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CD Rates Remain Unchanged at US Bank

U.S. Bank, the new owner of San Diego National Bank, has vowed to preserve the CD rates that customers of San Diego National Bank locked in with. This move is likely to be very popular with San Diego National Bank customers and greatly increases the likiehood of maintaining business with US Bank. On Friday US Bank took over San Diego National Bank as well as 8 other banks that were part of the FBOP family of banks. This was the outcome of federal regulators stepping in to prevent the banks failure. Those who were looking for the best cd rate and found San Diego National will not be left out in the cold thanks to US Bank.

Troubled banks usually get in trouble by offering interest rates that they can’t really afford, then when they’re aquired by other banks the standard procedure is to reduce interest rates on accounts, but US Bank has decided not to do that in this case. There’s no word on what US Bank plans to do with savings account rates however.

When Temecula Valley Bank was sold to First Citizens Bank & Trust Co., First Citizens immediately reduced interest rates on CDs. FBOP got in trouble with a series of bad loans and bad investments.

Apparently 80% of the loans given out by San Diego National are back by commercial real estate. In addition US Bank is receiving $500 million from the FDIC for taking over San Diego National. The FDIC will also take on 80% of losses on the first $3.5 billion in loan loases from FBOP and 95% of loan losses over $3.5 billion. Losses are estimated to be $4 billion from bad loans.

San Diego National Bank had 28 branches and $3 billion in deposits. US Bank currently holds $5 billion in deposits. This aquisition should work out for the best for both US Bank and old San Diego National customers. A true win-win situation.

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