Banking Crisis and How to Protect Your Cash? W/ Guest Jonathan Morris CEO of Titan Bank

Mat Sorensen
All right welcome everyone to a special directed IRA webinar and directed IRA podcast. This is a co production of from directed IRA studios. I’m Matt Sorenson CEO of directed IRA joined by the great and powerful Aaron Halderman, chief operating officer here. Today is a great webinar. I’m excited because I have questions I want answered. So, you know, we’re not like Congress where we can pull all the CEOs of the banks in front of us to come testify, but we got one. Okay. We got Jonathan Miller, a good friend of ours, a heck of a skier, by the way. But Jonathan, CEO of Titan bank, and we thought it’d be great to have him on to talk about what’s going on in banking, answer a lot of the questions we started getting last week, my email started blowing up. Yours did, I’m sure over the weekend, you’ve had a fun, like last, you know, 10 days, I’m sure. But we’re just gonna dive into this. Remember, it’s recorded, as Aaron mentioned, so you’ll be able to catch this later. And we’re going to let a lot of questions are going to, we’re going to pose to Jonathan from you. We’ve got our own set of questions, but we want to get some of your questions answered as well. So let’s kick it off. Jonathan. I mean, tell us a little bit about yourself. Maybe Titan bank, and so people have some perspective of you. We know that you know your stuff. But when you tell them about everybody about yourself.

Jonathan Morris
Just to give a quick overview on Titan bank, we’re 116 year old National Bank, we’re based in Texas, we bank, customers around the country and have a special focus on self directed retirement plans. We work with hundreds of small businesses are 1000s 10s of 1000s of small businesses, I should say. But self directed, has been an area that we’ve built a special capacity around. We have incredible customer support, and really good technology.

Mat Sorensen
That’s why we’ve loved them for all those reasons, right? Yeah. I was funny when you said 116 years. I’m like, Okay. Titan bank is lasted through the Great Depression, World War One in to, like the financial crisis. Oh, my gosh, okay, that’s

Jonathan Morris
good. I keep having people ask me like, when did I start it like, well,

Mat Sorensen
existed before I was a little, it’s been a little while. Yeah, that’s awesome.

Aaron Halderman
Well, thanks so much for being on and taking time out of your schedule. I know, things have just been pretty wild and crazy out there. And so that’s why we wanted to pull this kind of like, you know, live webinar together today. Yeah.

Mat Sorensen
Okay, let’s just tee it off. I think everyone’s been here in the headlines, of course, you know, to pretty large, significant banks go into the FDIC, somewhere on the brink. But what do you think from like, the investor or business owner? What should they be thinking about right now? And they’re thinking about their banking and their bank accounts? Let me try to put this in perspective from the beginning. And I don’t know, I’ve tried to frame it myself. And I’m like, I don’t know, ask Jonathan. Let him frame it.

Jonathan Morris
There’s, there’s a lot going on. But the most, the most interesting thing is usually nobody cares about this banks utility. They’re all natural commodity. It’s like, you just go to the bank, your money’s fine. And nobody, nobody thinks about it about once every 15 years. All of a sudden, everyone remembers, yes. Like, these banks are all different. And there are differences between them. And also which bank you use and how you set it up is an important financial decision. People don’t think about that until there’s a crisis, and then all of a sudden, their panic that their money might go away. So we’re in we’re definitely in one of those time periods right now. And we’re still in it. Today was another bad day for banks. Were one of the biggest banks in the country. First Republic is teetering if they’re going to survive or not.

Mat Sorensen
Yeah. So help me if I’m an investor, whether I’m self directing, I’m a real estate investor. I’m a business owner. Like I think those are the questions I started getting, some of them hold cash, let’s just start talking about that everybody’s of course concerned about their deposits. Over 250 grand if you’re a small business owner, your payroll, your just regular operating business, if you like 10 employees, you can be holding 250 grand worth of cash. It’s not just like big corporate America. Our lot of our self directed retirement accounts, you know, in between deals and transactions are holding more cash than that. So what what advice would you give them about their situation? And maybe let’s explain some stuff about the FDIC insurance.

Aaron Halderman
Sure.

Jonathan Morris
Well, why don’t we step back for a moment and talk about se as you suggested law. So the FDIC insurance was put in place in the 1930s after the bank runs. And nobody has lost a penny of FDIC insured money since then. So that’s a great thing our country did. It was the first country that did this and it was very successful for banking system and stability in the country. FDIC insurance works in that every tax ID number that is at a bank account with an account is insured up to $250,000. So that means, if you’re an individual, and you have a bank account for your, your social security number is insured up to $250,000. And if you have, if you’re a company, and you have an EIN number, or a fund or an LLC, or a trust, that EIN number is insured up to $250,000. So important things to note, if if these are your personal accounts, and it’s a joint account, so maybe you have yourself in a spouse on the account, that’s $500,000. Because it’s, you know, two ein numbers in the account. That will up okay, that’s what people often ask me is, okay, so can I get six accounts at the bank all with the same tax ID number? And does that give me 1.5? million? And the answer is no. It doesn’t work that way. It’s it’s per institution. So sometimes,

Aaron Halderman
let me ask you that, Jonathan, so I could have so it’s not that I give 250,000 FDIC insurance per EIN and I liked how you said that because that includes your you personally, your social your LLC with an EIN. So let’s say I’ve got a personal bank account at Titan bank, and I got an IRA LLC at Titan bank. Those are each separate, I got two and 50 FDIC insurance on both of those. Right? Then let’s say I’m also at Bank of America with another personal account, same social security number, but I’m, since it’s a different institution, I’m getting another 250,000 of FDIC insurance.

