Tech & Biz

FDIC looks to increase deposit insurance limit to $250,000

by Tina Kells | September 30, 2008 at 02:56 pm | 614 views | 2 comments | 2 recommendations

The FDIC is hoping to increase the federal deposit insurance limit from a maximum of $100,000, to $250,000, in an effort to encourage Americans to keep their money in the bank.

The United States is in the midst of the worst economic crisis since the Great Depression. The House Financial Services Committee has served lawmakers with notice that a federal bank regulator will petition to increase the FDIC insurance limits.

It is hoped that an increase in the bank deposit insurance limits will restore consumer confidence in the banking system, and offer reassurance that cash deposits will not just disappear like they did during the Great Depression.

The move to increase FDIC insurance limits comes on the heels of Monday's defeated attempt to pass a bank bailout package. Some political observers speculate that the proposed increase to FDIC limits is not an attempt to restore confidence in the banks, but to rally popular support for a government backed bailout.

Representative Barney Frank, a Massachusetts Democrat, has told lawmakers of his committee that Sheila Bair, chairman of the Federal Deposit Insurance Corporation, will soon request the authority to boost the level of insured deposits, the source said.

Presidential nominees Barack Obama and John McCain both proposed an increase in federal deposit insurance to $250,000 from $100,000 as a way to broaden support for the bank asset bailout bill rejected on Monday by the U.S. House of Representatives.

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moonwolf

flagged this story as Good Stuff

at 15:39 on September 30th, 2008

That would be a good trick if the FDIC could get the dough to cover those kinds of deposits. It's a pipe dream! What most people don't know is that the FDIC doesn't have enough real money to cover even a small amount of deposits now in US banks. If there was even a minor run on the banks by consumers tomorrow the FDIC would tank before it even got started!

NickV (not verified)

at 18:07 on September 30th, 2008

Obama, How does an increase on the FDIC cap (from 100k to 250k) help main street? Last time I checked, main street does not have 100k+ sitting around in a checking account.

Are you trying to help your friends, again, who so generously gave to your campaign?
http://www.youtube.com/watch?v=kYdsU8996zo

Do us a favor and quit acting like you care for the middle class.