Earlier this week, the Federal Reserve named four banking giants that failed its annual stress test.They were Citigroup, SunTrust, MetLife, and Ally–and they were none too pleased about it.
If you’re not up to speed on the comings and goings of the Fed, the stress test is basically a way to gauge whether big banks would have enough cash on hand to weather another market collapse.
For the four that flunked, it means a lot of bad press and jabs from Occupy Wall Streeters, but for the average consumer, there’s really not much to sweat, says consumer reporter Clark Howard.
“There’s nothing you need to do at all as a customer if you’re with a bank that failed the stress test. You’re covered in two ways, really. At the most basic level, there’s FDIC coverage of $250,000 on your account.
Beyond that, there’s backstop coverage, which means these banks still enjoy incredible backing from taxpayers.”
Focus on the good news: Most of the banks passed the test and aren’t likely to go belly-up if the worst were to happen. It’s just too bad they had to rely on taxpayers to build back their reserves in the first place.