FDIC explained? Maximum possible FDIC for a couple per bank

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longview
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FDIC explained? Maximum possible FDIC for a couple per bank

Post by longview » Thu Aug 29, 2013 10:21 am

I'm looking for a specific, clear explanation of the maximum FDIC insured amount for a given bank. From what I've read you have 250k for him, then you could have 250k for her, then another 500k for a joint account -- so now you are at 1 mil. Then another for a trust? And then there were some examples I've seen that I didn't quite understand.

So, is it 1 million per bank for a couple who wants to have 3 different accounts? That 1 million FDIC would also apply to CDs, given the ownership is specified as outlined above? Is there a way to have more per bank?

Thanks.
(To color my comments: my situation is ER trying to make a large portfolio that is 99% taxable last 45 years)

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by petercooperjr » Thu Aug 29, 2013 11:15 am

You could try some scenarios at the FDIC site and see if that helps answer your questions: https://www.fdic.gov/edie/index.html

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by dm200 » Thu Aug 29, 2013 11:27 am

longview wrote:I'm looking for a specific, clear explanation of the maximum FDIC insured amount for a given bank. From what I've read you have 250k for him, then you could have 250k for her, then another 500k for a joint account -- so now you are at 1 mil. Then another for a trust? And then there were some examples I've seen that I didn't quite understand.

So, is it 1 million per bank for a couple who wants to have 3 different accounts? That 1 million FDIC would also apply to CDs, given the ownership is specified as outlined above? Is there a way to have more per bank?

Thanks.
As another recommended, use the calculator. The rules for NCUA Insured credit unions are the same.

For a given bank or credit union, the important aspect is ownership/titling of the account(s), not the number of accounts held at the bank or credit union.

Note also that IRAs at that bank or credit union have a separate $250,000 coverage/limit.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by longview » Thu Aug 29, 2013 1:32 pm

petercooperjr wrote:You could try some scenarios at the FDIC site and see if that helps answer your questions: https://www.fdic.gov/edie/index.html
Filling out the forms it looks like my example is correct. But the site doesn't have CDs as an "account type" -- so it just answers the question for "interest bearing" accounts.
(To color my comments: my situation is ER trying to make a large portfolio that is 99% taxable last 45 years)

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by The Wizard » Thu Aug 29, 2013 2:04 pm

An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by technovelist » Thu Aug 29, 2013 4:20 pm

The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
Treasury bills or the equivalent in their country.
In theory, theory and practice are identical. In practice, they often differ.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by Kevin M » Thu Aug 29, 2013 5:50 pm

longview wrote: But the site doesn't have CDs as an "account type" -- so it just answers the question for "interest bearing" accounts.
See FDIC: Deposit Insurance Summary:
FDIC insurance covers all deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit.
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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by Kevin M » Thu Aug 29, 2013 5:56 pm

The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
Not sure the rates are any good, but one solution is CDARS: CDARS - The Certificate of Deposit Account Registry Service

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by sperry8 » Thu Aug 29, 2013 6:44 pm

The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
They dont hold $100 million in cash. They may hold a few million. And they probably do have 4-5 banks - and spread it around, across countries as well.
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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by longview » Thu Aug 29, 2013 9:31 pm

sperry8 wrote:
The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
They dont hold $100 million in cash. They may hold a few million. And they probably do have 4-5 banks - and spread it around, across countries as well.
It's amazingly hard to move money to banks in other countries these days. Apparently it's not so tough for companies. I wanna be a company when I grow up. 8-)
(To color my comments: my situation is ER trying to make a large portfolio that is 99% taxable last 45 years)

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by dm200 » Sat Aug 31, 2013 11:00 am

sperry8 wrote:
The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
They dont hold $100 million in cash. They may hold a few million. And they probably do have 4-5 banks - and spread it around, across countries as well.
With that amount, maybe such folks would OWN a bank! :moneybag :dollar :moneybag :beer

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by Cyclone » Sat Aug 31, 2013 11:57 am

Large depositors (such as a state or county) have the bank pledge collateral such as a Treasury bill against their deposit. I don't know if banks would do that for individuals.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by donall » Sat Aug 31, 2013 12:37 pm

