Talk:Federal Deposit Insurance Corporation/Archive 1

Archive 1

SecurityFocus cite

On 01 Nov 2004, this article was cited in a SecurityFocus article on phishing. Securiger 06:50, 8 Nov 2004 (UTC)

PSFS

There is no mention in the article of the Philadelphia Savings Fund Society scandal. See: http://www.meritorpsfs.com/

1980s Savings and Loan crisis

"To consumers in 1990, bank failures were ancient history—something they had heard of in a boring school lesson on the Depression, or something seen in a flickery old black-and-white documentary." How can this be the case, when S&Ls were collapsing in the 80s as well as the 90s? I'm not sure what the original author intended here, but by 1990, bank failures were well known and well noticed.

Pbones 19:40, 18 December 2005 (UTC)

FDIC vs. FSLIC

Question from the main page: "How is the FSLIC different from the FDIC?"

Answer: The FSLIC was a predecessor institution, which collapsed in the late 1980s, that previously insured thrift institutions. Responsibility for both commercial bank and thrift deposit insurance now lies with the FDIC. —The preceding unsigned comment was added by Akendall (talk • contribs) 17:56, 10 January 2007 (UTC).

Inception

Call me crazy, but I don't understand this sentence, I would re-write but I have no clue what it is talking about - The total of all deposits in all million and million banks that suspended 1989-99 was $896.886 billion; losses to depositers were $1.336 billion or 19% Robert Beck 19:35, 10 May 2007 (UTC)

Logo and seal resize

I tried to resize but don't quite understand how the wikipedia code works so I couldn't do it. —Preceding unsigned comment added by Elsapo (talk • contribs) 18:20, 25 March 2008 (UTC)

This is an odd problem - it *looks* like it should be sized correctly, and until recently, it was. (Older versions of the page with the infobox are much too large now, though they were fine before. It's a display problem, not a vandalism or bad editing issue, and I'm not sure how to fix it either.) JohnInDC (talk) 18:25, 25 March 2008 (UTC)

Ah, it was systemwide. See Wikipedia:ClickFix. JohnInDC (talk) 21:51, 25 March 2008 (UTC)

Location

Isn't FDIC actually headquartered in Arlington, Virginia right off of the Ballston metro? That's like saying that the Dept of Defense is headquartered in DC. Technically OSD is in Arlington VA at the Pentagon. —Preceding unsigned comment added by 24.12.192.234 (talk) 00:23, 14 July 2008 (UTC)

No. The Main Building of FDIC - housing the Chairman, Board of Directors, General Counsel among others - and still quite officially the Headquarters, is on 17th St. in Washington, DC. JohnInDC (talk) 01:10, 14 July 2008 (UTC)

Here are a couple of reliable sources to the same effect: [1] and [2] (see next to last paragraph). JohnInDC (talk) 01:10, 14 July 2008 (UTC)

Inception 2

The criminality attributed to Leo Crowley seems overstated. The biography by Weiss that is cited doesn't mention embezzlement. Rather Crowley was implicated in concealing large debts he incurred earlier in his career. Two chapters of the book deal with covering up some misdeeds back in Wisconsin, but not with misappropriation of funds in Washington. In fact, the book shows Leo Crowley gave great national service, first as a domestic diplomat and later in financing the war. He became identified early on with the FDIC, and this success was the basis for other management roles. Accordingly, I am toning down the criminal accusation in this article in accord with the reference cited.Rgdboer (talk) 21:39, 12 September 2008 (UTC)

What is the total $ value of deposits insured by the FDIC?

This would seem to be an important question to answer in this article. To put it another way, if all insured banks were to go bankrupt (not that this could happen. of course), how much would the FDIC owe depositors? It would bie nice to know especially to look at 'what if' scenarios. What if banks holding 5% of deposits failed? I'm pretty good at internet searching but I haven't been able to find a clear statement of this. I think the answer may be found here: http://www.fdic.gov/deposit/insurance/risk/ and possibly a recent estimate here: http://www.fdic.gov/deposit/insurance/assessments/assessment_rates_2008.pdf where one chart may show $4.5 trillion in insured deposits, but I'm no expert on analysing such reports. Help would be appreciated. —Blanchette (talk) 05:01, 26 September 2008 (UTC)

