According to the Congressional Oversight Panel, many of the smaller banks that received bailout money from the government may need more cash in order to survive. Less than 10% of these smaller financial instructions have paid the government back the funds they were loaned, and some have even missed dividend payments. I have included a section of a WalletPop.com story below on this new development, but you can find the full text here.
If you keep up on banking news, you may have heard the most recent dire report on small banks: If your small bank has taken bailout money from the federal government, that's a good sign your financial institution may be in trouble.
That's the latest from the Congressional Oversight Panel, which last week unveiled a report that drew attention to the fact that most of the small banks that received bailout money are struggling to pay it back.
If you're doing business with a small bank and are suddenly worrying about its health, here's some perspective:
Most of the small banks out there are doing just fine. The U.S. has approximately 8,000 banks, from a handful of giant, nationally known banks and all their branches (Bank of America, for instance, has approximately 7,500 branches across the country) to all those regional and local banks scattered across the 50 states.
Out of the more than 7,900 small banks that remain after you take away, say, the nation's 30 largest banks, a scant one-tenth -- just 707 banks -- took $205 billion of the $700 billion in bailout money. So plenty of small banks out there didn't take any bailout money and are doing quite well.