If The Bank Fails The bank customer will usually find out their bank failed when they get a letter stating that another bank has taken over the accounts. FDIC does not give advance notice to the public when a financial institution is closed. If all of the accounts are fully FDIC insured the bank customer loses nothing and access to all money is usually immediate. If you have uninsured deposits, life is more difficult. When a bank fails and FDIC is appointed as receiver, FDIC will sell the institution’s assets to pay depositors and creditors. If any excess cash is generated – after the administrative expenses of the FDIC receiver are taken care of – then the receiver may declare and distribute a dividend to claimants. First in line to claim any money are the remaining uninsured deposits, followed by institution liabilities, subordinated obligations, and then obligations to shareholders. When Do Uninsured Depositors Get Paid? Uninsured depositors may get a special Advance Dividend usually within 30 days after the bank closes. Every quarter FDIC, as the receiver, will determine the net proceeds available from converting failed bank assets and, if money’s available, pay out a Traditional Dividend until all the money’s gone. The following chart lists banks that have failed since 2001, the date they closed and the total dividends paid by the updated date listed. All information was obtained from the FDIC web site www.fdic.gov.

Dead Banks (Last web site update 27 January 2012)
*FDIC news releases frequently say "all deposits" are assumed by the new bank, this would seem to include uninsured deposits as well. And yet in almost all instances, Sanderson State Bank of Texas, Franklin Bank, Horizon Bank, Mirae Bank, Waterford Village, First Piedmont Bank, Vineyard Bank, Temecula Valley Bank, Millennium Bank, First National Bank of Danville, First State Bank of Winchester, John Warner Bank,  Rock River Bank, Founders Bank, Elizabeth State Bank, Horizon Bank, American Southern Bank, America West Bank, Westsound Bank, First State Bank of Winchester, assorted Security Banks and FirstCity Bank to name a few, altho FDIC said "all deposits" were covered, the uninsured depositors have only received a fraction of their uninsured deposits after months of waiting. I have raised this point with two different officials of FDIC who maintained "all deposits were covered" until I bring up these exceptions and then their answer becomes "no comment". Based on this I would suggest that access to uninsured deposits in a failed bank should never be assumed.

21 July 2010 FDIC PRESS RELEASE.

The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law today permanently raised the maximum deposit insurance amount to $250,000. In addition, the Act made this increase retroactive to January 1, 2008.

The provision making the law retroactive means that the $250,000 deposit insurance amount applies to banks that failed between January 1 and October 3, 2008. These insured institutions are:

• Hume Bank, Hume, MO

• ANB Financial, N.A., Bentonville, AR

• IndyMac Bank, F.S.B., Pasadena, CA

• First Priority Bank, Bradenton, FL

• The Columbian Bank and Trust Company, Topeka, KS

• Silver State Bank, Henderson, NV

This retroactive increase has reduced the number of uninsured depositors at these failed institutions from more than 10,000 to approximately 500. The FDIC will mail checks to uninsured depositors tomorrow, July 22, 2008.

Comment: No mention is made of the 7 other banks that failed during this period and how previously uninsured deposits are covered.