I am pretty confident that the reason you can't find a clear answer is because there is none, if for no other reason than the figure is so evanescent. FDIC of course only insures up to $100,000, and there are any number of variants on that flat-out rule, like $200,000 for joint accounts; separate insurance for separate beneficial ownerships, and so forth. To know what total insured deposits are at any moment you'd have to know what deposit accounts at all banks and savings & loans are greater than $100,000, then who owns them, in what capacity, and who the beneficial owners are. I doubt that anyone knows precisely what accounts and amounts are insured at even *one* bank until the time comes to pay claims against them. (And even if someone knew the answer on a Tuesday it would be different on Wednesday). FDIC of course can estimate what it has insured, and at least one of the links you listed shows those estimates - but that's all they'll be. If you want a ceiling figure, FDIC does publish Summary of Deposit figures for all deposits of all banks, thrifts, etc. in the U.S. - this page shows $6.7 trillion in total deposits in the U.S. as of June 30, 2007 (the most recent figures available evidently). That $4.5 trillion figure you mention as "insured" deposits does fit within that total, which is a handy thumbnail confirmation at least. JohnInDC (talk) 14:55, 26 September 2008 (UTC)

After a careful reading of the FDIC 2008 Assessment Rates memorandum I am confident that I have summarized the results correctly and I have added the answer to the "total insured deposits" question to the article. My source is from March 2008 so more recent figures, if available, would be welcome. —Blanchette (talk) 23:53, 26 September 2008 (UTC)

Guarantee caps

The article mentions that the current cap is $100,000 (in general) and that the cap began as $10,000 in 1933 but there is no mention of the history of the caps, or my particular question, when $100,000 became the cap. It seems rather low to me at this point in history. There are good reasons to force people to spread their savings (ha!) around, but, considering the relative value of $10,000 in 1933, aren't we overdue for an adjustment to the $100,000 cap at this point? Anyone know where to find this kind of information? Economy1 (talk) 12:48, 29 September 2008 (UTC)

I came to this page with the same question. Didn't they first raise it in the '80s? This sort of info would be quite useful, if anyone has it. Coemgenus 15:29, 30 September 2008 (UTC)

I thought about adding something quickly but realized that doing the subject justice will take a bit of work. The cap was $25,000 through the, I dunno, '70s and was raised in very short order to $40,000 and then $100,000 during the S&L crisis in the late '80s, without a ton of discussion in Congress. (This largely from memory.) It's not altogether obvious that the ceiling should simply rise along with the CPI or some other measure of inflation. The original purpose of the insurance was to prevent bank runs, which when they happen, assure a troubled bank's (instant) failure even when there may have been a fair chance of turning it around. If so then perhaps the cap should stay as low as it has to be to prevent such events -- and one can certainly argue that, at $100,000, it seems to be doing its job. IndyMac, WAMU and Wachovia have all (more or less) failed in the past few months and while (I am guessing) all of them did suffer deposit run-offs in the period leading up to their respective demises, none of them had people pounding on their doors demanding their money. And too, there's an argument that higher caps only exacerbate the problem of unsound banking practices by removing market discipline -- depositors don't bother to find out whether their bank is well run or badly run, because if it craters they won't lose any money; so even poorly run banks can keep attracting deposits (then losing the money in still more bad investments). JohnInDC (talk) 17:40, 30 September 2008 (UTC)

Oh heh, I didn't even notice this thread in talk. I seem to have added all the proper information in re: what happened when for the insurance cap. --Diablo-D3 (talk) 19:22, 1 October 2008 (UTC)

Temporary Liquidity Guarantee Program

Hey y'all... I started Temporary Liquidity Guarantee Program yesterday and would appreciate any assisteance in improving it. MPS (talk) 18:30, 24 November 2008 (UTC)

I have linked to this and also added information that non-interest bearing accounts are covered under the TAGP of the TLGP.Kbk (talk) 17:16, 22 February 2009 (UTC)

President Franklin D. Roosevelt was personally opposed...[citation needed]

President Franklin D. Roosevelt was personally opposed to insurance because he thought it would protect irresponsible bankers, but yielded when he saw Congressional support was overwhelming.[citation needed]

This sentence seems to be a two-part sentence, with the first being that he was opposed to it and the second that he yielded when he saw that Congressional support was overwhelming. Would it be appropriate, then, to ask for citations of both parts of this sentence? That he was personally opposed can, I suppose, be proven. Over at the blog Cafe Hayek, economist Russell Roberts posted an entry [3] on Dec. 02, 2008 about this very subject. In his entry, he provided what he believes to be a quote from FDR on the FDIC, which said:

It would lead to laxity in bank management and carelessness on the part of both banker and depositor. I believe that it would be an impossible drain on the Federal Treasury to make good any such guarantee. For a number of reasons of sound government finance, such plan would be quite dangerous.