Perhaps one can increase the number of beneficiaries on a joint account. Let's say two at 45% and ten at 1%. That would be $250,000 X 14 or $3.5 million.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by LadyGeek » Sat Aug 31, 2013 1:05 pm

Kevin M wrote:
The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
Not sure the rates are any good, but one solution is CDARS: CDARS - The Certificate of Deposit Account Registry Service
Kevin
Be sure you understand the early withdrawal penalties, they're quite steep and you can lose principal. See: Submission of Orders and Product Terms
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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by Kevin M » Sat Aug 31, 2013 1:39 pm

LadyGeek wrote:
Kevin M wrote:
The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
Not sure the rates are any good, but one solution is CDARS: CDARS - The Certificate of Deposit Account Registry Service
Kevin
Be sure you understand the early withdrawal penalties, they're quite steep and you can lose principal. See: Submission of Orders and Product Terms
Yeah, those are pretty steep EWPs. Unfortunately, my portfolio is not large enough that I have to worry about it :wink: I guess for very wealthy investors these could still make sense if the rates are enough higher than treasuries of comparable terms.

An EWP that eats into principal is the norm for early withdrawals that are done in a period less than the EWP term (e.g., in the first year for an EWP of 365 days of interest). I believe of all my CDs the only exception is PenFed. Unfortunately PenFed CD rates are no longer competitive.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by sperry8 » Sun Sep 01, 2013 5:12 am

longview wrote:
sperry8 wrote:
The Wizard wrote:An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
They dont hold $100 million in cash. They may hold a few million. And they probably do have 4-5 banks - and spread it around, across countries as well.
It's amazingly hard to move money to banks in other countries these days. Apparently it's not so tough for companies. I wanna be a company when I grow up. 8-)
I read this sort of comment on Bogleheads all the time and it's simply not true. I hold accounts in banks in multiple countries at the moment and all were opened in the past 5 years. They require minimum investments to open (usually the equivalent of $100-$150,000 per bank), but if you have substantive assets that's not a problem. Sadly, foreign banks do not have much in the way of FDIC insurance - at least not most of the one's I'm in. So if the primary reason to open foreign accounts is because you're seeking FDIC protection abroad you're unlikely to find it. My primary reason is currency diversification. However re risk, I go under the too big to fail theory in these countries. The banks I'm with are generally the largest of the large (top 1-3 in each country). There are also more banks who would take my money - but I have steered clear of countries where I believe their currency could prove too volatile (i.e., emerging economies) or where the bank was too small and it could prove a liability in the next great recession (i.e., going out of business).
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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by jon-nyc » Sun Sep 01, 2013 6:08 am

longview wrote:I'm looking for a specific, clear explanation of the maximum FDIC insured amount for a given bank. From what I've read you have 250k for him, then you could have 250k for her, then another 500k for a joint account -- so now you are at 1 mil.
I could be wrong, but I beIieve that isn't true. I think each name can go up to 250k, thus you could have 500k in a joint account or 250 each in single name accounts or some mix such as 200k joint and 150k each in single name accounts, etc.

Again, I could be wrong, but I researched this a few years back and came to that understanding.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by dm200 » Sun Sep 01, 2013 8:47 am

jon-nyc wrote:
longview wrote:I'm looking for a specific, clear explanation of the maximum FDIC insured amount for a given bank. From what I've read you have 250k for him, then you could have 250k for her, then another 500k for a joint account -- so now you are at 1 mil.
I could be wrong, but I beIieve that isn't true. I think each name can go up to 250k, thus you could have 500k in a joint account or 250 each in single name accounts or some mix such as 200k joint and 150k each in single name accounts, etc.

Again, I could be wrong, but I researched this a few years back and came to that understanding.
As I understand the original post, that is correct, and you are wrong..

For BOTH FDIC Insured banks and NCUA Insured Credit Unions, joint accounts have separate limits than individual accounts. Example:

Fred and Ethel have $1 Million and want is all federally insured and want all the money in the Neighborhood Friendly Federal Credit Union (insured by NCUA).

