Five U.S. banks and three federally insured credit unions failed in 2026, and in every one of those eight cases the failed institution’s depositors kept full access to their money because their balances moved automatically to a healthy, insured institution. The most recent failure, Philadelphia’s Tioga-Franklin Savings Bank, closed on August 21 and became the fifth bank to fail this year, the most in a single year since 2023. The pattern traces back nearly a century: the Federal Deposit Insurance Corporation says that since 1933, no depositor has ever lost a penny of insured funds, a promise this year’s eight failures tested and kept.
Five Community Banks Have Failed Since January, the Most Since 2023
The year’s first failure came on January 30, when regulators closed Metropolitan Capital Bank & Trust, a Chicago institution whose collapse was projected to cost the FDIC’s Deposit Insurance Fund about $19.7 million. Community Bank and Trust – West Georgia, based in LaGrange, Georgia, followed months later as the second failure of the year, a collapse the FDIC estimated would cost the fund roughly $97 million, subject to adjustment as the resolution proceeds.
Two more banks failed in quick succession over the summer. In early July, the Office of the Comptroller of the Currency closed the sole branch of Kentland Federal Savings and Loan Association in Kentland, Indiana, previously the nation’s smallest standalone bank, in a failure the FDIC estimated would cost the fund about $1.2 million; an unaffiliated institution also named Kentland Bank bought the failed thrift’s assets and assumed all of its deposits. A week later, the $73 million-asset Small Business Bank of Lenexa, Kansas became the fourth failure of the year, continuing a pattern of small, community-scale institutions rather than large regional banks.
Tioga-Franklin Savings Bank, a 153-year-old, $68 million-asset thrift, became the fifth bank to fail in 2026 when the Pennsylvania Department of Banking and Securities closed it on August 21 and named the FDIC receiver. Second Federal Savings and Loan Association of Philadelphia assumed all of Tioga-Franklin’s deposits and most of its assets, reopening the failed bank’s sole branch as one of its own branches three days later, and the FDIC estimated the failure would cost the Deposit Insurance Fund about $5.5 million. Five failures mark an uptick from the two recorded in both 2024 and 2025, though still far below 2023, when five banks failed within months of each other, including Silicon Valley Bank and First Republic.
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Three Federally Insured Credit Unions Also Closed This Year
Credit unions had their own string of failures in 2026, all handled by the National Credit Union Administration rather than the FDIC. The first came in Glassport, Pennsylvania, outside Pittsburgh, where NCUA placed Copper & Glass Federal Credit Union into conservatorship in late 2025 before liquidating it in April 2026 after examiners found it insolvent with no viable path to recovery.
The second, People Trust Community Federal Credit Union, served Pulaski and Saline Counties in Arkansas from North Little Rock and reported 1,830 members and roughly $1.45 million in assets on its most recent call report. NCUA first placed it into conservatorship on January 16, 2026, citing unsafe and unsound practices, then liquidated it on April 30 after determining the credit union was insolvent and in violation of the Federal Credit Union Act.
The third, African Diaspora Federal Credit Union in Saint Ann, Missouri, a St. Louis suburb, closed on August 6. The small credit union, which served members of the African Diaspora Council and held $547,479 in assets across 183 members, was liquidated after NCUA found it insolvent and in violation of numerous provisions of the Federal Credit Union Act and NCUA regulations, including operating in an unsafe and unsound manner.
The FDIC and NCUA Have Never Let an Insured Depositor Lose a Cent
Both agencies insure deposits the same way: up to $250,000 per depositor, per ownership category, backed by the full faith and credit of the United States. The FDIC’s Deposit Insurance Fund covers banks and thrifts, while NCUA’s National Credit Union Share Insurance Fund covers federally insured credit unions, and both are funded by assessments on the institutions they supervise rather than by direct taxpayer appropriations.
The mechanics work the same regardless of an institution’s size. When a bank fails, the FDIC typically lines up an acquiring institution in advance, so deposits transfer automatically and the failed bank’s branch reopens under new ownership within days, sometimes the next business day, as happened with Tioga-Franklin and Second Federal. When a credit union is too small or troubled to attract a buyer, as with all three of this year’s credit union failures, NCUA’s Asset Management and Assistance Center pays out insured shares directly and mails correspondence to affected members within about a week of the closure.
The FDIC states plainly that since 1933, no depositor has ever lost a penny of FDIC-insured funds, a record that has held through the 2008 financial crisis, the 2023 regional-bank turmoil and this year’s smaller, more isolated failures alike. The eight institutions that failed in 2026, combined, held a small fraction of the assets lost in 2023 or 2008, a gap that underscores this year’s failures reflect isolated management and capital problems at small institutions rather than any systemic strain on the banking system.
The Insurance Gap This Year’s Bank Failures Don’t Cover
None of this year’s eight failures cost an insured depositor a dollar, but deposit insurance only answers the question of what happens when an institution collapses. It says nothing about a transfer freezing an account by mistake, a mailed check going astray, or a collector calling about a balance that was never actually at risk during the transition. Those gaps are typically left for the account holder to sort out alone, often without knowing which rule applies.
The Bank Account & Debt Protection Kit is a 10-page kit covering the 2-month bank protection rule, the frozen-account response, and a protected-funds and dispute log for keeping track of what was said and when.
See the frozen-account steps and the dispute log in The Bank Account & Debt Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
