Now-needy FDIC collected little in premiums... for a Decade

www.boston.com...

The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts.

Now with 25 banks having failed last year, 17 so far this year, and many more expected in the coming months, the FDIC has proposed large new premiums for banks at the very time when many can least afford to pay. The agency collected $3 billion in the fees last year and has proposed collecting up to $27 billion this year, prompting an outcry from some banks that say it will force them to raise consumer fees and curtail lending.

(visit the link for the full news article)

[edit on 29-3-2009 by grover]

Mod Edit: Corrected BB code tags.

[edit on 3/29/2009 by maria_stardust]

Oh Loverly.

For a decade the congress (mostly controlled by ideologically driven Republicans) refused to give them the authority to collect the premiums banks are supposed to pay anyway.

Thanks guys I really appreciate that.

Ya know what's gonna happen? If push comes to shove and the big banks fail those with the $250,000 limit; or should I say those with healthy, fat bank accounts will be taken care of first...

.... while the rest of us who live pay check to pay check or have smaller savings will get covered last... if at all.

Oh yes baby... screw me... a little harder... YES!!!

www.boston.com...

[edit on 29-3-2009 by grover]

Tell you what chaffs my mind..., we are going to print up or somehow further put ourselves in debt to give them all the money they need to cover there obligations, AND we're also going to pay those covered by the insurance as well, AND we're going to prop up the banks, AND we're going to buy toxic derivatives.

But if I'm one month late on my mortgage, I'm put in default.

Let's see, the corporate citizenship is somehow representative of EQUALITY between them and other citizens...., uh huh.

I wish they would declare themselves masters and be done with it. This charade of needing to fund the bank cartel's "trust" is really old and insulting.

Me personally I have a nice dry underpass picked out... Thank god I am getting my social security now.

Hey then add on

Goldman Sachs Profits $2.3 Billion Pays 1% in Taxes So these guys dont have to pay their taxes or their insurance......whew Im glad we peons dont have to pay our taxes or insurance...

Originally posted by mybigunit
Hey then add on

Goldman Sachs Profits $2.3 Billion Pays 1% in Taxes So these guys dont have to pay their taxes or their insurance......whew Im glad we peons dont have to pay our taxes or insurance...

What bites my oh so ample butt is that there are loons who will say... sniff... but they create jobs... sniff... those poor business people shouldn't have to pay taxes...

AND ALL THAT CRAP!!!

Originally posted by grover

Originally posted by mybigunit
Hey then add on

Goldman Sachs Profits $2.3 Billion Pays 1% in Taxes So these guys dont have to pay their taxes or their insurance......whew Im glad we peons dont have to pay our taxes or insurance...

What bites my oh so ample butt is that there are loons who will say... sniff... but they create jobs... sniff... those poor business people shouldn't have to pay taxes...

AND ALL THAT CRAP!!!

Yeah we need to give these guys trillions of taxpayer dollars, let them pay no taxes, no insurance, give them a no fail clause, all so they can lend us our money at interest.....wow if it wasnt so true it would be laughable....

I really am surprised that this thread isn't getting more traffic considering the potential implications...

Think about it... the FDIC... the watchdog that has kept our money safe for 75 years or so supposed to charge banks a premium to cover their accounts should the banks fail.

Now (and this is something that I did not know) apparently the FDIC needs congressional approval to collect those premium's and congress for the past decade (8 of of those 10 years was Republican controlled) didn't authorize the collection of those premiums because they didn't feel the FDIC needed to for a variety of reasons that included the fact that at the time banks weren't failing and the fund was awash with cash.

Now when you consider what just one large bank can cost if it collapses... that was incredibly shortsighted of them... especially considering that at the same time they were gutting the regulations that kept the banks in line in the first place and allowing things like credit default swaps... which had been illegal for a century after they helped bring down the economy in 07...

I mean perhaps its crisis fatigue but I find this simply outrageous.