Fred: Individual Account with $250,000
Ethel: Individual Account with $250,000
Fred AND Ethel: Joint Account with $500,000

ALL $1,000,000 is federally insured and backed by the full faith and credit of the US Government.

Both the FDIC and NCUA web sites have calculators that will demonstrate that this is correct.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by LadyGeek » Sun Sep 01, 2013 9:57 am

dm200 wrote:Both the FDIC and NCUA web sites have calculators that will demonstrate that this is correct.
The links are in the wiki: Tools and Calculators (Insurance)
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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by Kevin M » Sun Sep 01, 2013 3:42 pm

See FDIC: Your Insured Deposits (ownership categories). Joint and single accounts are different ownership categories, and thus each gets it's own coverage.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by sperry8 » Mon Sep 02, 2013 2:39 am

dm200 wrote:
jon-nyc wrote:
longview wrote:I'm looking for a specific, clear explanation of the maximum FDIC insured amount for a given bank. From what I've read you have 250k for him, then you could have 250k for her, then another 500k for a joint account -- so now you are at 1 mil.
I could be wrong, but I beIieve that isn't true. I think each name can go up to 250k, thus you could have 500k in a joint account or 250 each in single name accounts or some mix such as 200k joint and 150k each in single name accounts, etc.

Again, I could be wrong, but I researched this a few years back and came to that understanding.
As I understand the original post, that is correct, and you are wrong..

For BOTH FDIC Insured banks and NCUA Insured Credit Unions, joint accounts have separate limits than individual accounts. Example:

Fred and Ethel have $1 Million and want is all federally insured and want all the money in the Neighborhood Friendly Federal Credit Union (insured by NCUA).

Fred: Individual Account with $250,000
Ethel: Individual Account with $250,000
Fred AND Ethel: Joint Account with $500,000

ALL $1,000,000 is federally insured and backed by the full faith and credit of the US Government.

Both the FDIC and NCUA web sites have calculators that will demonstrate that this is correct.
Also, I believe an individual account with POD (payable on death) beneficiaries can have more than $250k.

Ethel: Individual Account with 2 named POD beneficiaries $500,000 FDIC Insurance
Fred: Individual Account with 2 named POD beneficiaries $500,000 FDIC Insurance

And the beneficiaries can be the same (they could both list their 2 children as POD beneficiaries). But be careful, if one of the POD's dies, the FDIC insurance is instantly reverted to $250,000.
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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by Carls » Tue Dec 19, 2017 5:54 pm

Thanks for the clarifications. The FDIC site is a bit obtuse... (calculator is neat, tho).

However a small point. The FDIC is a private organization. It was created but is not run as a federal agency. It is most certainly not "federally insured and backed by the full faith and credit of the US Government". Not that anyone wants to test this... But this is what "to big to fail" was about, in part.

PS Love the folks who are pondering the multi-million bank deposits...

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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by dm200 » Tue Dec 19, 2017 6:06 pm

Carls wrote:
Tue Dec 19, 2017 5:54 pm
Thanks for the clarifications. The FDIC site is a bit obtuse... (calculator is neat, tho).

However a small point. The FDIC is a private organization. It was created but is not run as a federal agency. It is most certainly not "federally insured and backed by the full faith and credit of the US Government". Not that anyone wants to test this... But this is what "to big to fail" was about, in part.

PS Love the folks who are pondering the multi-million bank deposits...
I suggest that your "conspiracy theory" is off limits here. The FDIC and NCUA are, in fact, "federal government" agencies.

NCUA and FDIC have the same rules/limits. For non-retirement accounts -

John (husband) - individual $250k limit
Mary (wife) - individual $250k limit
John & Mary (joint) - $500 k limit

Total $1 Million limit

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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by Carls » Tue Dec 19, 2017 8:40 pm

Oops. I see that we agree on the allocations and FDIC protection coverage that you summarize. One million for a family as you describe.

But we may disagree on how the FDIC should be classified as private or public. The budget and operational funds for the FDIC are not public funds. Most federal agencies get their budget from tax revenues - but this isn't the case for the FDIC. Their operating budget is from fees they charge member banks for their insurance coverage. I think that no taxpayer's money is involved now nor is such a tax contemplated or provided for even in case of massive bank failures. (No citation for this but I read that the FDIC in recovering from the 2008-09 failures has raised its fees to all banks from one to three years advance payment (in cash <g>).

