The following is an excerpt from the March issue of Fusion Magazine.
It’s like money in the bank.
That’s always sounded quite comforting, especially if you actually have some in one. And as long as your bank’s window displays the trusty little Federal Deposit Insurance Corporation (FDIC) logo, your money is insured up to $100K. So you’re as good as gold, right?
With the current sub-prime mortgage crisis creating a record number of foreclosures nationwide, a looming recession, and not to mention a $9 trillion national deficit, just how would the FDIC make good on it’s guarantees now that large banks are finding themselves in trouble?
First off, it’s important to understand how the FDIC works and just how much it has in reserves. Most people figure it is just another taxpayer-funded program. But it receives no Congressional appropriations. It actually functions as a mandatory insurance policy for banks, which requires them to pay into its fund currently totaling more than $49 billion.
But in a sense, it’s the bank’s customers that are indirectly paying into the fund through their bank fees and service charges. Banks are certainly not paying for the fund at the expense of their profits . . .
Why does Glenn think that? Read more of “Is the FDIC doomed?” in this month’s issue of Fusion magazine. Subscribe Now.
Every month in Fusion magazine we deliver Glenn’s personal thoughts on issues ranging from controversial news topics to the latest pop-culture exploits. With 10 issues a year, Fusion is the only magazine where you can find the perfect combination of cutting edge humor, intelligent commentary and stories that touch the heart.