Sure. But if that happens, we have larger problems than insured deposits. Which means even if you get your funds out in time, they’re worthless in your hands. It sure as heck can happen. But if you are looking at a single bank failing, albeit a large one, you don’t lose the bill-paying money in the checking account.
I had my accounts at an S & L back in the ‘80’s. I’ve seen it happen. In fact, BoA was the bank that bought out my S & L. My checking account paid my rent and electricity checks. Loans were expected to be paid on time. It was seamless.
That’s what I’ve been saying here. Some don’t understand that FDIC “insurance” isn’t just some fund and when its out its out. It is “deposits are backed by the full faith and credit of the United States Government” so if it fails, the US government has gone into default and at that point your dollars are screwed whether they’re in a bank, a credit union or under the mattress.