So they are an unusual federal agency, but I'd like to hear your side. I'm sorry my off-handed description seemed like a "conspiracy theory" - sounds interesting however, if you'd explain. Otherwise it's a rather snarky comment and a bit annoying.

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Re: FDIC explained? Maximum possible FDIC for a couple per

Post by MikeG62 » Tue Dec 19, 2017 8:41 pm

The Wizard wrote:
Thu Aug 29, 2013 2:04 pm
An even better question is: what do people with over $100 million in assets do as regards "cash"?
I'm pretty sure they don't keep it spread among 20 different banks.
Maybe there's something to be LEARNED from examining this scenario...
My boss had a high 8 figure portfolio and used Merrill as an investment advisor. They had a program where cash was spread among many large banks to allow FDIC coverage well in excess of $1M limit (I seem to recall they may have worked with some 20 or 25 banks, but don’t hold me to it). I think Fidelity and Vanguard can do the same thing (although most of us on this forum who use them aren’t sitting on 7 figures of uninvested cash for very long periods of time).

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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by dm200 » Wed Dec 20, 2017 11:14 am

Carls wrote:
Tue Dec 19, 2017 8:40 pm
Oops. I see that we agree on the allocations and FDIC protection coverage that you summarize. One million for a family as you describe.
But we may disagree on how the FDIC should be classified as private or public. The budget and operational funds for the FDIC are not public funds. Most federal agencies get their budget from tax revenues - but this isn't the case for the FDIC. Their operating budget is from fees they charge member banks for their insurance coverage. I think that no taxpayer's money is involved now nor is such a tax contemplated or provided for even in case of massive bank failures. (No citation for this but I read that the FDIC in recovering from the 2008-09 failures has raised its fees to all banks from one to three years advance payment (in cash <g>).
So they are an unusual federal agency, but I'd like to hear your side. I'm sorry my off-handed description seemed like a "conspiracy theory" - sounds interesting however, if you'd explain. Otherwise it's a rather snarky comment and a bit annoying.
In my opinion, public funds are not a requirement for an entity to be an agency of the federal government.

NCUA and FDIC are agencies of the federal government because federal statutes say they are. Likewise, insured funds by both agencies are backed by the full faith and credit of the US Government - for the same reason.

While they have very similar characteristics as agencies of the federal government, NCUA and FDIC insurance funds have quite different funding mechanisms for assessing and collecting from the insured financial institutions.

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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by ChrisC » Wed Dec 20, 2017 1:16 pm

dm200 wrote:
Wed Dec 20, 2017 11:14 am
Carls wrote:
Tue Dec 19, 2017 8:40 pm
Oops. I see that we agree on the allocations and FDIC protection coverage that you summarize. One million for a family as you describe.
But we may disagree on how the FDIC should be classified as private or public. The budget and operational funds for the FDIC are not public funds. Most federal agencies get their budget from tax revenues - but this isn't the case for the FDIC. Their operating budget is from fees they charge member banks for their insurance coverage. I think that no taxpayer's money is involved now nor is such a tax contemplated or provided for even in case of massive bank failures. (No citation for this but I read that the FDIC in recovering from the 2008-09 failures has raised its fees to all banks from one to three years advance payment (in cash <g>).
So they are an unusual federal agency, but I'd like to hear your side. I'm sorry my off-handed description seemed like a "conspiracy theory" - sounds interesting however, if you'd explain. Otherwise it's a rather snarky comment and a bit annoying.
In my opinion, public funds are not a requirement for an entity to be an agency of the federal government.

NCUA and FDIC are agencies of the federal government because federal statutes say they are. Likewise, insured funds by both agencies are backed by the full faith and credit of the US Government - for the same reason.

