The National Bankers Association—the nation’s leading trade association for the country’s minority depository institutions—has joined the chorus of banking and government officials assuring consumers that their money is not only safe in banks, but particularly in minority banks. This in light of the recent failures and of the Silicon Valley Bank in Santa Clara and the Signature Bank in New York City.
“Minority depository institutions are very different from both SVB and Signature Bank which had high concentrations in crypto deposits and volatile venture capital. Minority banks are not exposed to riskier asset classes and have the capital and strong liquidity to best serve consumers and small businesses. If you’re looking for a place to bring your deposits and have greater impact, bring your deposits to minority banks” said Nicole Elam, President and CEO of the National Bankers Association.
Normally, the FDIC insures a total of $250,000 in checking, savings, certificates of deposit and money market accounts at participating institutions. Given that the median amount that Americans have in banks is $5,300 per household, according to a 2019 Federal Reserve survey with the average amount being $41,000—most Americans can rest assured that their money is safe.
To arrest the fears of banking consumers—some of whom rushed to move their money from smaller, regional banks to larger national banks, the President waived the $250,000 limit so that customers affected by the two recent bank closures could get access to all of their deposits.
“The Biden-Harris Administration, FDIC, and Federal Reserve worked hard this weekend to make sure that these bank failures are the exception, not the rule, and that all Americans can continue to have confidence in our banking system. I also applaud bipartisan leaders in Congress for keeping stakeholders informed about how hard-earned deposits are being kept safe.” said Robert James, II, Chairman of the National Bankers Association and President/CEO, Carver Financial Corporation.
Consumers would however be wise to remember that while the vast majority of banks are insured; they might want to check FDIC.gov. to make sure that their banking institutions are among them.