Jonathan Morris
Exactly. Okay. All right. And that’s, that’s 100%. Correct. Or if you had a, let’s say, for instance, you had a company at our bank, or, you know, an LLC, that for some reason, owned another LLC, and that sometimes it’s restructuring purposes, that’s 500,000, if they have different ein numbers, which they will. So oftentimes, we have business owners with us that have a variety of real estate deals going and each one is in their own LLC. And we advise them that to kind of minimize their risk, not necessarily on the banking side, also in litigation, just, you know, minimize attorney and that, and that’ll give you a 250 for for each one of those. So there are there are ways to, you know, take advantage of the screen insurance that that we get that actually the banks pay for the FDIC insurance, it’s not taxpayer funded, I pay for it. Yeah. But there’s ways to take advantage of it and maximize it. And you should be smart about that. So

Aaron Halderman
just to want to make sure to because we’ve already got a ton of those questions coming in. That is that a combination of than all accounts, so if they had to checkings and two savings to be a combination of all that it’s not per account, it’s per tax ID or social correct?

Jonathan Morris
per tax ID per regulated institution. Okay. So if you if you like, like, like Matt said, if you happen to have an account with Titan bank, under an EIN number for your LLC, and then you and then God, forget, Forbid, you have the same account at Bank of America. And for example sake, but that would give you another 250,000. And as long as it’s with regulated FDIC insured institution, you’d be okay. In that in that case, and that’s all part of the rules. And that’s how it’s how it works.

Aaron Halderman
So we have some, like pretty sophisticated, you know, people that I think it’s just the crowd like, what are you self direct? Do

Mat Sorensen
you just get a little bit more creative there entrepreneurial?

Aaron Halderman
Law, love it. So let’s go back on the institution. So I got two questions in here. And they were about Okay, what if there’s a subsidiary of another institution and I got, you know, holding company, one institution, I got a subsidiary another institution. Does that matter? Is it just as long as they’re separate period?

Jonathan Morris
It’s as long as they have separate EIS. Just remember, it’s all about the tax ID. So when the FDIC comes in, all they do is they just look at a big database of all the tax IDs in that bank, and they don’t care how many accounts make up that one tax ID. They’ll just look at how many deposits does each one of these take? Tax IDs have that whatever, you know, Silicon Valley Bank or whatever the bank is, in those say we cover the first 250 of that tax ID. Yeah. And that’s, that’s, so you could nest it as long as different tax IDs. And there is a little proviso, the FDIC says, You can’t just create entities purely for the purpose of getting FDIC insurance. So these, there has to be some reason these entities exist, other than getting getting the insurance, I’ll just put out the exception case there. That’s a good point, which most people don’t know. But apart from that, and

Aaron Halderman
but let me pause you there. Because even as we you know, we have customers and I know you do that have their, you know, their, their business bank account, with Titan, an IRA LLC, with Titan, let’s say, or a solo 401 K there. Or maybe it’s someone picked another institution doesn’t matter. Those are all separate di ns, your social your business, personal business, your IRA LLC, mean, your solo 401 K, we get a separate EIN for your sole 401k. I know some people don’t actually do that. Some other providers, but we actually do that this is there’s a tax reason we do that, but also apparently a benefit on the on your FDIC insurance. So they’re getting 250 in each one of those little buckets, because they have the separate tax ID or EIN

Jonathan Morris
Correct. That’s awesome. Correct. And we’ve seen some providers that set it up that we advise against, but they set it up, or they’ll use, you know, on some types of accounts, that are really entities, but they’ll use the social security number. And like, that’s not a good idea for all for obvious reasons, but one of them is for the FDIC insurance. So I think you get the way that you’ve structured it for your clients is very smart, and protects them against all kinds of risks. There are so we have customers with in excess of 100 million at our bank. And in liquid deposits, most of them nor bank very well in frankly, it’s not a concern, these things but we do have some large, individual customers or institutions that want in excess of $250,000. So we have a tool to do that as well. We’re able to give automatically up to about $150 million of FDIC insurance. How do we how do we do this, I don’t want to confuse people here. But we can very seamlessly spread the funds out in the background amongst 1000s of banks around the US through a network that we use called Centrify that other banks subscribe to as well. So we’re not the only bank that does it, we just make it, we just make it easier on our customers. And we can also provide insurance in excess of that through through some structures that we have. And I only say that because some of your customers are very sophisticated, and thinking okay, so how do I get around these rules? And there’s tools in place that actually allow you to extend that insurance? If you want to put the work in to do it?

