Reliance Bank - White Plains, NY Bank Gagal - Episode 337

**Freesia Brindski** (0:01)
Good morning, good morning. Thank you so much for joining me. This is the podcast, The Endurance of Labor Laws. I am your lovely host, Freesia Brindisi. Today is episode 337, and we're going to take a look at another failed bank. But before we dive in, let me give a big shout out to my listeners because as usual, you guys are awesome. I love to see you here. So a big shout out to Mississippi, Florida, Arkansas, Texas, and Oklahoma. In terms of countries, the United States and the United Kingdom. Great to see all of you. Okay, so today we're going to take a look at Reliance Bank. This one was located out of White Plains, New York. The bank that acquired them was Union State Bank. And this bank, the Reliance Bank, failed March 19th in 2004 So it was fairly towards the beginning of that year back in 2004 In terms of the history behind this a little bit, it says on March 19th, 2004, Reliance Bank of White Plains, New York was closed by the New York Superintendent of Banks and the Federal Deposit Insurance Corporation, FDIC, was named Receiver. As Receiver, the FDIC is charged with winding up the business affairs of the failed financial institution. This includes the disposition of assets and liabilities of the failed financial institution and payment of dividends to approve creditors in order of priority. The FDIC as Receiver has taken all necessary actions to include the affairs of the failed financial institution, made all dividends distributions as required by law, and the receivership estate is deemed terminated. So again, if something is not required by law, you're not going to get paid. In terms of the press release, it says the FDIC has issued a press release about the institution's closure. If you represent a media outlet and would like information about the closure, please contact Frank Russock, and that's G-R-E-S-O-C-K at 202-898-6993.
Now in terms of the press release, I was able to get a copy of that. Again, whenever they have a press release like this, it is released directly from the FDIC because the FDIC has taken over this bank because it failed. So this one was dated for March 19th, 2004 Again, the media contact is Frank Russock, but the phone number is slightly different. 202-898-6634. It says, FDIC approves assumption of all the deposits of Reliance Bank of White Plains, New York. The Board of Directors of the Federal Deposit Insurance Corporation, also known as FDIC, has approved the assumption of all the deposits of Reliance Bank of White Plains, New York, by Union State Bank of Orangeburg, New York. Reliance Bank, with approximately $30.3 million in assets as of January 31, 2004, was closed today, that's back in March of that year, by the New York Superintendent of Banks and the FDIC was named receiver. Reliance Bank's only banking office will reopen as a branch of Union State Bank. The drive-through window will reopen on that day from 3 p.m. to 5 p.m. Full service operations will resume on Monday. Depositors of the failed bank will automatically become depositors of Union State Bank. The failed bank had total assets or sorry, total deposits of $20 million in about 1,100 accounts as of January 31st, 2004 Union State Bank will pay the FDIC a premium of $2.6 million for the right to assume those deposits and to purchase $17.5 million of the failed bank's assets. The FDIC will retain the remaining $12.8 million in assets for later disposition. Customers with questions about today's transaction that's back again in 2004 can contact the FDIC toll free at 1-888-206-4662.
The toll free number will be operational Monday through Friday from 8.30am to 5.30pm EST. The FDIC estimates the cost of this transaction to the bank insurance fund, also known as BIF, to be $300,000.
Reliance Bank is the 3rd FDIC insured bank to fail this year. That's back in the year of 2004 and the 1st in New York since Golden City Commercial Bank New York failed on December 10, 1999 So basically they don't have that many but it's still pretty bad. In terms of the acquiring financial institution, it says all deposit accounts were transferred to Union State Bank of Orangeburg, New York and were available as usual during regular business hours at the former Reliance Bank branch. You may view more information about Union State Bank by visiting their website and they don't really give it. They just say visit the website. In terms of priority of claims, it's pretty much the usual. It says in accordance with federal law, allowed claims will be paid after administrative expenses in the following order of priority. Again, if you're not considered a allowable claim, then you're not going to get paid. And also, who knows how much administrative expenses cost. And also, if you're not considered a priority, you're probably not going to get paid. So number one is depositors. Number two, general unsecured creditors. Number three, subordinated debt. Number four, stockholders.