As a satisfied seven-year customer of Netbank, I was surprised to hear the FDIC Shuts Down NetBank Due to Defaults. For an Internet-only bank, they’ve been quite solid while paying above-average interest rates. They also offered free online bill paying while local banks were still trying to make a quick buck on it. Unfortunately, it seems they got sucked into the housing bubble and wrote too many bad mortgages.
It is a bit disconcerting to read about it online instead of getting an email from Netbank itself. They do seem to have a decent transition plan; logging into my account brought up a message that by Sunday night transactions would resume under ING’s ownership. That’s a quick turnaround over the weekend and convenient since I would’ve moved my money to ING anyway. Speaking of which, you don’t think of that $100,000 FDIC insurance much these days, but it certainly saved a bunch of people’s money yesterday.
From a technical point of view, I was curious how they could manage to move such a large financial system in two days and on a weekend no less. The simple solution, though, is likely a non-technical one: it’s all the same hardware, software, and people, just operating under different owners.
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