Mat Sorensen
Well, I think that’s a great tool. I think a lot of people are familiar with that option. Because right now, a lot of people are holding cash, they really are, you know, they’re, they’re especially self directed investors, they’re waiting for a deal. They’re looking for the next opportunity. I want clients that I’ve got my vulture fund ready to go on who’s waiting for some kill on the side of the road to go to go? And but in the meantime, how do I protect that cash and sounds like this type of program? I got more than 250. I’m a little spooked of what’s going on out there in the banking world. I can’t actually get this FDIC insurance. I mean, is there a fee for that or you guys make money on the posit, we there’s no fee or like how we lost, we don’t charge

Jonathan Morris
a fee for that we just give it it costs us a little bit. I give it as a complimentary service, my challenge in this period. So as a bank, we have almost 40% of our assets in liquid cash at the Federal Reserve, which is one of the highest percentages in the country where we’re about as secure bank as you can get. But it’s tough for me because people if somebody calls me and says that the Silicon Valley Bank CEO said that the Friday he got taken over the Signature Bank CEO said that on Friday as well. And then Sunday, he doesn’t have a job and they don’t have a bank anymore. So what it’s been somebody really has questions instead of trying to make them an expert on banking. It’s much easier for me to say here’s the situation for the bank, but don’t even worry about this. I’ll just give this to you for free, if you’d like about it that the main thing though, is we try to make sure that the customers if we put it in place We try to do it for customers, since this a little bit extra paperwork and a little bit extra work for them actually have more than $250,000 with us because if they don’t, they never had any risk anyways, there, it doesn’t help them. But if it’s a real concern or for their businesses, or they’re managing other people’s money, and they have a lot of it, and they’re concerned about that, we’re more than happy to give a free solution to help them out.

Aaron Halderman
Jonathan, could you hit on just kind of the and I want to come to hit on something with directed next. So tying bank does have physical locations, but can you explain to kind of everybody what a you know a banking charter allows you to do and how it can operate not just in those physical locations that you have. Some people are a little bit newer to I’d say, 100% online banking or not having a branch that they can go drive, you know, 15 minutes and go see.

Jonathan Morris
Absolutely. So the government, the government, issued banking charters long time ago, they haven’t issued new ones in in a long time. And what the banking Charter effectively allows us to do is accept funds and provide this FDIC insurance. And it’s very tough to it’s, it’s tough to be able to buy a bank, it’s certainly tough to be able to create a new a new bank. When we’ve really we mostly bank businesses, we do help, we do help individuals, and we have branches in Texas. But we we bank individuals, and as we’ve talked, we bank, entities, and companies and as we’ve talked to those customers, what we’ve heard over and over again, is I don’t want to have to drive to a branch anymore, I don’t want to have to drive to a branch to wait in line, have stale coffee, open up an account, talk to a loan officer there that doesn’t know anything and is trying to sell me something that I don’t want, I definitely don’t want to have to drive to a bank to send a wire or send an ACH, or to validate something. I was hearing it today that at Bank of America, you can’t you can’t send a wire unless you over $500,000 Unless you go there in person, a lot of a lot of customers need to buy a building or do business transaction and it’s over, it’s over half a million dollars. So what we’ve really focused on was investing heavily into technology, we can allow customers to set up new accounts in roughly about five or 10 minutes online. All of the wires are done online. If you want to have multiple people approve wires, we have all kinds of security settings in there that you can set it up that two people have to approve a wire three people have to approve a wire a wire over $1,000 have to be approved by two people. But under that, you know, somebody can do themselves. And we’ve put all kinds of resources into instead of spending money on branches have seamless integration with QuickBooks, how do we have all types of features with reporting that makes your life easier? And we keep hearing from customers more and more again? Yeah, we want more technology. We want that to be the focus, and we don’t want to have to drive into a branch.

Aaron Halderman
Thanks for that explanation. I just had. We had somebody we’ve gotten a lot of calls in coming. We just had a few questions come in, on directed IRA, where we keep you know, our customers funds, yeah, for their retirement accounts. What’s the FDIC insurance? How does that work? You know, I’ll

Mat Sorensen
explain that for directed. So, you know, it directed so we’re not a bank where we’re a depository institution, we’re a financial institution regulated and such, we’re able to get what’s called pass through FDIC insurance from the banks, we deposit funds with so many, you know, on our dock because we have Wells Fargo, and there’s a bunch of other banks that we use for cash, but those are all Pat, none of the problem banks you’ve heard of. But these are institutions where we get passed through FDIC insurance because we have a separate accounting for your account here. And that you’re getting 250,000 Max. Okay, so, and it’s again, if you have two Roth IRAs here, it’s still 250 Because that’s falling down to you individually on your social if you got a solo K, you’re probably gonna get separate FDIC treatment there again, it’s coming through as a pass through to the to the underlying bank so so you have FDIC insurance here with your if you have any uninvested cash here at directed up to the 250 250,000 limit as well. Now those you with Ira will cease in addition to that if you have cashier and an IRA LLC, you know, it sounds like what Jonathan saying, and I’m learning so these FDIC rules for the i NS and stuff. Sounds like you’d have separate FDIC insurance there on your IRA LLC checking account first what you’d have here with any cash we’re holding. So that’s how it works with with any uninvested cash here. It’s called pass through FDIC insurance that we as a Trust Company, do because there’s certain requirements we have to fit when we go through our audits to pass on that. But that’s, you’re sitting here.

