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50 Fun Facts About Banks

Posted By Jim On 01/14/2008 @ 8:35 am In Banking | 10 Comments

Nearly 1 year ago I wrote 50 Fun Facts about Credit Cards [3], a post that was very well received, so I figured why not follow that up one year later with another 50 fun facts post – this time talking about banks. I like reading about history so the first batch of facts revolve around the central bank, starting with the First Bank of the United States and ending with our current Federal Reserve system (you can see the progression!), then wash that meal down with some more entertaining facts like some other firsts, a few mind boggling statistics, and then some fun stuff like bank robberies and banking sponsorship information. It was fun (and educational) putting it together so I hope you enjoy reading the list. (much like last time, I added in a few bonus facts!)

Central Bank History

  • The first chartered bank of the United States was the First Bank of the United States [4], formed in 1791 by The United States Congress.
  • If you want to visit, it’s located at Third Street, between Chestnut & Walnut Streets in Philadelphia; but it’s not open to the public.
  • The bank was the brainchild of then-Secretary of the Treasury Alexander Hamilton, who proposed that the bank sell $10M in stock to help establish its initial funding. Of the original $10M, $2M would be purchased by the United States. However, since the newly formed United States didn’t actually have $2M, the bank would loan the government $2M that the government would pay back in ten annual installments.
  • The creation of the bank was lumped in with an increase in excise taxes on liquor and the minting of paper currency. In order to push the bill through opposition to the excise taxes from southern members of Congress, Hamilton brokered a deal to support a bill that would move the capital from Philadelphia to what later would become Washington, D.C.
  • The First Bank of the United States was not the first chartered bank in the territory that is now the United States, that distinction belongs to the Bank of North America [5]. That bank was chartered on the last day in 1781 by the Congress of the Confederation.
  • The Bank of North America would be succeeded by the First Bank of the United States.
  • The Bank of North America, with national bank charter #1, still exists today and is held by Wachovia, N.A. Wachovia still operates a branch at the northwest corner of 6th and Chestnut in Philly, the site of the original bank.
  • As you may have expected, that Wachovia branch is the longest continuously operating branch bank in the US, having been there since 1781.
  • The Second Bank of the United States was chartered 5 years after the charter for the First Bank of the United States expired and the Second Bank was again located in Philadephia.
  • Why a Second bank if the government allowed the charter for the First Bank to expire? War! The US found itself unable to finance the War of 1812 and thus chartered a Second Bank of the United States.
  • There was quite a bit of controversy around the bank, there’s plenty of resources out there to read about it if you’re interested so I’ll skip it here, but eventually it went bankruptcy five years after the expiration of its charter in 1836.
  • If you want to visit, it’s located on Chestnut Street between 4th and 5th Streets and it’s open to the public free of charge( National Parks Service info page [6]).
  • There was no Third Bank of the United States, or any central bank, for 80 years following the expiration of the Second Bank’s charter. That’s when the Aldrich plan, named after Republican Senator Nelson W. Aldrich of Rhode Island, of fifteen regional central banks was floated and discussed.
  • Eventually, the Federal Reserve Act of 1913 instituted 12 Federal Reserve banks, headed by a seven member Federal Reserve board plus a single US currency, a Federal Reserve Note.
  • The twelve Federal Reserve banks are located in Boston (1), New York (2), Philadephia (3), Cleveland (4), Richmond (5), Atlanta (6), Chicago (7), St. Louis (8), Minneapolis (9), Kansas City (10), Dallas (11), and San Francisco (12).
  • All nationally chartered banks are required to become members of the Federal Reserve System, which means they must buy non-transferable stock in their regional Federal Reserve bank.
  • In the 1930′s, the Federal Reserve Act was amended to include the Federal Open Market Committee that consisted of the seven members of the Board of Governors of the Federal Reserve System and five representatives from the regional Federal Reserve banks.

