Letter to the Editor: A Sad Day for the Napa Valley

On Friday, February 18, 2011,, Napa, CA was closed by the California Department of Financial Institutions, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information, which should answer many of your questions.

Press Release

The FDIC has issued a press release (PR-040-2011) about the institution's closure. If you represent a media outlet and would like information about the closure, please contact Greg Hernandez at 1-202-898-6984.

All deposit accounts, excluding certain brokered deposits, have been transferred to Bank of Marin, Novato, CA ("assuming institution") and will be available immediately. The former Charter Oak Bank locations will reopen as branches of Bank of Marin during regular business hours.

Your transferred deposits will be separately insured from any accounts you may already have at Bank of Marin for six months after the failure of Charter Oak Bank. Checks that were drawn on Charter Oak Bank that did not clear before the institution closed will be honored as long as there are sufficient funds in the account.  For more information on deposit insurance, you may speak to an FDIC representative by calling 1-877-367-2717 or visit EDIE, the FDIC's Electronic Deposit Insurance Estimator.

EDIE - FDIC's Electronic Deposit Insurance Estimator

You may withdraw your funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with Bank of Marin as long as the deposits are not pledged as collateral for loans. You may view more information about Bank of Marin by visiting their web site.

Bank of Marin (www.bankofmarin.com)

The Automated Teller Machines (ATM) and online service will remain available.

The bank will maintain its regular business hours, and you may continue to use the services to which you previously had access, such as safe deposit boxes, night deposit boxes, wire services, etc.

Your checks will be processed as usual.  All outstanding checks will be paid against your available balance(s) as if no change had occurred.  Your new bank will contact you soon regarding any changes in the terms of your account.  If you have a problem with a merchant refusing to accept your check, please contact your branch office.  An account representative will clear up any confusion about the validity of your checks.

All interest accrued through Friday, February 18, 2011 will be paid at your same rate.  Bank of Marin will be reviewing rates.  You will be notified of any changes.

Your direct deposits and automatic withdrawals will be transferred to your new bank. If you have any questions or special requests, you may contact a representative of your new bank at your branch office.

Loan Customers

If you had a loan with Charter Oak Bank, you should continue to make your payments as usual.  The terms of your loan will not change, because they are contractually agreed to in your promissory note. Checks should be made payable as usual and sent to the same address until further notice. If you have further questions regarding an existing loan, please contact your loan officer.

For all questions regarding new loans and the lending policies of Bank of Marin, please contact your branch office. Please see A Borrower’s Guide to an FDIC Insured Bank Failure for additional information.

Possible Claims Against the Failed Institution

Claims against failed financial institutions occur when bills sent to the institution remain unpaid at the time of failure. If you or your company provided a service or product, leased space, furniture, or equipment to Charter Oak Bank after Friday, February 18, 2011 and have not been paid, you do not have a claim against Charter Oak Bank. Please follow your normal billing procedures by providing an invoice as instructed.

If you or your company provided a service or product, leased space, furniture, or equipment to Charter Oak Bank prior to Friday, February 18, 2011 and have not been paid, you may be entitled to a claim against the bank. If you provided a product to or a service for Charter Oak Bank prior to the bank's failure for which you have not been paid and you have not received communication, please contact:

FDIC as Receiver for Charter Oak Bank
40 Pacifica
Irvine, CA 92618
Attention: Claims Agent

Shareholders have a claim against the receivership; however, they have the lowest priority of claim. You should discuss this with an accountant and/or the IRS concerning the exact requirements necessary to recognize the investment as a loss for tax purposes. The FDIC does not require stockholders to file a claim with the Receiver. However, we recommend that you keep our office informed of any address change, should we need to contact you in the future. 

Priority of Claims

In accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority:

Dividend Information

No dividends have been declared at this time.

Dividend Information on Failed Financial Institutions

Brokered Deposits

The FDIC offers a reference guide to deposit brokers acting as agents for their investor clientele.  This site outlines the FDIC's policies and procedures that must be followed by deposit brokers when filing for pass-through insurance coverage on custodial accounts deposited in a failed FDIC Insured Institution.

Deposit Broker's Processing Guide