Aaron Halderman
I love it. Oh, thank you for that.

Mat Sorensen
Um, okay, so let me kind of summarize a couple of key points, Jonathan, is that I love the separate ein separate institution is giving you 250, a piece of FDIC insurance. For people that have more than 250. You know, maybe you got to split it between different banks is maybe you got 500 or 750. You know, you might want to split it between a few banks. But someone that’s got millions, let’s say they don’t want to have 10, bank accounts everywhere, you’ve got a solution already for that, where we’ll just basically park it with us. And we do the work of getting it through a network of other institutions where you’re you have the 250. And depending on how much someone puts in, you guys source it out up to, I don’t know, 100 million or whatever, between the different banks in that network. Is that kind of what people need to know right now, in terms of the FDIC insurance and maybe strategies?

Jonathan Morris
That I think the most important thing to know is, if you’re educated, there’s ways that you can be 100% government protected easily. And and that’s and people that are actually logging into this webinar care most of the country, doesn’t it until they lose their money or something like that happens. But yeah, you know, it’s a, this is a manageable business process and manageable risk that there’s tools out there for in is easy is easy to deal with. And once you get it set up, it’s not complicated at all, you can see which funds are at other banks, you can see which funds are at Titan, and for instance, you have $2 million in total, and 250 1000s that tighten, but you need to send a million dollar wire, it goes through seamlessly and overnight, we bring it back from the other banks in the computer systems do all of that.

Mat Sorensen
Okay, nice. All right. Tell me if you got any, any questions? Yep. We did. This was, you know, people heard about the bank term funding program. I think that’s the Treasury FDIC program. I’m not sure who’s really taking ownership of that right now. But what is that? What should people know about that? Sure.

Jonathan Morris
Yeah, it’s a Federal Reserve Program, managed to the Treasury. But if I guess if we step back three banks have collapsed right now. Yeah. All for all for similar different types of banks. But for similar reasons. There’s initially silvergate bank that was heavy into the cryptocurrency space. There’s Silicon Valley Bank, and then Signature Bank. In all three had two things in common. The first was they took a lot of deposits in, in they invested into bonds, but they invested into long term bonds, the worst trade at the worst time. So right when government, the government ran the printing press, and all this cash gets printed, so guess where it goes, it goes into the banks. And then the banks have to do something with the money and they’re like, we’ll just go into government bonds that’s very secure, Fannie Mae bonds, things like that. But then they got crazy and said, well, we want to buy some some 20 year bonds, some 30 year bonds. And we’re going to put a lot of our money in that. So to give you a perspective, what happened on on a 30 year municipal bond, when rates went up 400 basis points, that bond lost 55% of its value. Yeah, now banks get to use kind of a funky accounting that most people get to use. But there’s all these special rules for banks. And that says, if we put in a category called has held to maturity, we can just count it at the original value, we don’t have to count it at what it really went down to right, you got to hold it normally, that’s normally fine. But they’ll have a second thing in common. They had very concentrated groups of depositors that were all related, that all knew each other, and most of which kept in more than $250,000. So when they all started talking to each other and saying, Hey, this bank has no equity left, and we might have a problem, the money flooded out and then all of a sudden, the banks had to sell those bonds, recognize the losses, so the accounting treatment didn’t help them anymore. And that’s what ultimately put them out of business. So what the bank term that’s my, I asked my mother to listen in. So that’s the most simple explanation of what happened because I’ve had the question from her.

Mat Sorensen
So explanation, the bank

Jonathan Morris
term funding program takes the accounting treatment to the next level. It says Guess what, not only can mapping your treatment on paper. But for the next year, that let’s say that $10 million bond, that’s now only worth four and a half million dollars that we talked about, the government will lend the bank, they’ll just give the bank $10 million against that bond as collateral. So they’ll say it’s not just accounting treatment, we will just give you the liquidity and in kind of kick the can down the road here. And in the bomb out on a year, if interest rates don’t go down, I don’t know what happens. But there’s a term in banking called pretended. And and, and I think kind of where where the government’s thought is, let’s let’s kind of head off a crisis right now. Let’s push this out of year. Yeah. And then hopefully, things will be more calm and something will have changed.

Mat Sorensen
Yeah. So that was the issue is that we’re having to sell these assets, bonds incur significant losses, deposits are flooding out. And so the the FDIC is running this or Treasury is like a joint program.

