I stated on another thread that the FDIC was insolvent. Proof:
http://money.cnn.com/2009/10/14/news/companies/fdic_deposit_fund/?postversion=2009101415
I wonder if this will put a halt to Barney Frank’s proposed CRA expansion? LOL. How silly of me!
They are trying there hardest to bankrupt this country.
I don’t think you can really fault the FDIC on this, it’s purely Washington’s doing. And that would be under both parties (I’m pretty sure the coverage change had broad support so you can’t blame either party) under the Bush administration. The immediate change of protecting deposits up to $250,000 from $100,000 would have caused an excessive draw on the FDIC funds. As well, the premiums they’ve received over the past few years would have been based on $100K coverage, not $250K.
My recommendation would be to have them borrow directly from Washington, it was their policy decision, let them sort it out.
No one here is blaming the FDIC. Even if the coverage was halved, that’s still only a factor of 2 less that the FDIC owes. CRA commitments climbed in an ‘L’ shaped curve starting in the 90s. On top of that, subprimes were issued to people who had no intention of repaying them. This led to massive bank failures.
The policies of the past 8 years had bipartisan support.