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90.3 WCPN

2010-03-02

90.3 WCPNideastream®: Failed Banks’ Assets Find Unusual Homes

Failed Banks’Assets Find Unusual Homes

Tuesday,March 2, 2010

Bankfailures can be dramatic. Regulators swoop in on a Friday night like a swatteam, seizing the troubled institution, and in most cases, orchestrate atakeover by another bank. But often the new owners don’t want everything,leaving the Federal Deposit Insurance Corporation stuck with unloved copiersand repossessed Bentleys. ideastream®'s Dan Bobkoff tells us what happens toeverything left behind

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Therewere 140 bank failures last year—the most since the Savings and Loan crisis twodecades ago. That’s not great for the economy, but it’s very good news foranyone looking for a deal.

WORLEY:“It all has to go.”

PennyWorley is president of Penny Worley auctioneers near Cincinnati. That’sone of the three auction houses with contracts from the FDIC to sell off allthe leftover bits of failed banks.
WORLEY:“Everything from a 56 foot yacht to high tech conferencing systems, ITequipment, high end furniture.”

Worleyand her competitors place these so-called “other assets” online for auction.The proceeds only go a small ways to make up the losses to the FDIC’s fund, butevery bit helps.

Muchof the furniture and computer equipment goes to small businesses.BYERS:“They thought it was a really great concept to travel around in an armored carlimo.”

Byerslost out on the armored car, but he keeps bidding on other stuff.

BYERS:“I’ve bought fireproof filing cabinets. Couches, TV’s. I’ve bought safes, undercounter safes, big commercial safes, money counters.”

Thoseare particularly useful when your business involves a lot of dollar bills.

Byerssays more people know about the auctions now. It’s harder to get a real steal.But he still thinks it’s an opportunity.

BYERS:“I’m 45 years old. This is the last time I’ll ever see the banks collapse likethey’re doing so I gotta stock up on stuff that either I’m going to use or, ifI don’t, I just sell it off to somebody else.”

Banks’ loss; Byers’s gain.