Jonathan Morris
It I think it’s the Fed, the Fed and Treasury, it’s through this is through the Federal Reserve Banks that it gets on, which is, which is coincidentally owned by the banks, the national banks like us. So it all the, the, the actual rails of how this whole banking system works get a little bit convoluted, but the main thing is that it’s giving banks liquidity. But ultimately, if the banks, you know, if, if these depositors keep withdrawing money from any of these banks, it creates a problem for them. And there’s a there’s another issue going on with first republic right now, which is a great bank, but it’s unfortunately, in the same situation.

Mat Sorensen
Yeah. Well, I think isn’t the Feds got another worry of everyone’s just gonna go to b of a chase wells, you know, they’re gonna just go to all the big banks, because they can get bailed out, you know, the government won’t let them fail. And, you know, and those are the ones I think people have probably pulled money for. And a lot of our probably gone to some of these bigger bank. So I think some of this program helps some of the midsize and smaller banks now that might be the ones more likely to fail.

Jonathan Morris
This is a program that helps survival of these of these banks. This is this is like a tourniquet that’s getting put in place right now. Yeah. And some of these banks, they need a mechanism to flood cash into these banks to try to keep them going. That the very that in, to give the most simple explanation of how a bank works, is a bank, if you start a new bank from scratch, which you can’t really do, but if you did, let’s say you put in $10 million of actual equity, that means actual investor money, cash into that bank, you can take in $90 million of deposits. And you got to keep that one to 10 ratio in terms of equity deposits, which is, which is all great. But if you lose 10%, if you lose on 10% of your loans, now you’re bankrupt as a bank. So not only did you go below the one to 10 ratio, but But you literally have no equity left and you’re bankrupt. The same thing happened. So every bank crisis that has ever happened to date has been for one of two reasons, fraud or loan losses. This is I was talking to the Federal Reserve a little while ago. And they said they don’t really know what to do, because this is the first time they’ve ever seen a banking crisis that didn’t involve those two things. What happened in this case is the bonds went down in the bonds wiped out that equity, and which the

Mat Sorensen
banks we would have otherwise been making loans right with that, they instead they bought the bonds rather than making loans, which they thought was secure. Yeah, that was the safest thing in the world, the bond that didn’t default, it just had a major price change.

Jonathan Morris
But when rates were zero, you had to take some duration risks and make any spread as the bank. And so banks banks took the whole industry took duration risk, but some took more than others. And if those remember that example of how the municipal bond goes down by 55%, when the interest rates go up, that that that’s what ultimately wiped out the equity in these banks and put them in trouble and this banks and the Charles Schwab bank is one of the worst was one of the worst hit right now. Right and, and it’s probably pretty close to bankrupt on paper, which is not somebody not a bank that you would expect to get bombs wrong. If anyone should get that Right, it’s Charles Schwab. But it’s it’s it’s it’s popped up in very surprising places right now,

Aaron Halderman
Jonathan is you’re out talking to consumers and small business owners, entrepreneurs, a lot of you know, our client base to like, what is kind of like your what kind of what is the conversation you’re having with people and some practical steps, things that they can, they can take action on, because we’re hearing different things, right, mainstream media, you know, saying, oh, everybody’s gonna get their money back, even the stuff that’s uninsured, you’re everybody’s going to be made whole. And, you know, we saw a lot of that when 200 Plus banks failed, you know, during the mortgage, banking, you know, other price meltdown we had, but what are you saying to people out there and some tactical things that they can do to protect themselves and be prepared, I guess, like, what can they do to prepare for whatever may happen?

Jonathan Morris
I guess the first thing I’d say is, number one, it’s always good. Even if you have a bank that you’re happy with, just have a backup, because things change. Sure, we have we have signature customers frantically coming to us right now we have we have SVB customers frantically coming to us. And just saying how quickly can you open because I gotta make payroll. And even if I get my money back, I gotta, it takes a while to set up accounts and get registered and get online. So it’s just, it’s just useful to think about banking is just another risk in your business. And it helps f redundancy, sometime. And, you know, our bank is rock solid ball of encourage people like don’t don’t count on anything being rock solid, you need you need redundancy. Second thing is, maybe the mainstream media’s right, and everything’s gonna get guaranteed by the government. Maybe it won’t. We’ve seen the last five years has taught us like, we just don’t know, it’s like everything we’ve never seen happen before it keeps happening. So why do you why do you need to worry about this, this is this is not something that you want to spend your time thinking about. So if you do keep more than $250,000, consistently in a bank, and it is under one tax deed number, put in place insurance go to go to a bank, like us, there’s there’s some others that can offer the program, it may not be as seamless on the technology, but put in place a program that we use called intra fie that guarantees these funds, and you don’t have to worry about it, you get peace of mind. And hopefully, you’ll never need it. But if you do, it’s nice to know you happen. And there was probably some tech CEOs that lost like two years of their life, under stress of losing all their funds on SP Intel until they got covered for political reasons. I think that, you know, the third thing is just get to know actually who you’re banking with. Because these banks are very, very different. A lot of like Matt said, there probably will be a lot of money that floods into the money center banks, but Chase doesn’t care about you, if you have a $2 million account, they just don’t, you’re not even on a $5 trillion bank or wherever they’re gonna end up at after this. You’re not even, they don’t even want to deal with you in the branch. Like they just they just they’re not going to help you. So I think that the difference is, if you if you’re a small business owner, if you have a self directed account where the big banks don’t even want those, definitely reject them. From what we’ve often seen, where, you know, oftentimes, a smaller bank that actually cares about the business is in a better position to help you. And we give, instead of just being too big to fail, in theory, we can actually give out now 100 and $50 million dollars of FDIC insurance $160 million of FDIC insurance needed.

