Bank Failures on the Rise:  How to Protect Your Money

By Veronica Mackey

Last week, the Daily Hodl reported that two Wells Fargo customers  say the bank allowed scammers to rip off thousands of dollars from their accounts, and then blamed them for the issue. 

Jolinda Crocker says $60,000 was stolen from her account while she was teaching at her music school in Italy, reports the Daily Mail.

After receiving a text message and verifying the transactions were not hers, Crocker says the bank began to blame her a week later.  Her account showed a login from Italy and California on the same day.  The ordeal has been going on for two years.

Crocker has now spent two years battling the bank to get her money back.

Judy Barr, another customer, was frauded into giving scammers her authorization code when they asked for it, pretending to be with Wells Fargo’s fraud department.  Like Crocker, the bank said she initiated the transactions herself and refused to reimburse her. 

Wells Fargo is one of several large US banks facing lawsuits from customers who accuse them of being lax on security, then shrugging their shoulders and refusing to go after the real criminals. 

Some U.S. banks are abruptly freezing accounts that have not had activity for a long time to safeguard their holdings and help protect against overall bank failures.

Is it time to start stockpiling your cash underneath your mattress?

According to IntegratedCashLogistics.com, there have been multiple bank branch closings in the past year.  In 2023, America saw its highest amount of bank closings since the 2008 recession. The increase in mobile banking use, inflation and interest rates, and real-estate struggles all contributed to why 2023 experienced so many banks shutting their doors. Many think the U.S. banking crisis, which escalated in 2023, is going to get worse in 2024.

Despite protections by the FDIC (Federal Deposit Insurance Corporation) to insure deposits, the fact is the more money that banks lend, the more they earn.  So, a sudden wave of customers, deciding to cash out at the same time, would literally bankrupt the system. Banks could not meet the demand for cash.  It’s also no coincidence that more businesses are going cashless. 

Which Banks Are At Risk?

Finding out which banks are at risk is not a simple process.  Many institutions keep this information close to their chest.  However, there are a few warning signs that consumers should pay attention to, such as:  

• Falling Stock Prices. Since recessions and economic downturns often directly affect stocks, a falling stock price can indicate that your bank is starting – or close to – going under.

• Inaccurate or Inaccessible Reporting. If your bank starts to make it difficult to access your account information, or if you notice inaccurate information, this can be another sign of impending collapse. 
• Limited Withdrawals.  On a recent YouTube podcast, Joseph Tittel reported that a bank customer was told he could not withdraw $5,000 in cash at one time.  Instead, he was only allowed to withdraw in $500 increments.  He was also questioned about why he wanted to withdraw his own cash.
• Declining Profits. Banks make money when they are able to invest their customers’ money at a higher interest rate than what they received it at. They also collect money from interest rates and service fees. Therefore, if they are losing profits, then this is another sign of potential failure.
• Increasing Loan Defaults. If you notice your bank having many loan defaults in a short period of time, this often points to less revenue as well.

How can you protect yourself?

Do your homework.  Pay extra attention to news about financial institutions where you do your banking.  Take note of any of the scenarios above that might indicate trouble:  falling stock prices, declining profits, etc.

Evaluate your emotional triggers to money.  Are you okay with depositing large amounts into online banks?  Or do you feel safer banking with a brick-and-mortar institution? Online banks tend to offer higher interest on savings vs. banks with physical locations.

Have cash available at all times, just in case the ATMs become inaccessible.

Expand your financial portfolio.  Look into other financial assets like gold, silver and Bitcoin.