Other Firsts (and Lasts)

  • Flatbush National Bank of Brooklyn, New York was the first bank to issue a credit card in 1946.
  • The first bank to be managed entirely by women? First Woman’s Bank of Tennessee, founded in 1919. Unfortunately, its founder, Brenda Vineyard Runyon, was unable to secure a successor after her health began to fail and it was eventually absorbed by First Trust and Savings Bank of Clarksville in 1926.
  • Curious to see a list of all the defunct banks in the United States? Check out this page on Wikipedia [7], it’s accuracy isn’t known.
  • As of this writing, the last bank to close was Miami Valley Bank in Lakeview, Ohio on 10/4/2007. It was closed by the Ohio Department of Commerce, Division of Financial Institutions.
  • The one right before that was the much more publicized NetBank, shuttered only a few days earlier on 9/28/2007.
  • The first bank Jesse James’ robbed was the Clay County Savings Association in the town of Liberty, it was the first armed robbery of a US bank after the Civil War.
  • Barings Bank, founded in 1762 and helped finance the Louisiana Purchase, Napolean’s war effort, and other notable historic events; collapsed after Nick Leeson’s losses of £827 million in Singapore futures contract speculation. It was sold to ING for £1! Barings Bank had been the oldest merchant bank in the City of London. (This was the subject of Rogue Trader [8])

Stats and Figures (Some Mind-boggling)

  • According to the Federal Reserve System’s National Information Center [9], the top five bank holding companies (in order) are Citigroup, Bank of America, JP Morgan Chase, Wachovia and Taunus (Deutsche Bank).
  • As of 9/30/2007, the top five hold $6,775,079,249,000.00 in assets. That’s six trillion, seven hundred seventy-five billion, seventy-nine million, two hundred forty-nine thousand dollars of assets.
  • Three of the top five are headquartered in New York City, NY (Citigroup, JPMorgan Chase & Taunus). Bank of America and Wachovia are headquartered in Charlotte, NC.
  • In 2006, there were 1,279 savings institutions according to the FDIC [10]. 435 were supervised by the FDIC, the balance were supervised by the Office of Thrift Supervision (OTS).
  • In 2005, there were 7,527 FDIC-insured banks with 72,775 branches and 80,302 offices at year end.
  • In 1934, there were 14,146 FDIC-insured banks (unknown number of branches) at year end.
  • At the end of 2005, the total assets of all FDIC-insured banks was $10,090,355,277,000.00. That’s ten trillion, ninety billion, three hundred fifty-five million, two hundred seventy-seven thousand dollars.
  • At the end of 1934, the total assets of all FDIC-insured banks was $46,437,000,000.00. That’s a mere forty-six billion, four hundred thirty-seven million dollars. Inflation adjusted according to the Bureau of Labor and Statistics and you’re talking about $676,801,950,000.00 in 2005 dollars.

Consumer Protection

  • If your bank has FDIC insurance, your deposits are protected up to $100,000.
  • To check if your bank is FDIC insured, use the FDIC’s Bank Find [11] tool. Just because they say they are insured doesn’t mean they are.
  • Credit unions deposits are protected under the National Credit Union Administration.
  • To check if your credit union is NCUA insured, use the NCUA Find A Credit Union [12] tool.
  • The insurance coverage increases to $250,000 if the account is a retirement account.
  • There are over a dozen Fed Regulations and laws that protect consumers, a page on the Chicago Fed website [13] has a list of all of them. You will notice a few popular ones such as the Fair Credit Reporting Act and Regulation CC (how long a bank can hold your check funds as they process). It may make for some dry reading but it’s useful information to know.
  • I wanted to specifically call out Regulation AA [14], Unfair or Deceptive Acts or Practices, which governs the procedures a consumer should follow to report unfair or deceptive acts or practices performed by a bank with respect to the extension of credit. This is especially appropriate nowadays but the regulation spells out specifically what you should do.

