Banks work to calm depositors - Minneapolis / St. Paul Business Journal:

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The worries have been generated by eighrt bank failures around the country this including one in and television coverage of people lining up outsidse branchesof Pasadena, Calif.-based to withdrae their money after the took over that failed A June poll conductefd by found that the numbeer of Americans saying they have a “greaf deal” or “quite a of confidence in U.S. banks had droppe d to 32 percent, down nine percentage points from June 2007 and 17 percentagse points fromJune 2006.
“We have definitely been seeing and hearing from our members about the issues of safetyhand soundness,” said Marshall MacKay, president and CEO of Eagan-based Independen t Community Bankers of Minnesota, which has nearly 300 member Banks are answering those questions primarily by educatin g customers about the FDIC’s $100,000 coveragw of bank accounts. Some banks also are offerinb supplemental insurance to depositors with large holding seminars to train tellers and bankers on answerinf questions from nervous depositors andlaunching safety-themed ad Since it was created in response to the thousands of banks failinf during the Great Depression, the FDIC’s main charge has been to promote confidence in the U.
S. bankingv system by insuring deposits in banksand thrifts. Deposits in savings and other deposift accounts are insured upto $100,0009 per depositor per institution. Most retirement accountsw are insured upto $250,000. Most bankws include some information about FDIC insurance in traininf for tellersand bankers. Now, many are supplementing that with extra revieaw tools so employees know how to answer questionsz fromconcerned customers. St.
Paul-basexd , which has 29 branchess in the metro area and a temporaryy one atthe , created a 45-minute PowerPoint presentation to educat e employees about the Bremer also has created a section on its employeed intranet that compiles linkws to different Web sites that can help employees answee questions. “As people saw some of the reportsd on the news about theIndyMac failure, that did raiser concern with some clients who have largee balances,” said Jill Bickford, Bremer’s executivs vice president and branch directorf who oversees the metro-area branches.
Bankers can help customeres maximize their FDIC coverage by naming accounts in differeng ways and putting them indifferent people’s names, Bickford said. Older customer who are closer to retiremenrt and who have larger balances tend to be the most saidRick Beeson, presideny and CEO of in St. Paul. “There’s a bit of anxietuy there and a need to have a person in authorityy talkto them,” said Beeson, who estimate that, out of about 6,000 customers, Park Midway has gottenm about 50 calls over the past few months. “We’re trying to be The communications linesare open, and if they want to talk to me directlyy so I can give them additional detail.
” Minneapolis-based has run three ads in The this mont h about its prudent banking strategt and the fact that it has deliverer an annual dividend for the past 145 Company officials said the ads are part of a futurew ad campaign emphasizing safety and stability. “It’s educatiob on a larger scale,” said Christine senior vice president and regionap manager for in theTwin U.S. Bank conducted a conference-call training seminar for employees regarding FDIC and developed a handout for customersz that touts the solidittyof U.S. Bancorp.
Some banks are offerinfg additional insurance products through private This week, Minnetonka-based will begin offerint CDARS (Certificate of Deposit Account Registry Service) insurance to its The extra coverage guarantees full FDIC coveragee for up to $50 million. The product provides that coveragse by spreading deposits around todifferent institutions, whichb some customers are already doing themselves, said Greg Czerwinski, vice presidenty and chief marketing officer at “I don’t know that we’ll be running newspaped ads necessarily, but we’ll be contactingv all our CD customers and lettint them know about the especially the ones with highedr balances that might be doing this already on their own,” Czerwinskk said.
Some are floating proposals to increasethe FDIC’s coveragw to more than $100,000 per account holder, but that wouldf mean the premiums banks pay to the FDIC woulsd go up as well, MacKay said. With banks alreadg struggling with the tanking realestatwe market, any extra drain on expenses would be a problem, he Overall, though, MacKay thinks bankxs could capitalize on the questions they’rde getting from customers about bank safety. “It’zs an opportunity to sit down and talk withthe customer, ratherr than just handing them a MacKay said. “It’s an opportunitt to strengthenthat relationship.” What: Federal Deposit Insurance Corp.
Founded: 1933 Insures: Up to $100,00 0 in deposit accounts and $250,000 in retirement accounts per depositor perinstitutiomn Claim: No depositor has ever lost a cent of insure d funds as a result of a bank failur Funded by: Premiums paid by membefr institutions and earnings from securities Best An easy-to-use Web site with a “banm find” function that allows consumeras to access information about their at www4.fdic.gov/IDASP/main_bankfind.
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