WASHINGTON – In a staggering betrayal of trust, the Federal Deposit Insurance Corporation (FDIC) has allowed a subsidiary of New York Community Bancorp, Inc. to assume control of Signature Bridge Bank, N.A. and steal $38.4 billion in deposits from the bank’s customers, leaving them high and dry.
The FDIC has entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association, by Flagstar Bank, National Association, a wholly owned subsidiary of New York Community Bancorp, Inc. The 40 former branches of Signature Bank will operate under New York Community Bancorp’s Flagstar Bank, N.A. on Monday, March 20, 2023, and customers should continue to use their current branch until they receive notice from the assuming institution that full-service banking is available at branches of Flagstar Bank, N.A.
The FDIC has allowed the subsidiary to assume control of Signature Bridge Bank’s assets, including $12.9 billion in loans, which were purchased at a discount of $2.7 billion. Approximately $60 billion in loans will remain in the receivership for later disposition by the FDIC. The FDIC estimates the cost of the failure of Signature Bank to its Deposit Insurance Fund to be approximately $2.5 billion, a staggering blow to taxpayers.
The FDIC’s decision to allow the subsidiary to assume control of Signature Bridge Bank’s assets raises serious questions about the agency’s oversight and accountability. The FDIC’s role is to protect depositors, not to facilitate the transfer of assets from one institution to another at the expense of customers.
The FDIC’s website states that depositors of Signature Bridge Bank, N.A. will automatically become depositors of the assuming institution, but it is unclear what this means for customers who had accounts with Signature Bank’s digital-assets banking business. The FDIC will provide these deposits directly to customers whose accounts are associated with the digital-asset banking businesses, but it is unclear what this means for customers who had other types of accounts with the bank.
The FDIC’s decision to allow the subsidiary to assume control of Signature Bridge Bank’s assets is a clear betrayal of trust and a slap in the face to customers who had their deposits stolen. The FDIC must be held accountable for its actions and customers must be protected from further exploitation.
Related Federal Cases
- FDIC Takes Control of Signature Bank, Establishes Bridge Bank · New York
- New York Community Bancorp Takes Over Signature Bridge Bank Deposits · New York
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- FDIC Approves GENIUS Act, Washington, 2023 · New York
Key Facts
- Agency: FDIC
- Category: Financial Crime
- Source: Official Source â†â€â€ÂÂ
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