Michigan banks reassure their customers following bank closures

LANSING, Mich. (WILX) - Michigan-based banks aim to avoid bad bets following the closure of Silicon Valley and Signature Banks. Investors were told last week that the banks needed to raise over $2 Billion in funds leading customers to start pulling out money.

CEO of Dart Bank, Bill Huffnagel, said to make sure you’re with the right financial institution.

“Part of it is to make sure that you talk to your financial institution and you get good advice, and you take the time to time to set up your account appropriately,” Huffnagel said.

More than 80% of Silicon Valley customer funds were uninsured. Financial analyst Kent Ballard said the moves made by the FDIC saved a lot of people.

“What the feds did stepping in today to backstop the money that is above FDIC coverage is going to allow the economy to function,” Ballard said. “There was a lot of talk over the weekend how are companies going to make payroll when all their money is locked up Roku the big television provider and ETSY which effects mom and pop.”

Ballard said we could see rising interest rates and fewer loans given out because of the bank closures.

“The regional banks are really really going to take a hit from this. They are going to have a hard time continuing to get large deposits from depositors, and banks have to take in those deposits to lend out,” Ballard said. “What you will see is that the credit markets are going to tighten.”

People and businesses with accounts over $250,000 are urged to speak with their financial advisors. The FDIC insurance covers -- checking accounts, negotiable withdrawal accounts, savings accounts, cashier’s checks, money orders, and other official items issued by a bank. In an announcement, the FDIC said that all insured depositors will have access to their deposits Monday. This comes to prevent fallout from 80% who were underinsured.

The FDIC’s standard insurance covers up to a quarter of a million per depositor, per bank account. More information can be found here.

Read next:

Subscribe to our News 10 newsletter and receive the latest local news and weather straight to your email every morning.

Copyright 2023 WILX. All rights reserved.