posted October 6, 2008
) Frank Hughes |
“In this time of economic uncertainty, with major financial stalwarts collapsing nationwide, it’s only natural that there would be a certain ‘fear factor’ among people concerning the safety and security of their individual funds,” said Mr. Hughes. “But Chattanoogans can rest assured that the bank is the safest place to have your funds right now and that community banks, by and large, are really O.K.”
With the passing of the new bailout plan, consumers and businesses can now get up to $250,000 in FDIC insurance on their bank deposits. Mr. Hughes said that these funds carry with them the safest, most secure form of governmental insurance protection. In fact, FDIC insurance was created in the wake of the Great Depression for that very reason, so that a total financial market collapse would never happen again.
“The FDIC’s basically a safety net that ensures individuals that their deposits are backed by the United States government and are guaranteed for coverage,” Mr. Hughes said. “That’s why having your money in the bank is a lot safer than carrying it around or stashing it away, where there’s greater risk for theft, damage or loss.”
This FDIC coverage applies even to those institutions which have failed or may fail in the future. And Mr. Hughes emphasized that most local financial institutions here in Chattanooga are solvent and even growing.
“I can tell you with a great degree of confidence that majority of local banks are solvent and doing just fine,” he said. “At Cornerstone, we’ve continued to grow and profit, despite the national financial crisis.”
Mr. Hughes also said that keeping money in circulation by having it in the banks is vital to the whole system that provides loans for companies and individuals, to stimulate further economic growth.
“Absolutely we’re still doing loans,” he replied in response to concern about the much-hyped credit crunch and the reluctance of some banks to issue new loans. “We’re just sticking to basic, fundamental principles and guidelines that should have been followed by all financial institutions. Had everyone been playing by the rules, this whole financial debacle and need for a massive bail-out could have been avoided.”
“What we’re all experiencing now in the financial markets is just a correction for a period of wrong practices,” he said. “Yes, it will take time. And yes, there may be other banks that fall along the way. But Chattanooogans can take heart that their FDIC insured funds are safe and secure in our local banks.”
If individuals are concerned about whether or not their deposits are FDIC insured, Mr. Hughes advises them to contact their local financial institution or visit the official FDIC website for further information: www.fdic.gov.
Cornerstone Community Bank is one of Chattanooga’s only locally owned and operated banks. It has been a member of the FDIC and serving the Chattanooga community since 1995.
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