FDIC and you bank account

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I read somewhere the Banks are FDIC insured but not your personal bank account. If the bank had a problem with its computer would you be able to access your money?

-- Tuan Cu Mhara (Stryder@aol.com), October 17, 1999


Personal bank accounts are insured.

For details on FDIC deposit insurance coverage and limits, check out the FDIC's website.

-- Nabi (nabi7@yahoo.com), October 17, 1999.

The FDIC insurance fund is divided up into two parts: the primary part is BIF (Bank Insurance Fund) for commercial banks; there is also SAIF (Savings Association Insurance Fund) for savings banks and thrifts. SAIF is the successor to the FSLIC insurance fund, which was swallowed up by the FDIC after the S&L crisis.

Currently, BIF only has about $30 billion in the fund to cover over $3,000 billion in domestic deposits. The FDIC insurance fund is designed to (1) instill confidence in the US banking system, and (2) cover depositor losses in ISOLATED cases of bank failure.

Should even a small number of medium or large banks fail at once, the FDIC fund would quickly be depleted. Then it would be up to the US government to step in and make good the deposits of insured bank customers (with taxpayer dollars, of course).

How many of you here are willing to place your faith in the US government in early 2000 to make good your "insured" deposits if numerous bank failures bankrupt the FDIC?

-- Nabi (nabi7@yahoo.com), October 17, 1999.

In the 80's I was a Credit Mgr for a Fortune 500 company. Our local area experienced some bank failures. Some of the customer accounts I dealt with had their money in these banks. They found out, the hard way, that it can take YEARS to get reimbursed by the FDIC. Some of these customers had to file bankruptcy long before their payments came in. How long could you last if YOUR money was tied up & inaccessable for years?? I keep hearing people say "but it's insured!". That's great, but it won't mean squat if you go under while waiting for your payment. Better read the fine print! Just a thought.... Carolyn

-- carolyn m (artchicks@yahoo.com), October 17, 1999.

* * * 19991017 Sunday


For the official FDIC process of account reconciliation, in the event of regulated financial institution failures, ONLY THE ELECTRONIC AND HARDCOPY RECORDS OF THE BANK AND/OR ACCOUNT PASSBOOK RECORDS ARE LEGALLY ACCEPTABLE DOCUMENTATION!

The official admonition for JQP to "keep copies of financial records" is pure, unadulterated Bull, capital-S, with-a-HIT. All other hardcopies and/or receipts ( including ATM transaction receipts!) held by alleged institution customers, do not constitute proof of anything substantive.

Regards, Bob Mangus

P.S.: This topic has been discussed in previous threads; I don't have recollection of the LINKS. However, you may find a more extensive thread in the TB2K archives.

* * *

-- Robert Mangus (rmangus1@yahoo.com), October 17, 1999.

If the currency collapses one new cent might pay off a thousand dollars of the old currency. Just imagine the national debt paid off in a night!

Currency has collapsed before in American history. Confederate dollars were an excellent source of emergency toilet paper.

-- Paula (chowbabe@pacbell.net), October 17, 1999.

There's little to add to the points already made by these fine people, but I guess the bottom line is: If your bank's computer records get hosed, you may well be hosed, too. (So, do you feel lucky today? Well, do ya?)

-- I'm Here, I'm There (I'm Everywhere@so.beware), October 17, 1999.

This is from the WASHINGTON POST (July 28).

* * * * * * * * * * * *

Federal Reserve Chairman Alan Greenspan warned yesterday that banks will be the safest place for people to stash their cash at the end of the year, despite popular worries that a computer bug could cause problems for the nation's financial system.

"I think you will have a far greater chance of losing your money if you take it out than if you leave it in," Greenspan told the Senate Banking Committee. He implied that the risk of deposits being electronically wiped out by a computer glitch is less than the danger of being robbed of money withdrawn because of such fears.

"The most risky activity that people can take is to take all the currency out of their banks" because that will only spawn a new industry--"millennium thievery," Greenspan said, drawing laughter from lawmakers.

Greenspan also said people's financial worries about potential New Year's computer problems are far greater than the likelihood of the problems occurring. "I see that the concerns that a lot of people have about what is going to happen to their banks . . . [are] far more adverse than [what] I think even remotely is going to be the case," he said. . . .

Citing Y2K concerns, the May issue of Consumer Reports warned readers that it would be "prudent . . . to withdraw--and safely store--about two weeks' worth of cash, or to stock up on travelers' checks, a few weeks before Dec. 31." And a Gallup survey in March found that more than half the respondents said they probably or definitely would withdraw extra cash before the end of the year.