Aaron Halderman
I have theirs, I have about 10 of the same kind of questions and I think since we have a true banking expert, it’d be perfect for you to hit on these Jonathan. So one is people are asking do credit unions fall under the same category with FDIC insurance that’s one part two is the brokerage houses to Fidelity my you know what what happens to you know, my money that’s actually invested you know, in with the brokerage and what about my uninvested cash at the brokerage so I got like a two part question with an A and a B for the brokerage

Mat Sorensen
you had Credit union and brokerage, man, that was generous.

That was two questions, not a two part question.

Jonathan Morris
So I’m gonna give a three part answer on that. They they select let’s start off with credit unions. Credit unions are insured by the NCUA National Credit Union Something something. But it’s effectively the same deal, they get the donor of the insurance 10 or 50,000 of insurance, same rules follows the follows the tax ID number, it effectively works the same way. That in terms of brokerage companies, this, this is where things get interesting, you would look at Fidelity and Schwab as the same thing. Yeah. And they would seem like the same thing. But fidelity is not a bank. In trouble Schwab is has a bank. So so they’re completely different in terms of how they work. Fidelity works with other banks to kind of park your money at I think they typically use a bank of UMB and some other in some other banks like that. And if you have money being kind of swept there, it may be one of two places it could be in a fund could be in a treasury fund a money market fund, or it could be a it could be in the bank, like like a UMB. And if you have more, if it’s on the bank side, you may think you’re protected, but you might have $600,000 liquid, and that might only be guaranteed to 250,000. So it’s something it’s something to be aware of. I’m not an expert on brokerage houses. Now with Schwab, it gets

Aaron Halderman
the money market fund, for example, that’s not FDIC insured, right? That’s not

Jonathan Morris
FDIC insured FDIC insured. Now, sure that that’s, that’s not FDIC insured. Now, they may invest some of the money in treasuries has full faith of the government. But we’ve seen in 2008, some of these funds got locked up for very long periods of time, where eventually people got their money, but it was like three months later, depending on the depending on the type of funds and that’s like the three months you will have money in the middle of a crisis. Yeah. If anyone that’s old enough to remember that time period, now with Schwab have their own bank so some of that money had swept to their bank. And some of its going into these funds, and people generally aren’t probably paying attention to the difference. But there’s a big difference because Schwab bank is one of the banks right now with very, very low tangible equity or potentially even depending on the day with interest rates negative equity and and that’s why their stock price is getting hit really hard right now. So people that have Schwab accounts and there’s a lot of them I’ve encouraged them to make sure that their funds are in a treasury accounts if they’re liquid right now. Or Treasury funds with them that are just custody by them as opposed to with Schwab bank

Aaron Halderman
it’s great point is this Schwab and TD now all the same because there’s TD Bank also to the banks probably operate separately though, I presume. I

don’t think they gobbled up TD Bank. I think they thought they just watched TD Ameritrade and Thinkorswim.

Jonathan Morris
TD bought AmeriTrade TDs TD owned by Toronto Dominion still, I think which is which is a big Canadian bank. And please don’t ask me rules on the Canadian insurance. Yeah, that’s what that’s what that’s where I that’s where I tap out not

Mat Sorensen
going there. I don’t even want to know Jonathan. I don’t have space for that.

Aaron Halderman
The brokerage houses, they’re covered. What is it? The SIPC

Jonathan Morris
is not what it is. Yeah, that’s I get a little bit. I get a little bit lost when it comes to that. Insurance. And I think that I think that’s $2 million. But it’s not like that’s an industry insurance program, I believe as opposed to a government program. So I don’t know. You see these small shops go down and they get coverage but I don’t know if that could take an entire fidelity or an entire show in how that works.

Aaron Halderman
Okay, so just so everybody knows on the questions, please throw them in. You want it in the q&a? Right? And don’t raise your hand we’re not taking questions from attendees that way unfortunately.

I mean, we have hundreds the people 500 people why we got

Mat Sorensen
a lot of questions so so we’ll just keep pulling some here. Jot the 10 more minutes we may be a little more questions. Alright, let’s see.

Aaron Halderman
You good with that, Jonathan. Yeah. Okay, Tristan, what throw up the slide on the account apps and stuff so we can hit on that too, for those that are on so we can there we go.

Mat Sorensen
Okay, by the way, I forgot to give our disclaimer. This is not tax or legal advice. Please consult financial advisors or your own professionals when making decisions. I was attorney that was attorney Matt that had forgot to come out in the beginning. Turn him up. He made a special guest appearances on the middle. Let’s put him away though. Okay, so let’s go here. Little stuff about Ty. bank here if you want to talk to this, or Jonathan, we just got a slide here about Titan bank and some of your account opening tools. I know you have a new online system setting up accounts, it’s super slick. I see ZERO FEES free, free, free 500 bucks minimum account balance,

Aaron Halderman
that’s very generous.