Actually Fun / Interesting Facts

  • Bank of America has merged/acquired plenty of other banks, the most prominent of which was the Bank of Italy. In fact, when Bank of Italy merged with Bank of America, it was the Bank of Italy’s founder that served as its head. So you could say that Bank of America could’ve just as easily been Bank of Italy!
  • The largest cash robbery, about $18.9 million) to have taken place in the United States was called the Dunbar Armored robbery [15], which took place at the Dunbar Armored facility in Los Angeles, CA. While everyone was caught, about $10M of the stolen loot was lost. It was an inside job and no bank was involved but it’s still worth mentioning, don’t you think?
  • The largest cash robbery of a bank was the Loomis Fargo bank robbery [16] in 1997, in which $17.3 million was stolen from a regional office vault in Charlotte, NC. Again, another inside job and the thieves were caught (so was 95% of the cash).
  • Moments before the US started bombing Baghdad, nearly $1 billion dollars was stolen from the Central Bank of Iraq [17] and considered the largest heist in history. $650 million was later recovered in the walls of one of Saddam’s palaces but the balance is still missing.
  • The N.A. after the name of a bank indicates it’s a national bank, it stands for “National Association.” It means that the bank is chartered by the Office of the Comptroller of the Currency.
  • The FSB after the name of a bank indicates that it is a Federal Savings Bank or a Federal Savings Association. It differs from a bank in that it’s overseen by the OTS and takes deposits for the purposes of lending it out for residential mortgages.
  • Savings and loans are slightly different, they’re like FSBs/Thrift banks but for all types of mortgages, not just residential ones. The distinction is very slight and the lines are blurring among the three types.
  • The North Hollywood shootout [18] occurred after the pair of heavily armed thieves robbed a branch of Bank of America.
  • The Riegle-Neal Interstate Banking and Branching Efficiency Act [19], passed in 1994, has a provision that states no bank may hold more than 10% of the all deposits in the United States. The bill also made it possible for banks to buy other banks headquartered in other states, this was previously illegal.
  • Bank of America is the official sponsor of the United States Olympic Teams, the National Football League, the National Hockey League, NASCAR (National Association for Stock Car Auto Racing), Major League Baseball, Minor League Baseball, and even Little League Baseball!
  • In the NFL, there are currently five stadiums sponsored by financial institutions. M&T Bank (Baltimore Ravens), Invesco (Denver Broncos), Lincoln Financial (Philadelphia Eagles), Bank of America (Carolina Panthers), and Raymond James (Tampa Bay Buccaneers).
  • In the NBA, there are currently five six arenas sponsored by financial institutions. TD Banknorth (Boston Celtics), Conseco (Indiana Pacers), TD Waterhouse (Orlando Magic), Quicken Loans (Cleveland Cavaliers), Key Bank (Seattle Supersonics), and Wachovia (Philadelphia 76ers).
  • In the MLB, there are currently five stadiums sponsored by financial institutions. Chase (Arizona Diamondbacks), Comerica (Detroit Tigers), Citizens Bank (Philadelphia Phillies), PNC (Pittsburgh Pirates), and Safeco (Seattle Mariners).
  • In the NHL, there are currently eight arenas sponsored by financial institutions. Wachovia (Philadelphia Flyers), Mellon (Pittsburgh Penguins), TD Banknorth (Boston Bruins), HSBC (Buffalo Sabres), Scotiabank (Ottawa Senators), BankAtlantic (Florida Panthers), Scottrade (St. Louis Blues), and Pengrowth (Calgary Flames) RBC (Carolina Hurricanes).
  • Blueprint for Financial Prosperity is not sponsored by any bank, but would certainly entertain offers!

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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/50-fun-facts-about-banks.html

[3] 50 Fun Facts about Credit Cards: http://www.bargaineering.com/articles/50-fun-facts-about-credit-cards.html

[4] First Bank of the United States: http://en.wikipedia.org/wiki/First_Bank_of_the_United_States

[5] Bank of North America: http://en.wikipedia.org/wiki/Bank_of_North_America

[6] info page: http://www.nps.gov/archive/inde/second-bank.html

[7] page on Wikipedia: http://en.wikipedia.org/wiki/Category:Defunct_banks_of_the_United_States

[8] Rogue Trader: http://www.bargaineering.com/articles/r/amazon.php?asin=B00002RAPA

[9] Federal Reserve System’s National Information Center: http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx

[10] FDIC: http://www2.fdic.gov/hsob/SelectRpt.asp?EntryTyp=20

[11] FDIC’s Bank Find: http://www2.fdic.gov/idasp/main_bankfind.asp

[12] NCUA Find A Credit Union: http://www.ncua.gov/indexdata.html

[13] Chicago Fed website: http://www.chicagofed.org/consumer_information/regulations_that_protect_consumers.cfm

[14] Regulation AA: http://www.chicagofed.org/consumer_information/regulations_that_protect_consumers.cfm#regulationaa

[15] Dunbar Armored robbery: http://en.wikipedia.org/wiki/Dunbar_Armored_robbery

[16] Loomis Fargo bank robbery: http://en.wikipedia.org/wiki/Loomis_Fargo_Bank_Robbery_%281997%29

[17] Central Bank of Iraq: http://en.wikipedia.org/wiki/Central_Bank_of_Iraq#The_robbery

[18] North Hollywood shootout: http://en.wikipedia.org/wiki/North_Hollywood_shootout

[19] Riegle-Neal Interstate Banking and Branching Efficiency Act: http://www.fdic.gov/regulations/laws/rules/6500-3500.html

Thank you for reading!