Originally Posted by
Matt-KC
I do also wonder about the mechanics behind all this. Since they were shut down by Thrift, I wonder how ING ended up getting the deposit accounts (for a $10 Million charge) rather than forcing FDIC insurance to kick in. The article mentions assets and deposits, but it doesn't mention liabilities which I would think would be an important number to the scenario.
The FDIC has several tools available to settle depositors accounts. One would be to simply write everyone a check. Another is to hold a very quiet auction and turn the accounts over to the the winning bidder. In this case it appears that ING bid $14 million for the deposits and related customer info. ING was willing to pay for deposits which are, as EchoVictor pointed out, liabilities in order to gain the customers. (At least as many as will stay around.)
One of the advantages here is that the FDIC avoids most of the administrative hassles of paying out the accounts, not to mention that it reduced its potential loss by $14 mil.