LITTLE ROCK — Almost 650 former customers of ANB Financial of Rogers will receive checks - probably totaling $26 million, or about two-thirds of the $39 million they lost - from the Federal Deposit Insurance Corp. in the next several days.
The Dodd-Frank Wall Street Reform and Consumer Protection Act signed by President Barack Obama on Wednesday permanently raises the maximum insurance coverage to $250,000 per account. In addition, the FDIC said, the act made the increase to $250,000 retroactive to Jan. 1, 2008.
Between Jan. 1, 2008, and Oct. 3, 2008, when the FDIC temporarily raised the limit to $250,000, six banks in the country failed, including ANB, which was closed in May 2008. The Rogers bank had about $2 billion in assets.
At the time ANB failed, the FDIC said 647 ANB customers had a total of $39.2million that exceeded the $100,000 insurance limit. The FDIC said it will begin sending out checks today to those customers. No interest will be paid on the money, the FDIC said.
For more information, uninsured depositors of ANB can call the FDIC at (866) 806-5919 or visit fdic.gov/ bank/individual/failed/ dodd_frank_q_and _ a.html.
Since ANB failed, the FDIC has paid much of the money back to depositors from proceeds gained in selling ANB’s assets. Iberiabank of Lafayette, La., bought $213 million in ANB deposits in July 2008, but the FDIC also sold off other assets.
Ralph Clift of Bentonville, a former ANB customer, said Wednesday that he had about $60,000 with ANB in excess of the $100,000 limit. Clift said he already has received about a third of the $60,000 from the FDIC through the sale of assets.
“I had pretty much writ-ten it off,” Clift, a 65-year-old retiree, said Wednesday.
Clift filed a class-action lawsuit in 2008 against officers and directors of ANB, seeking to recover the amount ANB depositors had above the $100,000 insured limit. That case was dismissed recently.
“I’m extremely happy that the people who were harmed are getting recovery,” said Paul Byrd of the Little Rockfirm of Hare, Wynn, Newell & Newton, which represented Clift and similar depositors. “But I’m disappointed that the people who were responsible for this didn’t pay for it.”
The ratio of refunds that Clift already has received likely means that the FDIC has paid the 647 customers a total of about $13 million, or about a third of the $39.2 million, in the past two years, said Andrew Gray, a spokesman for the FDIC.
Gray said the FDIC normally makes such payments proportionately.
“This is a positive that these uninsured depositors are being treated the same as all the depositors who were affected after Oct. 3 [2008],” Gray said. “The financial crisis occurred throughout 2008, so in that sense it’s important that they’re on equal footing as others.”
Tim Yeager, an associate professor of finance at the University of Arkansas at Fayetteville, said the FDIC payment is not “so much fair as it is merciful.”
The money will probably be “a small boost to the[Northwest Arkansas] economy, but it will certainly help out these people a lot,” Yeager said.
The other five banks that failed during the first 10 months of 2008 were Hume Bank of Hume, Mo.; IndyMac Bank of Pasadena, Calif.; First Priority Bank of Bradenton, Fla.; The Columbian Bank and Trust Co. of Topeka, Kan., and Silver State Bank of Henderson, Nev.
Increasing the insured limit to $250,000 retroactively will cost the FDIC about $200 million, Gray said.
Northwest Arkansas, Pages 9 on 07/22/2010