If Thrift Fails, Checking Account Users Face Risks

I am troubled by the continuing appearance of articles referring to the safety of accounts covered by federal deposit insurance (Personal Finance, May 13).

Although it is true that depositors’ accounts are essentially safe up to $100,000, you do your readers a great disservice by failing to mention the substantial risk involved for checking account customers.

Upon the closing of a failed thrift all checks that have yet to clear the bank are returned unpaid. The Resolution Trust Corp. issues a non-binding letter of explanation to checking account customers and suggests presenting it to creditors. At the very least, this presents a depositor with a major inconvenience and potentially a significant cost in closed account service charges.

Furthermore, depositors with no other source of liquidity can find themselves in a real bind for cash during the few days’ time that it takes to receive reimbursement from the RTC for the insured accounts.

All articles regarding safety of insured accounts should warn depositors of these risks and recommend the maintenance of checking accounts in at least two financial institutions.

BRUCE WAGNER, Lake Arrowhead