Fed and other bank officials say there should be no need for anyone to do that.

"I have a high degree of confidence that all normal banking services will be available," said Fed governor Edward M. Kelley Jr., who has been following Y2K preparations for the central bank.

"Take out no more than you would for any long weekend," advised William N. Dana, president of the Central Bank of Kansas City. . . .

"I seriously doubt we will get by the crossover to the millennium without any glitches, but if they occurs they will be isolated and short-lived," Kelley said. . . .

The Fed plans to have an additional $50 billion or more available. That way any of the financial institutions, which usually get cash deliveries once a week, can get a new supply within a day, Kelley said.

The planning is so detailed, Kelley said, that potential traffic congestion points have been taken into account to make sure no deliveries will be delayed. . . . ()()()()()()()()()()()()()()()()()() ()()()()(()()(()()()()()()()()So there you have it,the Establishment says you'll be fine and DON'T TAKE YOUR MONEY OUT OF THE BANK!!!If you're the type of person who believes that the government/corporate establishment reports honestly it's status and only has THE PEOPLE'S interests in mind then by all means trust in the insurance establishment and leave your money. But if you think the corporate Establishment is generaly a dilbert like fiasco that rewards bureaucratic ineptitude and status quo mediocrity,then you can see that y2k has the potential to cause chaos and death of mythical proportions.You know to which paradigm you belong as well as you know that nobody will convince you the world is any differant just by telling you so.If you're a doomer,try to understand that some people really think that the world is really is just like a McDonald's commercial,and you scare them and cause extreme emotional defensiveness when you suggest they doubt their fanatical beliefs.For a Doomer it's troubling to see someone need to be duped to the point that they believe whatever their told by big business with an almost Ronald Reagan like naoveti. If you're a pollyanna,try to have some compassion,the doomers are terrified and cynicism prevents them from believing the great news of the amazingly great progress that all of everybody everywhere has made!Don't hate the doomers,next year when nothing happens the doomers will contribute huge amounts of stored food and hunger in america cured for a while!!

-- "ya know,Satan's really not that bad..... (The Devil's@dvoc.ate), October 17, 1999.

"The most risky activity that people can take is to take all the currency out of their banks" because that will only spawn a new industry--"millennium thievery," Greenspan said, drawing laughter from lawmakers.

***sigh*** Ah, Alan and those wacky wild-n-crazy politicians and bankers -- they're SUCH a bunch of cut-ups! (When it's not THEIR money, of course!)

-- I'm Here, I'm There (I'm Everywhere@so.beware), October 17, 1999.


here is a link to the "official public FDIC Y2K Checklist " (pdf)


here is a link to the official FDIC rules and regs page that has the fine print that explains that personal records are not accepted as "deposit account records" look at section (e)

http://www.fdic.gov/regulations/laws/rules/2000-15.html#2000 part 330.1

I spoke privately with a rep from the Chicago Fed who showed up at our local Y2K "town meeting".

He had no idea that this "exclusion" existed. We went back and forth a couple of times via email, and he said friends at the FDIC were unable to explain the apparent conflicting info.

but he still said it was a "good idea to keep good records".


-- plonk! (realaddress@hotmail.com), October 17, 1999.

FDIC is totally worthless during a situation like Y2K. Too many claims would bankrupt the FDIC in a heartbeat!

It only has value if a single bank goes bankrupt, but not when a million people lose their money in cyberspace!!!


-- FDIC is worthless (FDICis@worthless.com), October 17, 1999.

As I posted on another topic last night, I will again quote for those who want to take the chance with leaving ALL or MOST of their assets in a bank as electronic bits backed by nothing...

"You gotta ask yourself one question... do I feel lucky?"--DIRTY HARRY

Well, do ya?

-- profit_of_doom (doom@hellotpay.ca), October 17, 1999.

Here is what FDIC will accept as records of your account, quoted from their own rules and regs. (e) Deposit account records means account ledgers, signature cards, certificates of deposit, passbooks, corporate resolutions authorizing accounts in the possession of the insured depository institution and other books and records of the insured depository institution, including records maintained by computer, which relate to the insured depository institution's deposit taking function, but does not mean account statements, deposit slips, items deposited or cancelled checks.

-- Shivani Arjuna (SArjuna@aol.com), October 18, 1999.

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