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A Teller's Tale: FDIC Bank Closure
My experience as a teller during an FDIC bank seizure
In July of 2009, I was employed as a teller at a regional bank based in Illinois. According to the FDIC, "No advance notice is given to the public when a financial institution is closed." However, in the weeks prior to our institution's official closure, several large business accounts who typically sent us daily cash deposits suddenly stopped all account activity. This was odd; in less than a week we went from receiving multiple armored car deliveries to virtually none at all. These account holders seemed to know something that we didn't, and it wasn't until the last day of July when we learned what it was.
On that memorable day, all of the bank employees were asked to stick around after closing time. Some of us suspected a closure; we knew the institution was struggling, but the full extent of its problems remained unclear. We completed all of our end of day procedures and anxiously assembled ourselves to await the news. Shortly thereafter, two FDIC employees (and a local police officer) arrived with some official looking documents. They thanked us for waiting and one began to read from the declaration: our institution "was hereby closed by the Illinois Department of Financial and Professional Regulation" due to "unsafe and dangerous business practices." The FDIC had been named Receiver, and they wasted no time. Thankfully, another institution had been willing to assume our assets, accounts and branches. Had this not been the case, all of us would have been unemployed after the government settled matters with the bank's customers.
The FDIC representatives were patient and understanding. They answered our questions as honestly as they could and even had dinner delivered to the location for us. After we ate, we began the tedious process of inspection and inventory. The "assuming institution" needed to know what it was getting; we compiled reports and logs, cash and negotiable instruments were audited, equipment was tagged and recorded, combinations and security procedures were relayed. This same process was taking place within all of the old bank's branches, and in the coming months would be repeated by external auditors and representatives of the assuming institution.
The following Monday, we reopened as a new branch of a different bank. There were lots of customer questions and concerns to be addressed, but the daily operations remained remarkably unchanged for quite some time. All of the front line staff became public relations liaisons, repeatedly assuring customers that yes we still had their money, they could continue to write checks and use debit cards as they always had, and loan payments still needed to be made. Despite our best efforts, some customers just weren't comfortable knowing that their financial relationship was now controlled by a previously unheard of and out of state institution. In addition, the new bank was unwilling to honor the interest rates on many Certificates of Deposit, and it wasn't obligated to. The resulting closure of those accounts (with the early withdrawal fees waived, of course) coupled with customer skepticism of new and unknown management lead to an influx of lost business.
Over time we became part of the new bank, and things slowly returned to normal. Signs and logos were changed, new protocols and procedures were adopted and customer unease gradually faded. The new owners retained most of the old bank's employees and were eager to make them part of the family, implementing changes with as much accommodation as possible. Even now some transition is still taking place behind the scenes. Workers continue to develop creative ways of merging various financial practices and proprietary computer software into one workable system. Customers are greeted by the same faces who had helped them before the closure and employees are embracing their new roles.
We're all happy to still be employed, and hope to never eat dinner paid for by the FDIC again.