Banking Industry going through hard times thanks to Biden's inflation

FDIC Problem Bank List: 63 Banks Now on Watch in 2024

Too big to fail?

The FDIC is not telling us what banks are on their watch list...confidentiality they say. This is not helpful to us, the consumer, but it avoids a run on the bank.

"Here's a breakdown of what it is and how it works:

• Confidentiality: The list itself is not publicly available, which allows the FDIC to work with troubled banks discreetly to help them improve their condition.

• Identification Process: Banks are assigned a CAMELS rating by FDIC examiners. This rating looks at various aspects of the bank's health, including Capital, Assets, Management, Earnings, and Liquidity. Scores range from 1 (best) to 5 (worst). Banks with CAMELS ratings of 4 or 5 are placed on the Problem Bank List.

• FDIC Intervention: If a bank remains on the Problem List and their situation doesn't improve, the FDIC may take steps to intervene. This could involve selling the bank to a healthier institution or taking control and liquidating it, with insured deposits being paid back to depositors.

As we move through 2024, the U.S. banking system faces significant challenges, with reports indicating a staggering $517 billion in unrealized losses threatening the stability of 63 banks. This situation has brought the health of the entire system under intense scrutiny, raising concerns about potential insolvency and the broader implications for the economy.

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My bank, Wells Fargo, leads the pack with at least 88 bank closure filings, according to the Office of the Comptroller of the Currency. They closed our wonderful branch on Lake and Federal and we have been forced to use their branch on North Dixie. I continue to do business with them as I have been with them when I started banking here, first at The Mall Bank which was taken over by Wachovia and that one taken over by Wells Fargo.

Wells Fargo is one of the country’s oldest banks, with a history spanning over 160 years. In the last few years, the bank has been rocked by several scandals, beginning with a large-scale attempt to artificially boost its number of accounts — followed by hefty fines, legal fees and a $1.95 trillion cap on its assets. But it remains one of the largest banks in the U.S.

My thinking has always been, too big to fail. I might be in fantasy land.