Jonathan Morris
I think that the most important thing to know about us is we really want your business. If you’re if you’re self directed, Ira, LLC, if you’re self direct, if you’re a solo 401k If you’re a small business owner, you are our bread and butter. And we built all of our tools, all of our technology around you. So we have a very quick and easy application process, we can have your bank account set up in a day, we can set you up with online access very quickly. It’s a really good online portal that you can control everything from and a great app. If you want to give your accountant read only access for instance, you can do that yourself. If you want to set up an accountant or a spouse as a second person to have to approve buyers, you can do that yourself love it. We also offer non recourse loans for self directed retirement programs, typically for purchasing real estate and Ryan Hughes runs sales for our self directed area and also runs that program so you can contact him at the email attached.

Aaron Halderman
So we throw in the the links there. So you can just go to directed ira.com Forward slash Titan bank hyphen, IRA LLC, and the same for solo 401k Forward slash Titan bank, dash solo k. And it’s right there. It’s like right, you start the application right there ready to go. And of course, there’s Ryan use direct contact info for non recourse loans, which Titan bank also does,

yeah, as well. It’s just these are, of course, like the bank accounts for these types of things. These are the bank account, you might use for a solo 401 K or for the IRA LLC. So

if you have another type of small business or personal account, so you’ll just go to Titan bank’s website directly. Not using either links. Cool. All right.

Jonathan Morris
All right. We appreciate it guys. And the probably the most important thing about us is you call us on the phone, we got a real person in the US that can help you. And we’re great on the surface. And that’s that’s why people ultimately stick with us. So we’ll do some

Aaron Halderman
like rapid fire q&a, and then we’ll just throw up this last side, and then we’ll we’ll kick it off here. Let everybody get that for a minute. So we do this once a year around tax season typically. So whatever kind of account you want to open up IRA, HSA, ESA solo K, maybe a crypto IRA, whatever we have, you’re going to do a checkbook IRA LLC, or a solo K structure, you get $150 off your first year annual fees, it’s the very best promo that we run, you’re just going to put in webinar 150. And that expires right when the tax deadline hits. So we’re extending that to everyone listening in and those that will catch the recording. So just webinar 150. We’ll take 150 off and put that promo code in when you do an Account app. And we appreciate that as well. Yeah, and for

Mat Sorensen
those you that are like been on the fence about a self directed account, or maybe you’d open a new one, go to schedule an appointment with one of our new account reps, go to directed ira.com. Schedule an appointment with one of our senior account reps or managers are on there. And we have some awesome people that can really help answer your questions and get your account open. Make it easy for you. So don’t feel like you’re on your own for many of you love just like, you know, to set up your account in your pajamas eating a bowl of cereal at night. That’s cool. Some of you might want to do a zoom call or a phone call with one of our people. We can help you with that too. So cool. All right. Thanks for the commercial interruption. Appreciate that, guys.

Aaron Halderman
Jonathan, Where would people find out kind of more of some of the fees related structure like for wire fees? Or do you charge for ACH is like anything outbound? Is that on the side, or can you talk to that briefly. It’s

Jonathan Morris
on this if you go to Titan back Titan bank.com ti ta NBA n k.com. You can see all of our fees there. There’s a fee schedule, but the chase were one of the only banks that country that giveaway ACH is for free. And including and a lot of our customers use us for that. So it’s very cost effective to move funds in and out using that system. Awesome.

Mat Sorensen
Alright guys, you got any questions you want to hit? Yeah,

Aaron Halderman
we can. Let’s, let’s hit it for like we’ll do a five minute rapid fire and then we’ll we’ll wrap it up. Sound good. Jonathan interested. Thanks. So much interested in hearing your thoughts on too big. That’s my quotation too big to fail, and opening overseas bank accounts that are not correlated with Western economies. That comes from Jeffrey. Thank you, Jeffrey.

Jonathan Morris
I’ll give you my opinion on eh, the too big to fail. Everything is to let’s not, though the one, the one thing that we’ve seen is, it’s like, and I’ve been living through it, but over the last, especially three years, like everything that’s happened we’ve never seen before. So maybe, maybe not, I don’t know, we don’t know what’s going to happen at any of these banks. The government doesn’t even understand these banks. And there can be systemic risks and these banks that just nobody’s aware of, and then ultimately, you got to deal with so I guess it’s, it’s, it’s too complicated for any human to understand if they’re really too big to fail or not. Yeah, it’s been an issue. I would be careful. Just my own my own personal advice. On the international bank account side, you need to disclose that on your tax returns. Yeah, I think you put a target on your back unnecessarily. If you’re putting if you’re putting funds abroad,

Mat Sorensen
and that’s called an F bar, by the way, you get to file an F bar with the IRS. And you’re right, like you’re kind of like raising the flag to the IRS of Have I done anything wrong? I have a foreign bank account. Look at me. It sounds cool. You know,

Jonathan Morris
it’s Yeah, and advisors will tell you, there’s all these tax savings and things like that most of That’s bogus, and they’re just charging me a lot of fees. So I would just be cautious. I mean, there’s ways to get as much US government, FDIC insurance as you’ll ever need, because you can split up into multiple entities if you go over the the really high limits that even you can produce. So an easier way to do that. I don’t think you’re actually minimizing your risk. You’re creating all kinds of new risks. And if you’re ultimately worried about the US government failing and not guaranteeing these deposits, we got way bigger problems than then going on at that point, because they can always run the printing press if they need to.

