Destroyer of Ignorance
WASHINGTON (Oct. 10) - Regulators on Friday shut down two small banks, Main Street Bank in Michigan and Meridian Bank in Illinois.
They brought to 15 the number of federally insured banks that have failed this year.
The Federal Deposit Insurance Corp. was appointed receiver of the banks. Main Street Bank, based in Northville, Mich., had $98 million in assets and $86 million in deposits as of Oct. 7. Meridian Bank, based in Eldred, Ill., had assets of $39.2 million and deposits of $36.9 million as of Sept. 25.
The FDIC said all of Main Street Bank's deposits will be assumed by Monroe Bank & Trust of Monroe, Mich. The two offices of Main Street Bank will reopen Saturday as branches of Monroe Bank & Trust.
All of Meridian Bank's deposits will be assumed by National Bank of Hillsboro, Ill. Meridian's four offices in Altamont, Carlyle, and Eldred will reopen for normal hours on Saturday, and its Alton office will reopen Tuesday, as branches of National Bank.
The 15 bank failures so far this year compare with three for all of 2007, and federal banking officials have said that more banks are in danger of collapse.
Regular deposit accounts are now insured up to $250,000 as part of the financial rescue legislation enacted last week. The FDIC formally approved the increase from $100,000 per account at a meeting on Friday. The limit on individual retirement accounts held in banks remains at $250,000.
Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering many banks nationwide.
The 15 federally insured banks and savings and loans to fail this year include two major thrifts, Washington Mutual Inc. and IndyMac Bank, and more collapses are expected. The deposit insurance fund is now at $45.2 billion - below the minimum target set by Congress and the lowest level since 2003.
Of the roughly 8,500 FDIC-insured banks in the country, 117 were considered to be in trouble in the second quarter - the highest level in about five years and up from 90 in the first quarter. The agency doesn't disclose the banks' names.