Consumer Alert: Netbank Accounts Moving To ING Bank

28 Sep Consumer Alert: Netbank Accounts Moving To ING Bank

The Federal Deposit Insurance Corporation (FDIC) today approved the assumption of the insured deposits of NetBank, Alpharetta, Georgia, by ING Bank, fsb, Wilmington, Delaware. NetBank, with $2.5 billion in total assets and $2.3 billion in total deposits as of June 30, was closed on September 28, 2007 by the Office of Thrift Supervision, and the FDIC was named receiver.

The failed bank was an Internet bank and did not have any physical branches. Depositors of NetBank will automatically become depositors of ING Bank. Over the weekend, customers can access their money by writing checks, or by using their debit or ATM cards. Checks drawn on the bank that did not clear before today will be honored up to the insured limit. Starting on the morning of Monday, October 1, customers will have full access to their insured deposits via the Internet and for the foreseeable future should continue to utilize NetBank’s current Website to transact banking business.

Customers with questions about how deposit insurance works or who would like more information concerning the failure can visit NetBank’s Website at www.netbank.com; the FDIC’s Web site at www.fdic.gov\bank\individual\failed\NetBank.html; or call toll-free at 1-888-256-6932. While the toll-free number will be operational 24 hours a day, seven days a week, customers are encouraged to call before midnight, Eastern Daylight Time, if possible.
The FDIC entered into a Loan Purchase Agreement with EverBank, Jacksonville, Florida, to purchase certain assets of NetBank. EverBank will purchase about $700 million of mortgages held by NetBank. The FDIC will retain the remaining $1.1 billion in assets for later disposition, including NetBank’s leasing division, NetBank Business Finance which will continue operations. Loan customers should continue to make payments as usual.

The FDIC estimates the cost of this transaction to its Deposit Insurance Fund to be approximately $110 million. NetBank is the second FDIC-insured bank to fail this year and the first in Georgia since AmTrade International Bank, Atlanta, Georgia, was closed on September 30, 2002.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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