If you’re a Canadian snowbird with any bank accounts in the southern United States, you might be feeling slightly nervous about who’s holding your money. But to date, you can be confident your cash is still safe—that is, if you’re talking about cash or routine deposits. Investments in the banking companies themselves may be another matter, but for most snowbirds that’s not an issue.
To date, no bank depositor has lost any money, and with the FDIC (Federal Deposit Insurance Corporation) protecting all deposits up to $100,000 (and likely to increase that limit quite soon), anything you transferred into a US bank to tide you over during the coming winter down south will be safe too.
What you will notice, though, is a drastic change in the banking landscape, with some of the old favourites you have become used to—possibly your own branches—soon taking on facelifts.
In Florida, for example, the omnipresent WaMu (Washington Mutual) and Wachovia have been taken over by the giant JPMorgan Chase and Wells Fargo banking operations respectively—both of them large national operations, and both strong. Both WaMu and Wachovia were failing operations, but they were not part of any government bailout. They were acquired by their competitors with a slight nudge from government regulators. JPMorgan Chase, for example, has long sought to break into the massive Florida and California markets, which it achieves with its acquisition of WaMu.
Bank of America is still present throughout the US and the entire sunbelt, and in Florida SunTrust retains its own name and identity, though it has been courted by other operations looking to expand their exposure in the sunbelt.
In the case of both WaMu and Wachovia, day-to-day operations have gone on undisturbed and the changeover to their new identities is likely to take at least a year. Along with this there will likely be some contractions, some branch closures, and possibly more consolidations among the smaller banks. In effect the banking landscape may end up looking more like Canada’s with fewer, but larger, national institutions—not necessarily a bad thing.
At least for the present, the reasonable approach seems to be to stay liquid, keep your assets flexible, and—if you’re still the nervous type—remember that virtually all ATMs, especially those at bank branches, can give you access to your Canadian chequing accounts at good exchange rates. Before you leave Canada you may want to check with your own bank to see if they have favoured arrangements with certain US banks. Scotiabank customers, for example, will find reduced ATM transfer charges at Bank of America ATMs. So do a little investigation before you leave home and save a few dollars each time you make a withdrawal.
The use of ATMs may be particularly useful in these turbulent times when you may not want to gamble on making large cash transfers that tie you in to exchange rates that you could regret taking in a couple of months.