Comments on: National and International Headlines for November 26 http://www.mediamouse.org/news/2008/11/national-and-international-hea-209.php Grand Rapids Progressive Left News Blog Sun, 06 Dec 2009 15:38:14 +0000 hourly 1 By: Kate Wheeler http://www.mediamouse.org/news/2008/11/national-and-international-hea-209.php#comment-360 Kate Wheeler Thu, 27 Nov 2008 01:12:12 +0000 http://www.mediamouse.org/news/2008/11/national_and_international_hea_209/#comment-360 Re: the FDIC "troubled bank list." The media has been reporting on how this list continues to grow, but has rarely if ever publicized the fact that the public has no access whatsoever to the list. You cannot go to the FDIC site and find the list of banks that the FDIC believes are about to fail. Instead, the FDIC gives you a list of independent bank rating services and instructs you to contact one of them for information. However, several banks that the FDIC closed this fall were given solid ratings by these services, so they are not offering the most reliable or updated information--that's the knowledge that the FDIC won't share. We need to demand more transparency, not only in the travesty of the bailout process, but in the ongoing operation of the FDIC and the knowledge that it has about the security of our money. Meanwhile, how can you check out your own bank's safety? You can ask for your bank's asset-to-loan ratio. This is a snapshot reading that allows you to know how much money your bank has out in loans (money that may be at risk) compared to money it has on hand. It used to be that a 10 to 1 asset-to-loan ratio was considered solid; in these days of deregulation, it is probably nearly impossible to find a bank that still operates with this much care toward its customers as opposed to its self-interest in profit. 15 to 1 is considered acceptable today. Some banks are operating at 30 to 1 or even more, which is dangerous. If you have money in a bank, it MUST give you its asset-to-loan ratio if you ask for it. But routinely, this is a number that bankers refuse to give out. Often, even being asked for it makes them nervous. If you ask and are refused, demand to see a copy of the bank's most recent annual report; the asset-to-loan ratio is a required line item in the report. Then act accordingly. If you're moving money from one bank to another, check this figure in annual reports before you choose a new bank. Re: the FDIC “troubled bank list.” The media has been reporting on how this list continues to grow, but has rarely if ever publicized the fact that the public has no access whatsoever to the list. You cannot go to the FDIC site and find the list of banks that the FDIC believes are about to fail. Instead, the FDIC gives you a list of independent bank rating services and instructs you to contact one of them for information. However, several banks that the FDIC closed this fall were given solid ratings by these services, so they are not offering the most reliable or updated information–that’s the knowledge that the FDIC won’t share.

We need to demand more transparency, not only in the travesty of the bailout process, but in the ongoing operation of the FDIC and the knowledge that it has about the security of our money.

Meanwhile, how can you check out your own bank’s safety? You can ask for your bank’s asset-to-loan ratio. This is a snapshot reading that allows you to know how much money your bank has out in loans (money that may be at risk) compared to money it has on hand. It used to be that a 10 to 1 asset-to-loan ratio was considered solid; in these days of deregulation, it is probably nearly impossible to find a bank that still operates with this much care toward its customers as opposed to its self-interest in profit. 15 to 1 is considered acceptable today. Some banks are operating at 30 to 1 or even more, which is dangerous.

If you have money in a bank, it MUST give you its asset-to-loan ratio if you ask for it. But routinely, this is a number that bankers refuse to give out. Often, even being asked for it makes them nervous. If you ask and are refused, demand to see a copy of the bank’s most recent annual report; the asset-to-loan ratio is a required line item in the report. Then act accordingly. If you’re moving money from one bank to another, check this figure in annual reports before you choose a new bank.

]]>