
Bruce Feffer
Partner
212-784-6904 bfeffer@sh-law.comFirm Insights
Author: Bruce Feffer
Date: March 14, 2023
Partner
212-784-6904 bfeffer@sh-law.comAs news rolled in about the recent failure of Silicon Valley Bank and the government takeover of Signature Bank, many people were understandably nervous. One of my overseas clients texted me that he had money on deposit at one of those banks and worried that it was gone forever.
As the government and banking industry grapples with how to avoid such crises in the future, individuals and businesses need to know how to protect themselves and what options they have in the event they face a similar situation.
When a bank fails (essentially running out of money) or goes into receivership (a form of government or court-ordered takeover intended to preserve remaining assets), individual and commercial depositors should immediately consider the following options:
It’s important to be proactive in protecting your assets before a crisis occurs. Many people only learn that their bank is in trouble after it’s too late. One way to check the financial health of a bank is to obtain its “rating”. Standard & Poor’s rates banks based on their financial strength and ability to meet financial obligations. Ratings range from a high of AAA to a low of D. Moody’s Investors Service offers ratings from AAA (highest) to C (lowest). These and other services can provide detailed research data to help depositors learn more about the strength and health of a particular bank or financial institution. In addition, many banks will display their ratings on their own websites or in their publicly available annual reports.
Of course, there is no substitute for a direct conversation with a personal banker or account manager regarding not only the financial health of the bank but also what programs or products the bank might offer to protect your accounts in a worst case scenario.
If your business is experiencing a financial crisis due to a bank failure or other calamity, or you simply want to discuss strategies and options to protect your assets, consultation with legal counsel is advisable. Our team of experienced lawyers can assist you in a wide variety of areas of law. If you need assistance, give me a call or email me and I’ll be happy to help.
If you have any questions or if you would like to discuss the matter further, please contact me, Bruce Feffer, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
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