According to federal regulators, FDIC officials often negotiate the takeover of bank portfolios by healthier institutions during a shutdown. Depositors experience business as usual, with checking and savings accounts absorbed into the acquiring bank's existing operations over time. Credit card borrowers, however, often experience challenges with their accounts.
Some acquiring banks take on credit card accounts, but restrict cardholders from making new charges. Chase endured scrutiny for this practice after regulators brokered its sudden takeover of the failed Washington Mutual trust in 2008. Therefore, personal finance experts advise consumers to maintain active charge accounts with at least two banks. This way, if a bank failure shuts down one credit line, accountholders can still enjoy access to a backup funding source.
About the Author
Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.