Legal Question in Banking Law in Illinois

Deposit of a large check

My wife and I recently sold some property and received a check of nearly $1 Million. We are planning on depositing itinto our savings account and then once the check clears

(about 9 days) withdrawing much of the money to spread it around to several banks. My question is this: If a bank employee somehow stole the funds or if someone else represented themselves as us and stole the money would we be able to recover the full amount or would we only be able to recover the FDIC insured amount(in this case $200,000 since it is a joint account)? Is there a better way to distribute these funds?


Asked on 10/05/06, 10:47 am

1 Answer from Attorneys
David K. Staub Staub Anderson LLC

Re: Deposit of a large check

The bank is liable for the full amount. The FDIC limits are only meaningful if the bank fails. At that point, if the FDIC steps in to bail out the bank, the FDIC will not be on the hook for more than the FDIC limits.

As an aside, troubled banks are often taken over by another financial institution which assumes all the deposit liabilities of the troubled bank, so even then the FDIC limits do not come into play.

David K. Staub, an Illinois business and banking attorney

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Answered on 10/05/06, 11:02 am


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