ANB Customers May Need to Wait for Funds

Many people who had brokered CD deposits with the failed ANB Financial NA will be waiting several weeks for their insured funds.

ANB Financial's main source of funding was $1.6 billion in brokered CD deposits, which it gathered by paying some of the highest rates in the country.

A relative of mine who had a CD deposit with ANB Financial through his brokerage account with Charles Schwab(SCHW Quote) was informed this week that it would take three to four weeks for his money to be received from the Federal Deposit Insurance Corporation.

Just to see if this was an unusually long timeframe, I called David Barr, the FDIC's Assistant Director for Public Affairs. Mr. Barr told me that 180 different brokers had deposits with ANB Financial. After the institution was closed down late on Friday, May 9, the FDIC mailed packages to all the brokers on Monday, May 12, instructing them to complete paperwork listing their customers and their deposit amounts.

Since brokered CDs are registered with a bank or S&L only in the name of the broker, the FDIC needs the brokers to provide detailed customer account information when an institution fails. The FDIC then cross-checks the information with other broker lists and the bank's retail deposits to make sure that a customer's total deposits with the failed institution don't exceed insurance limits.

As of the close of business on Wednesday May 21, the FDIC had paid out $425 million to brokers, leaving roughly $1.2 billion to be paid out.