Old Glory Bank Will Take a $500,000 CD. The FDIC Insures Half of It, and Just Called the Bank 'Significantly Undercapitalized.'

If you bank with Old Glory Bank, your insured money is fine. Anything over $250,000 in one ownership category is not. And if you’ve got a CD there, the next renewal is the one to watch.

Old Glory will happily open a CD as large as $500,000. The FDIC insures half of that, and just put the bank in its second-worst capital category.

What the FDIC found

The FDIC published its August enforcement actions on September 25. One was a “supervisory prompt corrective action directive,” the order regulators use when a bank’s capital drops too far. Banking Dive identified the bank as Old Glory, the Oklahoma online bank co-founded by Ben Carson and Sean Spicer that markets itself as “pro-America” banking for the “Freedom Economy.”

The FDIC called it “significantly undercapitalized.” Its leverage ratio, capital measured against total assets, was 2.69% on June 30. It lost about $8 million in the first half of the year. A planned merger that was supposed to bring in capital collapsed in August. The bank’s spokesperson says it’s “raising capital from our great ownership group.”

Here’s what the branding doesn’t tell you. A mission statement doesn’t count toward a leverage ratio.

The directive orders a new capital restoration plan, bars brokered deposits, and tells the bank to “restrict the interest rate it pays on deposits.” Those limits stay until Old Glory is adequately capitalized “on average for four consecutive quarters.”

What it means for your money

Two numbers matter.

The first is $250,000. That’s the FDIC limit per depositor, per ownership category, at each bank. Old Glory’s own CD page says CDs are insured “in combination with your other accounts” there. Put $400,000 in a CD in your name alone and $150,000 of it is exposed.

The second is your renewal date. Federal law lets regulators hold an undercapitalized bank’s rates to “the prevailing rates” in its region. The same law says they can’t cut the rate on CDs opened before the action, unless they’re “renewed or renegotiated after.” Old Glory’s CDs pay 3.00% for 12 months and “automatically renew at maturity.” Roll over without looking and you could renew into whatever capped rate the bank is allowed to pay.

Then there’s the floor. Federal law sets “critically undercapitalized,” the bottom category, at no lower than 2% tangible equity to assets. Once a bank lands there, regulators get 90 days to appoint a receiver unless they document a better option. Old Glory isn’t there. It’s one rung up.

Verdict: staying insured is your call. Staying uninsured is dumb math.

Do this now

Add up everything you hold at Old Glory by ownership category: single, joint, retirement, trust. Plug it into the FDIC’s EDIE estimator. Move anything over the limit this week.

Mark your CD’s maturity date. You get 10 days after maturity to withdraw without a penalty. Use them. Compare the renewal rate against our best savings accounts and run the gap through our savings calculator.

If you stay under $250,000, you don’t need to do anything else. If a bank fails and another bank takes over its deposits, our piece on what happens to your CD then walks through it.

The detail

Prompt corrective action comes from 12 U.S.C. 1831o, which sets five capital categories. A directive differs from a consent order because the bank doesn’t sign it. Banking Dive reports Old Glory has operated under an FDIC consent order since May 2024 over capital, and didn’t answer regulators’ notice before this one was issued.

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