What It’s Like to
Close a Bank

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in ,

In Short: Exhausting.

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In the mid-80s the banking crisis hit Oklahoma. The bank I worked at in Tulsa was the first to fail.

Word got out and a run started. I was sent (with our security guard) to pick up cash from another bank to meet demand. That’s how I ended up with $1,000,000 in the trunk of my ’69 Nova.

A piggy bank in the midst of being shattered.
Photo: Dovis @Pexels.

A few months later I started working for the quasi-government agency tasked with overseeing national banks — the Federal Deposit Insurance Corporation. It had its hands full for the next few years.

Most of my time was spent incorporating failed bank assets into the FDIC systems. Once or twice a month we went to a failing bank to close it. By the time we got to that point, the “assuming bank” was already lined up to purchase it. We would go in and do what auditors normally would take weeks or months to do, only we did it in three days.

In one two-week period with back-to-back closings, I accumulated over 80 hours of overtime. Another time I got a call at home late afternoon on a Thursday asking me to fly to Dallas that night to help with a large closing there.

Closings were scheduled to start on Thursday afternoons when the bank closed for the day. The first person into the bank was the closing manager, whose job was to let the bank manager know what was about to happen. The second was the locksmith, who immediately changed the locks on all outer doors.

After the bank and closing managers announced to employees what was going on, the rest of us started unloading the truck full of copiers, boxes of paper, and “portable” computers — which in those days were the size of a suitcase.

Several things happened at once. One priority was to count all cash. Tellers were required to stay at their windows until an FDIC employee had counted and balanced their till. Another went to count the cash in the vault. Obviously the employees were worried about what was happening. Having been through it myself, I was able to empathize.

Other FDIC employees took over loan department files to start grading the loans. “Safe” loans were documented to hand over to the assuming bank. Any “iffy” loans would be taken over by the FDIC and processed into its system. In a few small town banks we found that some loan officers had blank IOU pads in their desks. If the customer didn’t qualify for a bank loan, the officers would loan the money themselves.

One or two FDIC employees would start locating the bank’s assets. At one bank some were found in the bank president’s garage.

Many times it was a small town’s only bank. We couldn’t just reserve rooms for 25–50 FDIC employees in the local hotel. Word could leak out and cause a run on the bank before we ever got there. So hotel reservations were always made with an alias; many times we were with the “Southwest Builders Association”. I happened to return to the hotel on one closing to hear the operations officer explaining that she needed to change the charges on the rooms over to the FDIC account. The poor clerk looked like he thought he was on Candid Camera.

After several 12- to 16-hour days, we would wrap up and be out of the bank by the end of the weekend. Monday morning the bank would reopen at its usual time, with the same employees, but under a new name.

The author has worked for other federal and local governments since. He is now retired and hoping to be able to travel internationally again soon.

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