Russell Roberts claims, and I have no reason to believe he is lying (though, without seeing a copy of that edition of that paper, I also have no reason to believe that he is telling the truth), that this quote came from a letter FDR had written to the New York Sun in October of 1932.

Now, I don't think that it would be appropriate to link to a blog for the purposes of a citation. But, I also don't have access to the archives of what is now a defunct newspaper or microfiche copies. How can I find a copy of this edition of this paper? —Preceding unsigned comment added by 98.206.169.158 (talk) 17:20, 31 March 2009 (UTC)

T —Preceding unsigned comment added by 98.206.169.158 (talk) 17:05, 31 March 2009 (UTC)

Director Bair and the board.

The official website has the director and board members listed. They should be shown here. [4]--DThomsen8 (talk) 12:21, 25 July 2009 (UTC)

"Full Faith and Credit" edits

After seeing that the "Full Faith and Credit" section had been deleted (by Cylonagen) as "unnecessary" (I thought it was a useful prompt to investigate the FDIC more closely -- it is a part of the 'due diligence' required of any serious investor to investigate the clams of those making promises about safety), I took a closer look at the issue and discovered that the reference at the beginning of the article supporting the claim that "Insured deposits are backed by the full faith and credit of the United States" was not supported by the cited reference to "TITLE 12 > CHAPTER 16 > § 1828" which in fact imposes no obligations on the U.S. Government but merely imposes obligations on insured institutions regarding signage! In light of this discovery I changed the claim at the beginning to conform to the citation and restore the section raising questions regarding "Full Faith and Credit". I recognize that this section could use more references to reliable sources on the issue but its second reference[5] is to the FDIC itself where in answer to a lawyer's question about the government's legal liability to support the FDIC insurance fund, the answer was that it was "the sense of Congress" expressed in Title IX that the fund was backed by the full faith and credit of the U.S. but that Title IX "does not change any existing underlying law" -- which means that the previous situation cited in the lawyer's question remains true, namely that previous (non-binding) resolutions "did not serve to create any legal liability on the part of the United States Government to support the funds." This may be a moot legal point, especially in view of recent 'bailouts' reaching into the $trillions, but it is still important to understand that if the FDIC failed to reimburse you for a lost deposit, you would have no legal claim against the U.S.

I also noticed that the cited page from 1987 mentions "the FDIC's statutory authority to borrow up to $3.0 billion from the Treasury". The recent (August 27, 2009) FDIC press release [6] mentioned at the end of the Deposit Insurance Fund section refers to "the ability to borrow up to $500 billion from the Treasury." I trust Chairman Bair on this, but I think it would be helpful to Wikipedia readers to know the statutory authority for this $half-trillion credit line. Anyone know the answer to this? —Blanchette (talk) 06:35, 29 August 2009 (UTC)

The foregoing fairly well summarizes my objections to the recent IP edits - it is almost certain to a fault that, if pressed, Congress would step up to the plate and back the FDIC no matter what the agency needed; but as of this moment, there is no such obligation upon the Treasury and it is incorrect that the article should say so. (Whatever the FDIC itself may claim.) JohnInDC (talk) 14:05, 26 February 2010 (UTC)

Regarding the dispute

I saw this on the "editor assistance" page. I noticed this edit. The inclusion of such a large amount of content directly copied from what appears to be a legal document seems unusual. At the same time, this is not a subject I am much familiar with. But since I saw this, and it seems unreasonable, I am going to revert the edit which included all that information. If the individual who believes it belongs there explained clearly why on the talk page, that would be helpful. My understanding is that Wikipedia is a tertiary source, and repeating big chunks of primary source material isn't standard practice. --TheSoundAndTheFury (talk) 14:31, 26 February 2010 (UTC)

Thanks. Now for the purpose of advancing the discussion, I'll lay out my point of view so that the right issues are addressed. It's this: The agency says its insurance obligations are backed by the full faith & credit of the US. That is not the case from the get-go, because the FDIC insurance fund is maintained using insurance assessments on banks, not Treasury funds. So this obligation on the Treasury funds needs to be reflected in some Congressional enactment. (It should go without saying that the FDIC, or a president in a signing statement, can't oblige Treasury in that fashion.) It is clear that prior to 1989, Congress had not expressly allowed that FDIC could make such a call on Treasury - the statutes and other sources noted by the IP editor say as much. (Two non-binding statements by Congress and an FDIC advisory opinion that said the issue would be up to the Attorney General.) FIRREA came in 1989 and while it speaks of backing certain obligations with the full faith & credit of the US, deposit insurance obligations were expressly excluded. Now - it is abundantly clear that as long as the FDIC needs money to pay off depositors of failed banks, Congress will somehow step in to bridge the gap, whether by loans to FDIC or further action that - in fact - obliges Treasury to make good. The consequences of not doing so would simply be too dire. But that certain *predicted* course of action is not the same as an existing, binding Congressional enactment that FDIC's insurance obligations are backed by the full faith & credit of the United States. The language of the article as it stands now (after reversion to its original form) captures this pretty well - the gist being, "the FDIC claims full faith & credit backing but the statutory authority for the claim is not clear". JohnInDC (talk) 15:01, 26 February 2010 (UTC)

