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Listen to how the FDIC Seizes a Bank
Posted By Jim On 04/01/2009 @ 2:26 pm In Banking | 1 Comment
Did you watch the 60 Minutes segment about the FDIC seizing a bank ? If you were as fascinated with the process as I was, I have a treat for you. This American Life’s 377th Episode, Scenes From a Recession  [download ], features the FDIC seizing Bank of Clark County , based in Vancouver, Washington, and selling them to Umpqua Bank back in January.
This American Life’s story is a lot more detailed than the 60 Minutes story on the bank seizure process. They talk to more people, are more in-depth (minute by minute accounts), and give a much deeper picture into how the seizure/failure process works. It really does sound like a SWAT operation, except with accountants (everything happens so quickly). 60 Minutes focused a lot on customers freaking out, like the guy going in with a briefcase to get all of his money, whereas This American life focused more on providing insight into the process. If you’re intrigued by this type of “behind the scenes” stuff, I recommend listening to the story. The seizure is in Act 2 which starts around the 25 minute mark.
The really tragic part of this story, rather than the just tragic part of everyone losing their jobs, is that Todd Zalk , Vice President Business Relationship Office, just bought $25,000 of stock in his own company just a few months before the failure. It’s a bit of insult to injury. A lesson everyone can take away from this is that you should diversify your investments from your job. Buying stock in your own company is very risky. It’s great when times are good, but really bad when times are bad. I feel for the guy because it appears he’s very good at what he does, loyal, and should be able to put those to good use at another bank (though the bank failed in January and his LinkedIn profile still says Bank of Clark County).
Act Two. Unbreaking the Bank.
NPR reporter and Planet Money contributor Chana Jaffe-Walt reports this story of what it really looks like when a bank fails and is taken over by the FDIC. She talks to the former employees and a handful of FDIC staff about the Friday night when the Bank of Clark County was interrupted and closed by 80 FDIC employees, who had every step of their secret operation down to a science. (20 minutes)
If you have a full hour, I recommend listening to the other two segments. The first involves residents of partially-renovated condominiums, the troubles they face with owning one condo in a building that sits largely vacant. The third act talks to five employees at different Circuit City locations and their experience liquidating a store in two months (surprise fact? They made more money after the liquidation firm came in and raised prices in three days than they had the previous week).
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 Email: mailto:?subject=http://www.bargaineering.com/articles/listen-to-how-the-fdic-seizes-a-bank.html
 60 Minutes segment about the FDIC seizing a bank: http://www.bargaineering.com/articles/watch-the-fdic-seize-a-bank.html
 Scenes From a Recession: http://www.thisamericanlife.org/Radio_Episode.aspx?episode=377
 download: http://podcast.thisamericanlife.org/podcast/377.mp3
 Bank of Clark County: http://www.bankofclarkcounty.com/
 Todd Zalk: http://www.linkedin.com/in/toddzalk
Thank you for reading!