FDIC Fund Failing Because Banks Didn’t Pay Premiums
Today’s major outrage: Apparently the banks we’ve been paying trillions to bailout didn’t pay their FDIC insurance premiums for 10 years.Nice, eh? And Congress didn’t do a damn thing.
Here is what Boston.com reports about the situation:
The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts.
Now with 25 banks having failed last year, 17 so far this year, and many more expected in the coming months, the FDIC has proposed large new premiums for banks at the very time when many can least afford to pay. The agency collected $3 billion in the fees last year and has proposed collecting up to $27 billion this year, prompting an outcry from some banks that say it will force them to raise consumer fees and curtail lending.
This is something to be outraged over. Politicians in both parties have been in bed with the financial system for waaaaaaay too long. The government’s complicity with the financial and banking industry is one of the reasons we’re in this mess in the first place, it what compounded the problem and is what is indebting us, our children and our grandchildren. Obviously, there have been some gross errors.
Besides, these banks have a lot of gall: Complaining about restrictions on taxpayer bailout funds! It’s OUR money. We already might lose OUR savings, and OUR taxpayer dollars are going to bailout the guys losing OUR savings. This is a really backwards situation we’re in right now. I’m not sure we should be rushing in to save some of these guys. What I am sure of: Moving everything I’ve got to my local credit union is looking better by the day.
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- Uh, They Weren’t Paying Those Premiums? (eschatonblog.com)
- FDIC’s “Problem Bank” List Grows to 252 (hsh.com)
- F.D.I.C. Set to Raise Fees to Replenish Bank Fund (nytimes.com)
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March 12th, 2009 at 12:37 pm
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March 12th, 2009 at 5:10 pm
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