---

johnindc, I find it disturbing that you would remove my edits for failure to source my findings when I did source everything I provided and it is actually you who have no factual source for your baseless conclusion that the “full faith and credit” guarantee of the deposit insurance fund is “non-binding”. If you do, then provide (1) single ruling, court document or LAW which supports your claim that the “full faith and credit” clause is non-binding. Just one.

Clearly you have simply regurgitated the language in an opinion you read on the FDIC website from 1987 which predates a lot of the laws that were passed after that “advisory opinion” was written.

Your opinion that the full faith and credit guarantee of Federally Insured deposits is not binding upon the US Government is UNFOUNDED. And it is going to be proven as such using sourced Laws and sourced FACTS. You utilize an “advisory opinion letter” dated November 9, 1987 (please see [7] ) to justify your misinformation because YOU believe it supports your argument that FF&C US guarantee of the FDIC insurance fund is morally pledged and not rooted in a legally binding obligation.

Let’s start with the November 9, 1987 “opinion”: The opinion posted at the FDIC website is in response to a letter dated October 7, 1987 (a copy of which we are unable to see), but based upon the response “opinion” we are able to deduce that the inquirer is asking whether or not the full faith and credit of the US stands behind the deposit insurance overseen by the FDIC. Apparently the inquirer wrote the letter shortly after the passage of the law entitled Competitive Equality Banking Act of 1987 ("CEBA"), which was signed into law by President Reagan on August 10, 1987. In the advisory opinion, it says the inquirer wrote a similar letter in light of the NON-binding joint resolution of congress (H.R. Con. Res. 290 passed March 1982) and there was an opinion issued on that letter, too. The advisory opinion states:

…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.

As to whether or not the enactment of CEBA in 1987 changed the earlier opinion from 1985, the advisory opinion states:

…any final conclusion on this matter rests with the Attorney General of the United States and ultimately with the courts…

Notice that they refuse to make a “baseless” conclusion with that statement.

The advisory opinion is commenting on this part of the CEBA law which states (it says so in the letter):

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.

The advisory opinion goes onto say that with the passing of CEBA in 1987, its OPINION has not fundamentally changed and that any factual conclusion rests with the courts. In the end, the advisory opinion is just that, “an opinion” and nothing more and it states that very clearly in the document itself (the source for this is the advisory opinion on the FDIC website).

You go onto make the following UNSOURCED statement:

…It is clear that prior to 1989, Congress had not expressly allowed that FDIC could make such a call on Treasury - the statutes and other sources noted by the IP editor say as much. (Two non-binding statements by Congress and an FDIC advisory opinion that said the issue would be up to the Attorney General.)…

Where is your source that Congress did not expressly allow FDIC to call on the Treasury prior to 1989? You have not provided us with a source for your UNSOURCED statement. The last time I checked, the Congress only made ONE non-binding deposit insurance resolution in 1982, not two as you claim in your statement above. Are you referring to the language in CEBA 1987 as your 2nd example? If so, can you provide me with the Court that found the language in CEBA 1987 was “non-binding”? The advisory opinion you’re using to support your opinion does not make any factual conclusions as to whether or not the language in CEBA 1987 was binding or not. It simply OPINES.

You go onto further state:

… FIRREA came in 1989 and while it speaks of backing certain obligations with the full faith & credit of the US, deposit insurance obligations were expressly excluded…

Where is your source for the assumption that FIRREA 1989 excludes deposit guarantees under the FF&C clause stated therein? Unless you can provide ironclad evidence to the contrary, your statement is UNFOUNDED. Do you even know what FIRREA is or how it affected insured deposits? Have you even bothered to read FIRREA 1989 or did you simply regurgitate your same combative argument based on an “advisory opinion” written in 1987 prior to the passage of FIRREA in 1989?

