It hasn’t got a lot of headlines, but the US has now officially suffered its
failure since 1993. NetBank had $2.5 billion in assets, and somehow contrived
to lose more than $200 million in 2006. Deposits were insured up to the FDIC
ceiling of $100,000, and ING Direct is buying $1.5 billion in deposits for $14
million, which works out at about
$1,000 $135 per new customer.
Of course, there’s always going to be someone with more than $100,000 in deposits.
this case it’s hard to feel a huge amount of sympathy:
Applied Cognetics, a software development and online marketing firm based
in Brooklyn, N.Y., has about $1 million in deposits in NetBank…
NetBank customers with accounts exceeding the FDIC limit will become creditors
in NetBank’s receivership, the FDIC said Friday…
Applied Cognetics bills itself as a one-stop shop for online lead generation
and Internet development.
Colthrust and his team – who formed the company after a subprime mortgage
lender where they worked was sold – have built the 10-employee company’s sales
to more than $10 million since it was founded in 2000. Ironically, given that
lenders’ catering to subprime borrowers have led to a spike in home loan defaults,
subprime lead generation software is among the services Applied Cognetics
So Colthrust started a subprime lender, sold it, and then used the proceeds
to start a company finding leads for other subprime lenders. He also put all
his money in NetBank, which promptly went belly-up in the subprime meltdown.
There’s some kind of poetic justice there, I think.