While they have very similar characteristics as agencies of the federal government, NCUA and FDIC insurance funds have quite different funding mechanisms for assessing and collecting from the insured financial institutions.
I agree. The source of funding is not a controlling factor of whether an entity is a federal agency -- a common misconception even for those who've worked in the Government. And off-budget or "nonappropriated outlay funding" for agencies that occurs for Federal banking agencies like the FDIC or the Federal Reserve Board and some Federal financial regulatory agencies like the SEC has nothing to do with whether an entity is a Federal agency. Moreover, once funding source revenues, whether by assessments against an industy (like deposit insurance premiums charged against banks by the FDIC), corporate filing fees charged by the SEC, or user fees charged by Federal governmental entities (varying from the United States Postal Service to National Parks to Regional Electric Authorities) are deposited in the Agencies accounts -- these funds become public funds subject to budget and appropriation control of the Congress. Thus, for example the FDIC's Inspector General's budget is "approrpriated" annually by Congress from the assessments. The idea that it's not so-called taxpayer funding is quite frankly a ruse.

Many of the Federal banking agencies like to proclaim that they receive no taxpayer funding because they don't receive annual appropriation outlays where the source of these outlays might be "taxpayer revenues" from IRS collections. This distancing from "taxpayer" support is designed to buttress their structure as "independent" regulatory agencies and that they are not under, in their view, the political control of Congress or the Executive Branch (you see how this is working now for the CFPB under this Administration). But the taxpayer supports their operations indirectly in so many other ways, including, for example, backing the FDIC deposit insurance by the Full Faith & Credit of the United States, treating all of their employees as Federal employees with corresponding Federal benefits that are funded by appropriations and by providing the FDIC with access to Treasury borrowings in case of major systemic emergencies.

One cannot tell whether entities created by Federal legislation who have or don't have taxpayer funding are Federal agenices without examining whether the legislation has declared them to be Federal agencies. If taxpayer funding were the controlling factor, Fannie Mae and Freddie Mac, Howard University, the American Printing House for Blind, Amtrak and perhaps even the American Red Cross -- all of which have been chartered , by Acts of Congress, like the FDIC and whose operations have in the past been substantially supported by taxpayer funding -- they would all be Federal agencies, when in fact, they are not and Congress has not made them such.

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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by dual » Wed Dec 20, 2017 1:23 pm

Not the topic of this post but it is worth keeping in mind:
from the FDIC website:
https://www.fdic.gov/regulations/laws/r ... -2660.html
Full Faith and Credit of U.S. Government Behind the FDIC Deposit Insurance Fund

FDIC-87-36

November 9, 1987

Alan J. Kaplan, Counsel

Your October 7, 1987 letter asks whether the full faith and credit of the United States Government stands behind the Federal Deposit Insurance Corporation and its deposit insurance fund. You noted that in my earlier letter to you, dated August 26, 1985, I stated that a joint resolution of Congress (H.R. Con. Res. 290) adopted in March 1982, which reaffirmed that the United States pledges its full faith and credit behind the federal deposit insurance funds, may have served as a moral pledge on the part of Congress to support the deposit insurance funds should they ever need it, but, because of its status as a non-binding resolution, did not serve to create any legal liability on the part of the United States Government to support the funds. You now ask whether Congress has passed a statute that makes the United States Government legally liable for any and all obligations of the FDIC.

Title IX of the Competitive Equality Banking Act of 1987 ("CEBA"), signed into law by President Reagan on August 10, 1987, provides:

TITLE IX–FULL FAITH AND CREDIT OF
FEDERALLY INSURED DEPOSITORY INSTITUTIONS

SEC. 901. REAFFIRMATION OF SECURITY OF FUNDS DEPOSITED
IN FEDERALLY INSURED DEPOSITORY INSTITUTIONS.

(a) FINDINGS.--The Congress finds and declares that--

(1) since the 1930's, the American people have relied upon Federal Deposit insurance to ensure the safety and security of their funds in federally insured depository institutions; and

(2) the safety security [sic] of such funds is an essential element of the American financial system.

(b) SENSE OF CONGRESS.--In view of the findings and declarations contained in subsection (a), it is the sense of the Congress that it should reaffirm that deposits up to the statutorily prescribed amount in federally insured depository institutions are backed by the full faith and credit of the United States.

