East Bay Retirement Community Worries After Feds Shut Bank

WALNUT CREEK (KCBS) -- Federal regulators abruptly shut down Home Savings of America, a financial institution established during the depths of the Great Depression, on Friday, including a branch in Walnut Creek.

Elderly Rossmoor residents scrambled to talk to bankers at the branch on 1938 Rice Valley Blvd. by 1 p.m. on Saturday, but couldn't access their money.

Gerry Billings is a senior ombudsman specialist with the Federal Deposit Insurance Corporation (FDIC) said as a rule, banks must have enough capitol on hand to cover depositor funds.

"In this case the bank was unable to maintain that minimum level," he said.

KCBS' Mark Seelig Reports:

In the meantime, branch members will have to wait a few days to gain access to their cash, but that's only if it was placed into an insured account.

"We have had some customers who came in who were concerned, but we can assure them that their money is safe; it was going to be returned to them on a timely basis. No one with insured funds is going to lose money on this transaction," he added.

Billings wouldn't comment on how many accounts were uninsured and therefore unprotected.

FDIC employees were on hand at Home Savings simply to help and answer questions.

Billings said that it's possible the Walnut Creek branch could be open until Tuesday, perhaps even Wednesday.

One retirement community member affected, said that she, like many of her neighbors, had been banking with Home Savings for years and that she enjoyed the friendly service.

However, she was disconcerted to find the branch shut down so fast and was told they'd send her a check for whatever money she had.

Aside from the Walnut Creek branch, Home Savings of America shut down two more banks in Southern California and one in Minnesota this past week.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)