Aug. 1--Local consumers should not fear for assets that are deposited in federally insured institutions, local bankers say in response to growing concerns about the banking industry.

With the recent Federal Deposit Insurance Corp. (FDIC) takeover of IndyMac Bancorp, based in Pasadena, Calif., the media has increased scrutiny unfairly on the whole of the banking industry, says Terry W. Frydenlund, president and chief executive officer of 1st Bank Yuma.

To ease confusion, guidelines and tips have been released with the support of the Independent Community Bankers of America (ICBA), a representative organization for more than 5,000 community banks across America.

In particular, Frydenlund and the ICBA aim to tackle the myth that it is safer to deposit money in bigger banks.

William Savory, president of The Foothills Bank, admitted that community banks often have to work a little harder to convince consumers of their safety. He attributed this to the fact that community banks aren't nationally branded.

1st Bank and the ICBA responded to this challenge by reminding consumers that FDIC-insured community banks are as safe as any other FDIC-insured financial institution.

The FDIC backs deposits in FDIC-affiliated institutions within certain limits. An individual account holder can deposit up to $100,000, or up to $250,000 in retirement accounts, and be assured that access to their money is guaranteed no matter what event befalls the institution itself.

Financial institutions covered by FDIC insurance will display official signs at teller windows and other prominent locations around their branches and Web sites.

Cynthia L. Blankenship, chairman of the ICBA and vice chairman and chief financial officer for the Bank of the West, emphasized in a news release the security of FDIC-insured funds: "Since the FDIC was founded 75 years ago, no one has ever lost a penny of FDIC-insured funds."

Tom Thompson, regional president of the National Bank of Arizona, told The Sun FDIC regulation is the key to stability in the banking industry. "It's kind of like having lights. Without it we wouldn't be in business."

According to Frydenlund, "We operate under more regulation than most any industry." For this reason, he argues, greater distinction needs to be made between banks and investment firms and brokerages.

Under FDIC regulations, amounts exceeding $100,000 per depositor, or $250,000 per owner in certain retirement accounts, at the same institution will not be guaranteed to the depositor but there are ways to maximize the total eligible deposits at a single institution.

For instance, a consumer may choose to open Payable on Death, or P.O.D., accounts that will further expand their total amount of FDIC-insured deposits at a single financial institution.

Among the many local banks reaching out to inform customers of these regulations is The Foothills Bank.