While any final conclusion on this matter rests with the Attorney General of the United States and ultimately with the courts, it is our opinion that Title IX of CEBA merely represents an expression of the intent of Congress to support the FDIC's deposit insurance fund should the need arise. Title IX does not change any existing underlying law. It does not amend the Federal Deposit Insurance Act, nor does it or any other provision of CEBA alter the method by which the FDIC is funded. The FDIC continues to receive no government appropriations, and its funding continues to consist entirely of its income obtained from insurance assessments and from the return on investments made in government securities. In addition, the FDIC's statutory authority to borrow up to $3.0 billion from the Treasury remains unchanged.
I don't lose sleep about the government not stepping in to bail out the FDIC but it is not guaranteed like Treasury securities are.

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Re: FDIC explained? Maximum possible FDIC for a couple per bank

Post by ChrisC » Wed Dec 20, 2017 2:03 pm

dual wrote:
Wed Dec 20, 2017 1:23 pm
Not the topic of this post but it is worth keeping in mind:
from the FDIC website:
https://www.fdic.gov/regulations/laws/r ... -2660.html
Full Faith and Credit of U.S. Government Behind the FDIC Deposit Insurance Fund

FDIC-87-36

November 9, 1987

Alan J. Kaplan, Counsel

Your October 7, 1987 letter asks whether the full faith and credit of the United States Government stands behind the Federal Deposit Insurance Corporation and its deposit insurance fund. You noted that in my earlier letter to you, dated August 26, 1985, I stated that a joint resolution of Congress (H.R. Con. Res. 290) adopted in March 1982, which reaffirmed that the United States pledges its full faith and credit behind the federal deposit insurance funds, may have served as a moral pledge on the part of Congress to support the deposit insurance funds should they ever need it, but, because of its status as a non-binding resolution, did not serve to create any legal liability on the part of the United States Government to support the funds. You now ask whether Congress has passed a statute that makes the United States Government legally liable for any and all obligations of the FDIC.

Title IX of the Competitive Equality Banking Act of 1987 ("CEBA"), signed into law by President Reagan on August 10, 1987, provides:

TITLE IX–FULL FAITH AND CREDIT OF
FEDERALLY INSURED DEPOSITORY INSTITUTIONS

SEC. 901. REAFFIRMATION OF SECURITY OF FUNDS DEPOSITED
IN FEDERALLY INSURED DEPOSITORY INSTITUTIONS.

(a) FINDINGS.--The Congress finds and declares that--

(1) since the 1930's, the American people have relied upon Federal Deposit insurance to ensure the safety and security of their funds in federally insured depository institutions; and

(2) the safety security [sic] of such funds is an essential element of the American financial system.

(b) SENSE OF CONGRESS.--In view of the findings and declarations contained in subsection (a), it is the sense of the Congress that it should reaffirm that deposits up to the statutorily prescribed amount in federally insured depository institutions are backed by the full faith and credit of the United States.

While any final conclusion on this matter rests with the Attorney General of the United States and ultimately with the courts, it is our opinion that Title IX of CEBA merely represents an expression of the intent of Congress to support the FDIC's deposit insurance fund should the need arise. Title IX does not change any existing underlying law. It does not amend the Federal Deposit Insurance Act, nor does it or any other provision of CEBA alter the method by which the FDIC is funded. The FDIC continues to receive no government appropriations, and its funding continues to consist entirely of its income obtained from insurance assessments and from the return on investments made in government securities. In addition, the FDIC's statutory authority to borrow up to $3.0 billion from the Treasury remains unchanged.
I don't lose sleep about the government not stepping in to bail out the FDIC but it is not guaranteed like Treasury securities are.
First of all, FDIC counsel is not the appropriate Government lawyer to opine on the Full Faith and Credit of the U.S. Secondly, that's an old opinion, I'm sure there are more recent FDIC counsel opinions like this one, rendered 3 years after the one you cite, and after the enactment of additional Federal legislation. https://www.fdic.gov/regulations/laws/r ... -5240.html. Thirdly, the appropriate legal counsel in the Federal Government for opining about Full Faith and Credit of the United States is in the U.S. Department of Justice, Office of Legal Counsel (OLC). I suggest you research opinions by OLC or by the Courts if you find this topic interesting.

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