What Your Bank's Website Won't Tell You

I was usually a satisfied customer although sometimes I fussed while I waited for a Netbank customer service rep.

Especially because I live outside the U.S., the wait was unimportant compared with the convenience of an Internet bank account. I had signed on quickly when another American told me how Netbank had simplified her life. Netbank simplified my life too until it declared bankruptcy September 30.

When I heard the news, to keep myself from feeling the full shock of losing the uninsured part of my savings, I went to the web to see what I could know more about the bank its efficient, attractive website that had, up to that point, enabled me to "communicate with your (meaning my) money," as Netbank put it.

When I started surfing, I already knew from reading the notice of the Federal Deposit Insurance Corporation at www.netbank.com, that the FDIC had no duty to let depositors know what happened until disaster struck.

I soon found out much more.

At the New York Times website, I read that Netbank had been a troubled bank for at least a year. It had tried and failed to sell a major chunk of its assets to another bank earlier in the summer. Clearly, the bank's billions in assets were not the whole Netbank story. Its liabilities were even greater, partly because of an addiction to sub-prime lending.

he smiling face that kept inviting me to partake of Netbank's benefits couldn't have been more misleading. Incidentally, the failure of the $2.1 billion bank didn't make the front page news of The Times.

Wikipedia proved to be a gold mine (I can hardly use the phrase without wincing in the present circumstances). Reading the Netbank entry, I learned detail after detail about the bank's troubles during the past two years. The clincher was that last year the firm then auditing Netbank had quit.

As I was investigating, I discovered that Netbank's stock was traded on the NASDAQ exchange. I typed the bank's symbol into Yahoo finance, then by looking at the graph saw stock's declining value during the past two years. That was the place to look. Even if I had googled Netbank, I wouldn't have seen much to alert me, at least on the early pages.

"Everyone" knows that FDIC insurance has a limit so a reader may wonder why I or anyone would deposit more than the insured limit in a single bank. I did know about the limit and did try to open a new account. Unfortunately, because I live overseas in the Age of the Patriot Act, I encountered hurdles, the main one being that Internet sites wouldn't accept a passport number and I no longer had a valid driver's license or state ID. That the IRS doesn't require a photo ID when I pay my income tax return is a detail.

Is there any silver lining to these clouds? Where can a person look to see the chances that a savings institution may fold? As a start, there's www.bankrate.com, where with a little patience, the curious or worried saver can look at the partial list of financial institutions. Pay attention to the number of stars, five stars are great and one is lousy, but remember, even Bankrate says the past is no predictor of the future.