Bank failures have become pretty routine over the past two years, so much so that they hardly make news anymore. But the failure of Chicago-based ShoreBank made more headlines than usual, both because it was a fairly large regional bank, but also because the financial institution was famous for its unique pioneering of socially-responsible lending.
It's no secret that ShoreBank had been in financial trouble. Several articles had noted its shakiness before the failure, and BankFox had given ShoreBank its lowest health rating for years. More recently, it was one of the few banks that earned our worst rating in every single category.
Nevertheless, we here at BankFox also took note of the bank failure for a different reason. For the past two years, ShoreBank Direct's online High Yield Savings Account had offered some of the best rates out there, so many of our site's followers have had money parked with the bank.
Luckily, it seems as if the failure has not been a big issue so far for people with that account.
On the evening of Friday August 20th, account holders received an email saying the bank had failed, but that all deposits, even those above the FDIC limits, were being transferred to a new bank called Urban Partnership Bank. While the transition was going on, the ShoreBank online website and all available functionality would still work as usual.
A week later, all customers received an email saying that the new bank had decided to raise rates on the account, "to make your transition a little easier." No complaints from depositors about that!
Now two weeks since the bank failed, it's hard to tell from the bank website that anything has changed about ShoreBank at all, except for the notes at the bottom of the site that says the company will be rebranding as Urban Partnership Bank in the near future.
As we blogged last year, there are many reasons you should care if your bank fails, but it's comforting to know that because of the FDIC, it is mainly a non-event for most deposit clients.
oh jeesh how swell
Posted by awwwno -- Sep 14, 2010 6:15 PM
Rates and accounts may differ by geography so enter your zip code for better information.