Here come the internet bank failures...
09-28-2007, 03:04 PM
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Here come the internet bank failures...
Online bank NetBank closed by U.S. regulators
FDIC to oversee customers' access to insured funds
By Robert Schroeder, MarketWatch
Last Update: 6:11 PM ET Sep 28, 2007
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WASHINGTON (MarketWatch) -- U.S. banking regulators shut down a Georgia-based online bank on Friday due to high levels of mortgage-related losses.
The Office of Thrift Supervision closed down NetBank Inc. (NTBK: 0.07, -0.01, -13.9%) , a thrift with $2.5 billion in assets, and appointed the Federal Deposit Insurance Corp. as receiver.
The OTS said the bank experienced significant losses beginning in 2006 due to defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls and failed business strategies.
It was only the second bank failure in the past three years.
The FDIC said ING Bank has agreed to assume $1.5 billion of the failed bank's insured deposits.
NetBank had about $109 million in 1,500 deposit accounts that exceeded the federal deposit insurance limit of $100,000. Those customers will become creditors of NetBank's receivership, the FDIC said.
FDIC to oversee customers' access to insured funds
By Robert Schroeder, MarketWatch
Last Update: 6:11 PM ET Sep 28, 2007
Print E-mail Subscribe to RSS Disable Live Quotes
WASHINGTON (MarketWatch) -- U.S. banking regulators shut down a Georgia-based online bank on Friday due to high levels of mortgage-related losses.
The Office of Thrift Supervision closed down NetBank Inc. (NTBK: 0.07, -0.01, -13.9%) , a thrift with $2.5 billion in assets, and appointed the Federal Deposit Insurance Corp. as receiver.
The OTS said the bank experienced significant losses beginning in 2006 due to defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls and failed business strategies.
It was only the second bank failure in the past three years.
The FDIC said ING Bank has agreed to assume $1.5 billion of the failed bank's insured deposits.
NetBank had about $109 million in 1,500 deposit accounts that exceeded the federal deposit insurance limit of $100,000. Those customers will become creditors of NetBank's receivership, the FDIC said.
Sure is nice that there is regulation of the banking system. Imagine if these customers lost all of their money. Plus, I am pretty sure that ING is taking 1.5 million, not billion.
