Banking Safety and Soundness Tools

The financial crisis that has roiled Wall Street and dominated the news is sure to prompt questions from reporters and customers about the safety of your bank. It can be a challenge for bankers to find the right words with which to reassure customers about their bank and the financial system as a whole. Not communicating at all is worse.

The South Dakota Bankers Association has pulled together some resources for you to use when communicating with your customers and the public. (Updated 10/3/08)

Key Message for Employees and Customers
The vast majority of banks in this country are safe and sound. 

• Banks like ours are required to have significant capital and reserves – that is, rainy-day funds for tough economic times. This is a bank's first line of defense to cover any losses.
• FDIC insurance provides an additional backstop. The FDIC protects depositors against the loss of their insured deposits if an FDIC-insured bank or savings association fails.

• The FDIC has temporarily raised its coverage amount from $100,000 to $250,000 per depositor per insured institution through Dec. 31, 2009. (FDIC-insured accounts include savings and checking accounts, CDs, and money-market deposit accounts.)

• No customer has ever lost a penny in insured deposits when a bank has failed.

Most banks have been in existence for decades and are likely to be in existence for many more.

• The banking industry is diversified, with more than 8,500 banks serving customers every day at 97,000 locations nationwide. 
• The chances of a bank being taken over by the FDIC are extremely remote. And if that did happen, you would continue to have virtually uninterrupted access to your insured deposits.
• Our bank remains ready, willing and able to meet the needs of our community and serve our customers.

SDBA Safety and Soundness Print Advertisement
To help you communicate with customers during the current economic crisis, the SDBA will run a print advertisement in the 11 South Dakota daily newspapers on Friday, October 17. We know that some of you have already ran advertisements in your local newspapers. If you haven’t already done so, we encourage you to run the advertisement in your local newspaper at your expense. In markets that are competitive, we encourage all banks to work together in a cooperative ad that shows industry unity. The ad is available in both color and black and white. You can either run the ad with the SDBA’s logo at the bottom or a version is available for you to substitute your bank’s information at the bottom. Download the ad.

ABA Safety & Soundness Communications Kit
The ABA provides a Safety and Soundness Communications Kit which includes talking points, statement stuffers, ads and other resources.

Statement Stuffers: The ABA offers the Bank Safety & You Statement Stuffer to remind your customers about FDIC insurance. This brochure backs up the message of safety with facts, and can help to reassure customers during turbulent economic periods. The ABA also offers the How Your Deposits Are Insured Statement Stuffer, which explains how the FDIC insures your deposits and how to maximize your coverage. Both have been updated to reflect the $250,000 coverage level. Request sample or order the statement stuffers.

FDIC Deposit Insurance Resources for Bankers
On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009.

CDARS: Deposit Placement Service
Promontory Interfinancial Network has announced a program to help bankers and their customers in the wake of Kansas Bankers Surety’s decision to exit the bank deposit guaranty bond business. Using CDARS®, Promontory’s flagship service, banks can provide customers with access to up to $50 million in FDIC insurance. This should be helpful to SDBA members who want to approach KBS customers and other safety-conscious investors. (Remember, with average holdings per customer of $840,000, CDARS helps banks to attract deposits in large chunks.)

If your bank joins the Promontory Network between now and November 7, 2008, it will receive a 40 percent  discount off of the implementation fee. Furthermore, through the end of 2008, Promontory will waive bank transaction fees for deposits currently covered by a KBS policy. This includes CDARS placements for up to a year in maturity.

Learn more about CDARS by attending a FREE webinar on October 21, 2008, at 1:00 p.m. CST or October 31, 2008, 11:00 a.m. CST. Visit http://promnetwork.webex.com, type Intelligent in the search field and click Search. Click Register by the session you would like to attend. If you have questions about the webinar or the CDARS program, contact Promontory’s Steve Kinner at (866) 776-6426 x3445 or skinner@promnetwork.com.