A US government organization called the Federal Deposit Insurance Corporation (FDIC) offers depositors insurance in the event that their bank fails. Over $1 billion in insurance claims resulting from bank failures were settled by the FDIC in 2020. The fact that it paid out $2 billion rather than just $120 million in 2019 demonstrates how the COVID-19 outbreak affected the banking sector.
The FDIC has a number of measures at its disposal to assist financially struggling banks. The selling of failing banks to successful banks is among the most frequent. When a bank fails, the FDIC buys it, sells its assets to another bank, and then uses the money from the sale to reimburse depositors. A “purchase and assumption” deal describes this process. In order to keep struggling banks viable until they can recover, the FDIC can also give them loans.
Financial institutions that are owned and run by African Americans are known as black-owned banks. For minority populations that regular banks have historically underserved, these banks are a valuable resource. OneUnited Bank, Carver Federal Savings Bank, and Liberty Bank and Trust Company are a few of the biggest banks in the US that are controlled by people of color.
There are various procedures you must follow if you want to launch a bank franchise. You must first conduct study on the banking sector to find a void you can fill. The next step is to create a business strategy and find finance for your project. A bank charter, which is a license to run a bank, is another requirement. Finally, to assist you in managing your franchise, you will need to recruit a group of seasoned bankers.
You normally need to present some personal identity, like a driver’s license or passport, and evidence of address, such a utility bill, in order to create a bank account. A minimum deposit may also be needed to open an account with some banks. Depending on the type of account you’re opening and the bank you’re using, the amount of this deposit may change. Find the account that best meets your needs by shopping around and comparing several banks.
As a result of bank failures, the FDIC paid out over $1 billion in insurance claims in 2020. The agency can assist financially ailing banks using a variety of instruments, including as loans to keep struggling banks afloat and the sale of failed banks to successful banks. Black-owned banks are a valuable resource for underserved areas, but opening a bank franchise needs much preparation, finance, and study. You normally need to present personal identity, address verification, and, in some cases, a minimum deposit to open a bank account.