FDIC's Consumer News: Reverse Mortgages, Power of Attorney and HSA

The FDIC just published its Summer 2013 Consumer News which provides advice on various banking topics. Most of the tips are probably well-known to those who are financially savvy. However, there are some useful reminders of federal regulations and protections. I've included a few excerpts that I found most useful.

For Seniors: 15 Quick Tips for Protecting Your Finances

One of the 15 tips that may not be well known relates to reverse mortgages. Thanks to DA member Pearlbrown who first posted on this in the forum.

8. Remember that a reverse mortgage will eventually have to be paid back — with interest. Reverse mortgages allow homeowners age 62 or older to borrow against the equity in their homes without having to make monthly payments as long as they meet the terms of their loan agreement, such as staying current on property taxes. However, the money borrowed plus interest must eventually be repaid, usually when you or your heirs sell the house.

“If you do get a reverse mortgage and you live in the home with your spouse, some experts suggest that both of you sign the reverse mortgage agreement to ensure that the surviving spouse can continue to live in the home if one dies before the other,” Reynolds added.

Another useful tip covers power of attorney (POA):

Prepare for the possibility that you may become unable to handle your finances. Consider writing down a list of your financial institutions and account numbers and keeping it in a safe place that would be accessible by your loved ones in an emergency. An attorney can help you decide if you should have a legal document known as a power of attorney (POA), which would allow one or more people you designate to make key decisions with as much or as little of your financial or personal life as you choose.

Note that a “durable” POA takes effect when you sign it and remains effective if you become incapacitated, while a “springing” POA generally becomes effective only if and when you have been declared incapacitated. (The laws governing POAs vary from state to state, so consider consulting with an attorney who is knowledgeable about such matters.)

Health Savings Accounts: One Way Some Consumers Can Prepare for Medical Bills

If you have an HSA at a bank, make sure you take into account its impact to your FDIC coverage. FDIC describes the details in this article:

As for your FDIC deposit insurance coverage, if you have not listed beneficiaries, your HSA is insured as a single account and, together with any other single accounts you own at the same bank, is eligible for up to $250,000 in coverage if the institution fails. An HSA that does name beneficiaries is insured together with any other "revocable trust accounts" (i.e., deposits with beneficiaries) for up to $250,000 per beneficiary.

If you have a problem with a financial institution

Before you submit a complaint about a bank, you first have to identify the bank’s primary regulator. Here’s what the FDIC recommends:

If you have a problem with a financial institution, first give it the chance to fix it. If your concerns are not addressed, consider contacting the institution’s government regulator. To find out who regulates an institution, you can call the FDIC at the toll-free number above [1-877-275-3342]

Other Topics

The FDIC summer consumer news also has some updates and reminders on things like scam artists, helping relatives, key FDIC facts, wire transfer scams, sending money abroad, adjustable-rate mortgages and student loans. If you find something interesting, please leave a comment.