldn’t hesitate to if I identified a need. I’m usually pretty cynical and tough to impress. A endorsement like this from me is not typical.
I did some S&L closings in the early 90s, which was a long time ago and some details may be sketchy but…
Sounds like nobody lost anything, at least the web page implied that ING took over all accounts and balances, not just the FDIC insured amounts: when a bank fails a couple of things can happen:
- FDIC pays off the insured balances. Most depositors got FDIC-issued (well, RTC in my case as these were S&Ls) checks by the Monday after the bank was shut down.
- An acquiring bank can take over, but just the insured amount (e.g. you’d have your 100,000, just in the acquiring bank vs. the old one; I think if you had say 105,000 you’d only have 100K in the new bank. None of the banks I worked on went that way, so I’m not 100% sure that was even an option).
- Acquiring bank takes over and agrees to honor the failing bank’s balances in full. We called that a Purchase And Assumption. That sometimes happened at the very last minute, and was a cause for much celebration on the part of the people doing the closing as it meant we had a lot less painstaking work to do. Sounds like this is what happened with Net Bank and ING.
[aside]
Payouts could be a pain if people had more than the insured value in the bank. For most people this wouldn’t be an issue - we did one small institution in TX where only a handful of depositors were affected, and those only to the tune of a couple thousand. With larger deposits, or households with multiple accounts, they had to spend extra time determining what the insured balance really was. And if the bank held lots of deposits placed by brokerage houses, they didn’t usually know who really owned that money (let’s say you place 10,000 to invest through Billy Bob’s Brokerage House; then BBBH pools your money and gets a million-dollar CD and places at FailingBank SIPC NA PC XYZZY… where you happen to have a personal checking account for 100,000… guess what - the money you have there through Billy Bob’s isn’t covered! This displeases Billy Bob, who (IIRC) has to fork out the 10,000 of his own pocket because he told you it was insured.
As I understood it at the time, folks who invested through the brokerage houses didn’t always even know where their money was placed so they couldn’t manage their insured limits themselves. That seems to have changed - I put a little money into CDs through a brokerage house recently and I knew exactly what bank it would be placed with. Not that we had enough money at any bank to worry about hitting the 100K limit, but still… [/aside]
- This is the largest bank failure in Georgia history.
- This is the largest bank failure since the Bush I failures.
- Commentators say that people had been urging the feds to take over NetBank for quite some time. A similar problem made the earlier round of failures worse when closures were held off for political reasons. A lot of people are worried that there are far more banks in similar trouble but we haven’t heard about them yet.
- The Freeman guy who took a poorly managed bank, ran it into the ground and then got fired now works for BankAtlantic in FL. Anybody got any money there?
Holy cow! Just heard about it on this board today, and I have lotsa (okay, lots to me,) of money in former NetBank. At least I haven’t heard horror stories about ING, so I might stick with them unless I do.
But oddly enough, it makes me less likely to pull all my money out of ING and put it all into my WaMu account, since part of the reason I still had cash in NetBank was in case one bank went belly-up I could get cash temporarily from the other one.
I’ve gotta say, I’ve been with them (ING) for several years now, and I’m as happy as I can be with 'em. Simple interfaces, over-the-top security (at least it seems to be) high savings interest rates and fair CD rates with, like, a 2 click set up. Yep, happy about covers it.