Mat Sorensen
Have there been any foreign banks that have had failures recently. I know some of the foreign bank branches I think of was it silvergate? Or for SVB. That Silicon Valley Bank? Yeah. Bought for one pound or something?

Jonathan Morris
Yeah. Although I am not sure. Maybe they took over all the deposits. They got bought up for a pound. Yeah, every everyone told me I should have been two pounds. But that was really a problem Titan bank wanted to take on. There are there are there are bank failures around the world. And those depositors are often not guaranteed. And that’s something great that our country, we knock the country a lot for, you know, all the obvious issues that we all know, exists here. But something that they got right in the 30s and has worked up until now is this FDIC insurance? And it’s given us a lot of stability in the US where other countries might not have had it.

Aaron Halderman
I just have a dorky question maybe has it? How long has it been? 250? It seems like it’s always been 250. Is

Jonathan Morris
it got changed in 2008? I think I think it got changed. I think if I remember right, because I believe we I believe we already bought we bought the bank in the last crisis, that the last time assets went down. So it I think it got changed in 2009. And it was 100,000. Before that, and I think it had been 100,000 since the 30s. Up until that point. To

Mat Sorensen
find new time to try and get a question.

Aaron Halderman
Got a lot of interesting crypto ones. We’re just going to stay on topic with the banking stuff. Jonathan, that was great. Although, you know, but he had love you want to hit him up on that. And I’m sure he’d love to love to talk about that. Jonathan, does Titan bank have any fed related stress test, they all have to undergo?

Jonathan Morris
We don’t because only the only the largest banks in the country, which are is called the speci banks that which are basically the systemic risk factors for the United States have to do them now. And I don’t know the limit, but it’s like over 500 billion I think in that range. However, you can always go to fdic.com of fdic.gov I’m sorry, and look us up there and you can pull our financial statements so all financial statements for all banks are public. We don’t have any derivatives. It’s a relatively easy financial statement to to understand.

Aaron Halderman
Love. Okay, those links again directed ira.com forward slash Titan bank hyphen IRA LLC. That’s if you wanted to do a check book IRA LLC, take you straight to that application to a regular bank account. Yeah, directed ira.com forward slash solo a or Titan bank dash solo K and that’ll take you to the solo K checking account. Maybe we can throw that up one more

Mat Sorensen
slide trust and one last time. So remember this is going to be recorded we’ll be providing these slides as well that will get up on the site in a couple of days. If you are registered, you’ll get a reminder on it. Make sure you’re also sign up for the newsletter, you can get it directed ira.com you’ll get updates on upcoming webinars everything going on here. We’re always sharing great video and content our podcast episode, Mark J. Kohler just walked in the room here we’re throwing his videos in there the good ones

Aaron Halderman
come on

Mark Kohler
your throwin, your throwin in the real videos.

Mat Sorensen
Yeah, we throw some real good stuff every once in a while you know every once a while we throw those in. But we are trying to get lots of great content out to you to help you keep educated and you know up to speed on what’s going on. We want to thank tight Titan bank and Jonathan for being on today. We really appreciate you we know you’re busy. We appreciate your efforts for self directed investors in particular and creating banking products around for them. It’s really important for me and for our customers for the whole industry really, so. But while all

Aaron Halderman
your thoughts today, we appreciate you webinar 150 Take advantage of that. We know money can be tight for everybody. We’re all filling it. So get 150 bucks off a directed IRA. Jonathan, any last words of parting words of wisdom you want to bequeath to all of our listeners? Well use that.

Jonathan Morris
I appreciate all the great questions that people had today. You guys do a great service to your your customers by educating them and putting out incredible content out there. And if anybody has any questions, you can always look me up on LinkedIn and sent that question to me there at Jonathan Morris at Titan bank or just J Morris at Titan bank.com and send me an email and I’m more than happy to get back with you directly.

Aaron Halderman
I don’t know how many backing CEOs emails get passed around so you just got it got it dropped on the directed IRA website.

As far as special client you go, Jonathan, you don’t always drop you gotta eat don’t

Jonathan Morris
always give it but you know, we were we’ve been so busy with new customers coming in this week with everything going on. I’ve been doing customer service calls myself just just it’s it’s it’s crazy. People are people are looking for solutions right now. Quickly.

Mat Sorensen
Yeah.

Aaron Halderman
Well, thank you so much.

Appreciate it. Thanks, everyone for being on stay calm. Self Direct on.