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post #1 of 23 (permalink) Old 03-04-2009, 08:51 AM Thread Starter
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FDIC could be insolvent this year

Goodnight everybody!

http://www.bloomberg.com/apps/news?p...d=alsJZqIFuN3k

FDIC’s Bair Says Insurance Fund Could Be Insolvent This Year

By Alison Vekshin

March 4 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said the deposit insurance fund could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

“Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group.

“A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter. “Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative.”

The FDIC last week approved a one-time “emergency” fee and other assessment increases on the industry to rebuild a fund to repay customers for deposits of as much as $250,000 when a bank fails. The fees, opposed by the industry, may generate $27 billion this year after the fund fell to $18.9 billion in the fourth quarter from $34.6 billion in the previous period, the FDIC said. The fund was drained by 25 bank failures last year.

Smaller banks are outraged over the one-time fee, which could wipe out 50 percent to 100 percent of a bank’s 2009 earnings, Camden Fine, president of the Independent Community Bankers of America, said yesterday in a telephone interview.

“I’ve never seen emotions like this,” said Fine, adding that he’s received more than 1,000 e-mails and telephone messages from angry bankers.

‘Significant Expense’

“The FDIC realizes that these assessments are a significant expense, particularly during a financial crisis and recession when bank earnings are under pressure,” Bair wrote. “We did not want to impose large assessments when the industry and economy are struggling. We searched for alternatives but found none better.”

The agency, which has released the change for 30 days of public comment, could modify the assessment to shift the burden to the large banks “that caused this train wreck,” Fine said. “Community bankers are feeling like they are paying for the incompetence and greed of Wall Street,” he said.

Bair dismissed that suggestion.

“For risk-based assessments, our statute restricts us from discriminating against an institution because of size,’’ Bair wrote.

Bair rejected arguments that the agency should use government aid to rebuild the fund. The FDIC has authority to tap a $30 billion line of credit at the Treasury Department.

“Banks, not taxpayers, are expected to fund the system,” Bair said. Asking for taxpayer support “could paint all banks with the ‘bailout’ brush.”

The FDIC “will revise the interim rule, if appropriate, in light of the comments received,” the agency said in a Federal Register notice
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post #2 of 23 (permalink) Old 03-04-2009, 08:57 AM
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Badass. That secret compartment I built into my box springs will come in handy now.

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post #3 of 23 (permalink) Old 03-04-2009, 08:58 AM
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Are there any institutions where I can safely place my money that I use to write checks?
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post #4 of 23 (permalink) Old 03-04-2009, 08:59 AM
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post #5 of 23 (permalink) Old 03-04-2009, 09:01 AM
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Stocked up on Mason jars and I just got a new shovel.
I knew the Masons were somehow involved with this.
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post #6 of 23 (permalink) Old 03-04-2009, 09:04 AM
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Fuck you and Forrest for screwing with me about keeping my change in a jar.

Obama said we'll get change... boy was he right.

Scary.
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post #7 of 23 (permalink) Old 03-04-2009, 09:08 AM
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Interesting you should post that, I just got done reading this:

http://abcnews.go.com/International/...ory?id=7003275
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post #8 of 23 (permalink) Old 03-04-2009, 09:09 AM
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The attachment is what the FDIC sent our CEO.
Attached Files
File Type: pdf CEO Letter 3-2-9.pdf (117.3 KB, 79 views)
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post #9 of 23 (permalink) Old 03-04-2009, 09:20 AM
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don't worry...obama will write them a check.
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post #10 of 23 (permalink) Old 03-04-2009, 09:37 AM
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Nice! Spread a little more fear and panic.

1/19/09, the last day of Free America.
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post #11 of 23 (permalink) Old 03-04-2009, 12:04 PM
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Interesting you should post that, I just got done reading this:

http://abcnews.go.com/International/...ory?id=7003275
Obama's doing what he can to help...

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post #12 of 23 (permalink) Old 03-04-2009, 12:09 PM
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Yeah, Obama really blew it over the last 8 years. Wish we could have elected him sooner!!

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post #13 of 23 (permalink) Old 03-04-2009, 12:11 PM
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Nice, increase the assessments on the banks and make more of them fail, thus requiring FDIC assistance.
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post #14 of 23 (permalink) Old 03-04-2009, 12:59 PM
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This might be a stupid question but what about credit unions ? Don't they have their own insurance program in place ?
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post #15 of 23 (permalink) Old 03-04-2009, 06:46 PM
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This might be a stupid question but what about credit unions ? Don't they have their own insurance program in place ?
Yes they do. My sister works for a CU and she claims it's a system just like FDIC, but its different.

TRAIN TRASH it's like WHITE TRASH but with money.

My other vehicle is a Locomotive.

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post #16 of 23 (permalink) Old 03-04-2009, 08:29 PM
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So wouldn't your money be in safer hands if deposited into a CU instead of a bank ? This assuming that the FDIC takes a shit .
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post #17 of 23 (permalink) Old 03-04-2009, 10:08 PM
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Yes they do. My sister works for a CU and she claims it's a system just like FDIC, but its different.

How in hell can it be just like it, but different?
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post #18 of 23 (permalink) Old 03-04-2009, 10:10 PM
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Yeah, Obama really blew it over the last 8 years. Wish we could have elected him sooner!!

You've only got 238 posts over 7 years because you've only been able to figure out how to get back here 238 times in 7 years, right?
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post #19 of 23 (permalink) Old 03-04-2009, 10:35 PM
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So wouldn't your money be in safer hands if deposited into a CU instead of a bank ? This assuming that the FDIC takes a shit .
<----- CU member for life. I actually belong to 3 different credit unions and I wouldn't worry about your average CU union going broke. Credit Unions refuse to do subprime loans to subprime borrowers.

TRAIN TRASH it's like WHITE TRASH but with money.

My other vehicle is a Locomotive.

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post #20 of 23 (permalink) Old 03-04-2009, 10:39 PM
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How in hell can it be just like it, but different?
Well for starters its called the NCUA and is funded by only credit unions so you don't have to worry about Citigroup or anyother bank sucking the tit dry. The NCUA also insures each individual account up to 250k just like the FDIC. For the most part its a mirror image of the FDIC just the credit union version.

TRAIN TRASH it's like WHITE TRASH but with money.

My other vehicle is a Locomotive.

Don't cupple up without protection.
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post #21 of 23 (permalink) Old 03-04-2009, 10:48 PM
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run on the banks anyone?

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post #22 of 23 (permalink) Old 03-05-2009, 08:03 AM
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run on the banks anyone?
Buy Gold the dollar will be worth shit when Obama is done!

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post #23 of 23 (permalink) Old 03-05-2009, 07:02 PM
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That's what I think too

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Buy Gold the dollar will be worth shit when Obama is done!

buying silver, I'm trying to work a deal here in town to get the pawn shop to sell silver bars and coins. I think there will be a run on banks shortly. The dollar won't be worth much when all this stuff is over.
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