What you need to know if your bank fails

More institutions are likely to collapse because of bad loans

Eileen AJ Connelly / Associated Press

New York -- Dozens of banks have failed this year. What do you need to know if yours is next?

The number of bank failures has reached 115 since January -- more than four times the total for 2008 and the most since the savings and loan crisis in 1992. And most experts expect problems caused by unpaid loans to force many more closures in the coming years, mostly among small, community-based banks.

Banks are typically shut down late Friday afternoon. That gives the Federal Deposit Insurance Corp. time over the weekend to handle the shutdown, which most often involves transferring deposits to another bank that is taking over the failed institution.

Here are some questions and answers:

Q . Why would a bank be closed by regulators?

A . State or federal regulators can decide to close a bank if it is in danger of being unable to meet its obligations to depositors and others -- basically, if it looks like it's going to run out of money.

Most of the banks closed in the past year have suffered because the housing crisis and the recession have led consumers and businesses to stop paying off mortgages and other loans.

Q . What exactly does the FDIC insure?

A . The FDIC covers money deposited in savings accounts, checking accounts and certificates of deposit up to $250,000. But that limit can apply to the same person in several different ownership categories, like single, joint, held-in-trust and retirement accounts.

Q . What if someone "banks" at a credit union?

A . The National Credit Union Administration, a U.S. government agency, provides members of these nonprofit institutions insurance up to $250,000 through the National Credit Union Share Insurance Fund. So far this year, 19 have failed.