ANB Financial Depositors Retroactively Covered by FDIC
by July 26, 2010 12:00 am 76 views
Some 26 months after the Federal Deposit Insurance Corp. closed ANB Financial’s doors, depositors who lost money in the failure will eagerly watch for the mailman.
The FDIC said on July 21 it will cut checks to many former uninsured depositors of six banks that failed between January 1 and October 3, 2008. The retroactive insurance increase is thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act signed by President Barack Obama.
Under the Act, the new maximum of $250,000 in deposit insurance will retroactively apply to depositors who were underinsured when those banks failed.
The maximum insurance at the time was $100,000, but the FDIC raised the insurance to $250,000 temporarily at the end of 2008. The Dodd-Frank Act makes the higher coverage permanent and will reimburse depositors who fell through the cracks.
ANB Financial was closed by the FDIC on May 9, 2008. At the time, the FDIC said there were 647 uninsured accounts valued at $39.2 million.
“I’m hoping to get some money back based on the information I was told earlier,” said Ralph Clift of Bentonville Wednesday afternoon.
Clift was part of a class action complaint against the directors of ANB filed in July 2008 that was later dismissed by a federal judge.
Clift lost about $60,000 in uninsured deposits when ANB failed and has received about $20,000 from the FDIC in the last two years, so he’s hoping his check will be in the $40,000 range.
“The personnel working at the bank never made it clear to me that I would not be covered,” Clift said. “They never said a damn word. Next thing I know the bank fails and I lost $60,000.”
Andrew Gray, spokesman for the FDIC, couldn’t say exactly how much Arkansas depositors will get back but said it would be close the $39 million mark cited in 2008. The combined retroactive coverage will cost the FDIC about $200 million, he said.
Paul Byrd, a trial lawyer with the Hare Wynn Newell & Newton firm of Little Rock, headed Clift’s class action suit.
“I’m extremely happy for our clients that they’re going to be compensated,” he said.
Byrd is disappointed, however, the directors of ANB “didn’t have to pay up.”