Dedicated to Deposits: Deals, Data, and Discussion

FDIC News, Resources and History


The FDIC has updated their Electronic Deposit Insurance Estimator (EDIE). It's easier to use than before. The Estimator is designed to help you determine if you have deposits over the insured limits at a bank. The Estimator page also has links to tutorials and documentation.

It's important to note the disclaimer at the bottom of EDIE:
the results and conclusions generated by EDIE are strictly advisory. All actual claims for deposit insurance shall be governed exclusively by information set forth in the FDIC-insured institution's records and applicable federal statutes and regulations then in effect.

So there is still the issue of whether the bank is meeting the FDIC requirements such as placing POD or ITF in the account title (see post).

With all the news of financial turmoil, it's important to remember the FDIC's history. Here are excerpts from a recent FDIC consumer article:
First, the FDIC's guarantee - that we will protect against the loss of insured deposits if an FDIC-insured bank or savings associations fails - is ironclad. Since the creation of the FDIC 75 years ago, we have handled the failure of more than 2,200 insured depository institutions and "no one has ever lost so much as a penny of FDIC-insured deposits - not a single penny,"
...
Depositors at a failed bank also get quick access to their insured funds — usually by the next business day after the institution closes
...
The bottom line is that bank customers who keep all of their deposits within the federal insurance limits can rest assured with the knowledge that their deposits - principal and interest - are 100 percent safe.

So far this year we've had 11 banks failures (FDIC's Failed Bank List). It's likely we'll see more, but this is still very small compared to the 80's and 90's during the S&L Crisis. Here's an excerpt from a FDIC article on this period:
Between 1980 and 1994 more than 1,600 banks insured by the Federal Deposit Insurance Corporation (FDIC) were closed or received FDIC financial assistance far more than in any other period since the advent of federal deposit insurance in the 1930s

You can also see how bad it was during the S&L Crisis from this FDIC table showing yearly statistics since 1990. In 1990 there were almost 1,500 problem institutions. The current number this year is 117.

There have been many worries about the size of the current FDIC deposit insurance fund and the potential impact of large bank failures. This AP article describes what may happen:
If the FDIC doesn't have enough cash to cover the initial costs of a bank failure, one option would be short-term loans from the Treasury. That last happened in 1991-92, during the last part of the savings and loan crisis, when the FDIC borrowed $15.1 billion from the Treasury and repaid it with interest about a year later.

If it gets as bad as the S&L Crisis, it may cost the US government and taxpayers. That adds to the deficit and inflation. So there are long-term issues of bailouts, moral hazards and deficits. But for the availability of my insured deposits, I'm not worried.

Below are some of my FDIC related posts:


Related Posts

Comments
2 Comments.
Comment #1 by Blogger (anonymous) posted on
Blogger
Recent posts in this forum raised the specter that banks may not be listing beneficiaries so as to be consistent with FDIC requirements.

At WAMU I discovered that the Assistant Manager was unaware that only specified beneficiaries count towards the FDIC requirements.

I asked for and received a printout listing beneficiaries for an account that I had recently opened. The printout was reassuring as all beneficiaries were properly posted and consistent with FDIC requirements.

Nonetheless, I do have a question. What happens if a bank fails and there are deposited amounts in excess of the basic insured amounts? Will the FDIC pay on the first 100,000 or 200,000 (joint) and then look into dependent listings? Will there be a longer wait for those who have exceeded the basic amounts but are covered by virtue of dependents?

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Yes, there is likely to be delayed access to the funds over $100K. Readers have experienced this when IndyMac failed. I described this near the bottom of this post.

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