Banking and COVID-19 - MUST Read

I'm getting straight to the point here and giving you bullet points in this blog. This is not legal advice and educational only. Please use proper judgment. Although I am no longer in banking, I still keep my Bank Auditor License valid and have over 15 years of experience in the industry and have seen a lot. I want you to be prepared for what may be coming next.


In the middle of a crisis (such as the mortgage crisis in 2008) banks implement procedures to limit 'bank runs' to help keep the economy safe. I'm sharing information that is typically not well-known so you can be proactive and not reactive. Again, please use proper judgment.



  • A 'bank run' is when a major influx of people withdrawal all of their cash from banks in concern that they won't be able to access their money during this time which severely hurts the banking industry and economy and you.


  • The FEDs (Federal Reserve) already has procedures in place for mass panic and may soon limit cash withdrawals and possibly lower debit, credit limits, and cash advance limits. (i.e. They won't lower the actual credit limit you have, but limit your daily purchase/withdrawal limit) They are just waiting to hit GO if/when needed.


  • Smaller banks are typically the first to limit withdrawals as they keep smaller limits of cash-on-hand. Banks do not hold all of the cash-on-hand that their customers have in their accounts. They legally can only hold so much for various reasons, that is why they get cash shipments from the FED every so often.


  • If you decide to take out $5k+ from your smaller bank, call and make sure they can accommodate that before you go. Even if they can accommodate that, it doesn't mean they will as they have to consider all of the customers coming to get cash. They can't give you everything they have that day and not be able to assist other customers.


  • If you have money in places like PayPal, transfer that money out. They are not FDIC insured and if something happened to them (very unlikely) you legally do not be reimbursed what you lost. In the highly unlikely event, this happened, I'm sure they would work on reimbursing everyone.


  • Leaving some money in the bank is good and helps the economy.


  • Banks are FDIC insured and if there was a bank run and your bank went under, you will be reimbursed up to $250,000.00. Some accounts are eligible for more, you can get an idea of what you are covered for here: www.fdic.com/edie.


  • If you take cash out, you need to decide how much based on your situation. There is no magic number. Consider food/toiletries that you will need, medication, gas, rent, etc. Mortgage companies, credit card companies, loan companies, etc. will be granting late payments without fees/fines. Even if all of them have yet to announce it, they will soon.


  • If/when you take cash out, wear gloves, have the teller place it in a bank envelope, and put it in a plastic bag when you get home - don't be afraid to spray it with some Lysol too. Money is DISGUSTING!! And not just because of COVID-19. Don't wash it...


  • DO NOT put cash in your safe deposit box. It's not actually illegal, but it's not FDIC insured when it's in there, SDB's are not 100% fireproof if the bank closes you can't access it and it's viewed as tax evasion and other things and bank's are required to file certain reports on you if they are aware you are doing this.


  • Scams will be more prevalent. Use common sense, call your bank and give them the deets as they've seen every scam under the sun and they can help you determine if it is or not.


Stay tuned for more as I do feel like I am missing something. Again, this is NOT legal advice and use proper judgment.



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