The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a business checking account, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled information which should answer many of your questions.
Read This:
I. Introduction
On September 28, 2007, NetBank, Alpharetta, Georgia was closed by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
The NetBank web site will be closed from 3:00 pm to 5:00 pm EST, on September 28th and will reopen in a read only mode. Normal online services will be restored in the early evening Sunday, September 30th.
The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should help answer many of your questions.
IMPORTANT NOTICE: ING DIRECT and the FDIC as Receiver for NetBank will not ask you for personal identifiable information (PII). PII includes such items as name, address, social security number, driver license number, etc. All appropriate PII has transferred to the FDIC and/or the ING DIRECT . You should assume that any e-mail requests to provide PII are fraudulent. At a later time, the FDIC and/or the ING DIRECT may ask you to verify PII contained in the former banks records, but they will not ask you to provide additional PII in an unsolicited e-mail.
Depositors speaking to the FDIC will be asked to verify the last four numbers of their social security number only. If a depositor is out of the country, they will also be asked to verify their address and account number.
II. Press Release
The FDIC has issued a press release (PR-81-2007) about the institution’s closure. If you represent a media outlet and would like information about the closure, please contact David Barr at 202-898-6992.
III. Acquiring Financial Institution and Your Insured Deposits
All insured deposit accounts have been transferred to ING DIRECT (”assuming institution”) and will be available immediately. The NetBank web site will be closed from 3:00 pm to 5:00 pm EST, on September 28th and will reopen in a read only mode. Normal online services will be restored in the early evening Sunday, September 30th. ING DIRECT is the operating name for ING Bank, fsb.
Principal and interest on insured accounts, through September 28, 2007, are fully insured by the FDIC, up to the insurance limit of $100,000. You will receive full payment for your insured account. Certain entitlements and different types of accounts may be insured for more than the $100,000 limit. IRA funds are insured separately from other types of accounts, up to a $250,000 limit.
If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of NetBank. This means that you may eventually recover some of your uninsured funds.
All accounts that exceed the $100,000 insurance limit, and/or all accounts that appear to be related and exceed this limit, are reviewed by the FDIC to determine their ownership and insurance coverage. If it appears that you have potentially uninsured funds, an FDIC Claims Agent will contact you, by either telephone or mail, regarding your account(s). Or, you may call 1-(888) 256-6932 and arrange a personal telephone interview with a Claims Agent. The Claims Agent may direct you to download and submit a particular form that will assist in expediting the processing of your claim.
List of Affidavits, Declarations, and Forms available for download
Your transferred deposits will be separately insured from any accounts you may already have at ING DIRECT for six months after the failure of NetBank. Checks that were drawn on NetBank that did not clear before the institution closed will be honored up to the insurance limit. You may speak to an FDIC representative regarding deposit insurance by calling: 1-(888) 256-6932.
You may withdraw your funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with ING DIRECT by either making a deposit to or a withdrawal from your account, provided the deposits are not pledged as collateral for loans.
For all questions regarding new loans and the lending policies of ING DIRECT, please visit their web site:
ING DIRECT
For additional information on deposit insurance visit EDIE the FDIC’s Electronic Deposit Insurance Estimator.
EDIE - FDIC’s Electronic Deposit Insurance Estimator
Back to top
IV. Banking Services
You may continue to use the services to which you previously had access, such as automatic teller machines.
Your checks will be processed as usual. All outstanding checks will be paid against your available insured balance(s) as if no change had occurred. ING DIRECT will contact you soon regarding any changes in the terms of your account. If you have a problem with a merchant refusing to accept your check, please contact ING DIRECT at 1-866-327-4599. An account representative will clear up any confusion about the validity of your checks.
After September 28, 2007, your account will earn interest at a rate determined by ING DIRECT. You will be notified by letter regarding this matter.
Your automatic direct deposit(s) should be transferred automatically to ING DIRECT. The BillPay feature on your account is temporarily disabled. This feature is expected to resume later this weekend when on-line banking services resume. You should contact ING DIRECT, however, to discuss your account(s) and to insure that service is not delayed or discontinued.
All your deposit account histories and records will be transferred to your assuming institution. If ING DIRECT requires any additional signatures or forms, it will notify you. If you have any questions or special requests, you may contact a representative of ING DIRECT at 1-866-327-4599.
V. Loan Customers
If you had a loan with NetBank, you should continue to make your payments as usual. The terms of your loan will not change under the terms of the loan contract because they are contractually agreed to in your promissory note with the failed institution. Checks should be made to your former bank and sent to the same address until further notice.
VI. Possible Claims Against the Failed Institution
Claims against failed financial institutions occur when bills sent to the institution remain unpaid at the time of failure. Shortly after the failure, the FDIC sends notices directly to all known service providers to explain the claim filing process.
Please note: there are time limits for filing a claim, as specified in the notice.
If you provided a service for NetBank and have not received a notice, please contact:
Federal Deposit Insurance Corporation
Receiver: NetBank
Attention: Claims Department, DRR
1910 Pacific Avenue
Dallas, Texas 75201
Or:
Call toll free 1-800-568-9161
VII. Priority of Claims
In accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority:
1. Depositors
2. General Unsecured Creditors
3. Subordinated Debt
4. Stockholders
VIII. Dividend Information
Due to the projected sale of assets of the former bank, the FDIC is in the position to provide each uninsured depositor with an dividend equal to 50% of your uninsured amount. These funds will be deposited directly into your account net of your uninsured portion.
Dividend Information on Failed Financial Institutions contains general information about the dividend process.
IX. Brokered Deposits
The FDIC offers a reference guide to deposit brokers acting as agents for their investor clientele. This site outlines the FDIC’s policies and procedures that must be followed by deposit brokers when filing for pass-through insurance coverage on custodial accounts deposited in a failed FDIC Insured Institution.
NetBank, sometimes called NetB@nk, was a financial company engaged primarily in retail banking, mortgage banking, business finance and providing ATM and merchant processing services. NetBank was founded in February 1996 and completed its initial public offering of stock in July 1997. It was one of the pioneers of the Internet banking industry, and recognized as one of the first internet-only banks.
Netbank was closed on September 28, 2007 by the Office of Thrift Supervision in conjunction with the Federal Deposit Insurance Corporation (FDIC). Several shareholders have filed class action lawsuits against Netbank claiming misrepresentation of the company value during the restructuring period. They claim that the stated book value of the company was nowhere near complete and that there were a number of issues that NetBank did not disclose to the investors as required by SEC guidelines.
etBank was founded in 1996 as one of the nation’s first Internet-only banks. Using a new business model, NetBank paid higher interest rates for computer-savvy customers in exchange for not having physical bank branches. This model made sense and the bank early on paid very nice interest rates.
NetBank, like all banks, made its money from a mortgage and lending operation. The majority of home loans were offered through traditional channels and a small percentage of loans were offered through the same internet channels as the banking offerings.
NetBank obtained customers by offering some sort of “sign on” bonus. A $50 bonus was a common bonus. NetBank signed many agreements with other companies to promote itself and the companies would offer gift certificate or credit to their loyalty programs (i.e., frequent flyer programs) equivalent to around $50.