To understand the full effect of FIRREA 1989, it is highly recommended you do your research by first reading the effect it had by studying the laws that begin with 12 U.S.C. § 1811, et. al. Here’s a link for easy reference [8]

Under Paragraph # 6 of 12 U.S.C. § 1825, which discusses the FDICs powers to take on obligations, issue notes, etc. See this link: [9]

It states the following:

(6) "Obligation" defined (A) In general FOR PURPOSES OF PARAGRAPH (5), the term "obligation" includes (i) any guarantee issued by the Corporation, other than deposit guarantees;

Pay careful attention to where it states “FOR PURPOSES OF PARAGRAPH #5” above. It says for Paragraph #5’s purposes (ONLY) “obligation” does not include “deposit guarantees”. I’m assuming your misreading of this paragraph is what led to your misinformed statement above that deposit insurance obligations were excluded under FIRREA 1989? However, close examination of Paragraph #5 of the law cited above explains why deposit guarantee obligations were excluded for PURPOSES OF Para # 5. Paragraph # 5 states:

(5) Maximum amount limitation on outstanding obligations Notwithstanding any other provisions of this chapter, the Corporation may not issue or incur any obligation, if, after issuing or incurring the obligation, the aggregate amount of obligations of the Deposit Insurance Fund, outstanding would exceed the sum of - (A) the amount of cash or the equivalent of cash held by the Deposit Insurance Fund; (B) the amount which is equal to 90 percent of the Corporation's estimate of the fair market value of assets held by the Deposit Insurance Fund, other than assets described in subparagraph (A); and (C) the total of the amounts authorized to be borrowed from the Secretary of the Treasury pursuant to section 1824(a) of this title.

So, for paragraph #5 purposes (as described in Para 6), deposit guarantees are RIGHTFULLY excluded because if they were NOT excluded for paragraph 5 purposes, then Deposit Guarantees would be subject to the “maximum amount limitation” described in Paragraph #5. We don’t want the FDIC to be limited in its obligations to insure bank deposits, do we? Thankfully, they were excluded from this restriction by way of Paragraph #6.

Furthermore, if you read further down in the statute of 12 U.S.C. § 1825, you’ll see this stipulation of the law:

(d) Full faith and credit The full faith and credit of the United States is pledged to the payment of any obligation issued after August 9, 1989, by the Corporation, with respect to both principal and interest, if - (1) the principal amount of such obligation is stated in the obligation; and (2) the term to maturity or the date of maturity of such obligation is stated in the obligation.

The language does NOT explicitly define “obligation” for purposes of this paragraph, but since it does NOT explicitly exclude deposit guarantees (a legal obligation), it must be included (if they wanted to exclude it, I’m sure Paragraph #6 would have read “for purposes of the entire law”, but instead it does NOT say that). Furthermore, based on this section, we can determine that an obligation (deposit guarantee) must state the “principal amount of such obligation” and the “term to maturity” must also be stated within the obligation. Based on the CURRENT FDIC deposit guarantee language which can be found at the FDIC website, we can see the principal amount clearly stated in the signage (which is the advertised guarantee and in underlying statute, see this link for further proof that the insured amounts are codified (see [10] ) and we can clearly see the date of maturity of the obligatory guarantee (at least 250k guaranteed through 12/31/2013). It’s unclear as to whether or not the expiration date of that guarantee was “added” as a result of the statute cited above or whether or not some other determination was made to affect the language in the guarantee. Either way, based on the CURRENT guarantee in place, it appears that the FDIC is in compliance with statutory requirements for its obligation to be covered by FF&C.

Now, let’s assume for a minute (hypothetically) that none of the above laws existed. Let’s pretend we don’t have those laws mentioned above.

Let’s take a look at what the FDIC is and what its powers are for a minute. Under 12 U.S.C. § 1819 which can be found here, [11], it describes the powers of the FDIC:

(b) Agency authority (1) Status The Corporation, in any capacity, shall be an agency of the United States for purposes of section 1345 of title 28 without regard to whether the Corporation commenced the action.

So, according to statute, the FDIC has “agency” authority and it is an “AGENT” of the US Government. Now, let’s head over to the “free dictionary” to see what an “agent” really is, shall we? See this link, [12]

a person who is authorized to act for another (the agent's principal) through employment, by contract or apparent authority. The importance is that the agent can bind the principal by contract or create liability if he/she causes injury while in the scope of the agency

Since FDIC is a US Government agency, BY WAY OF LAW and since the FDIC is acting in its capacity of agent, BY WAY OF LAW, to insure deposits and since the FDIC, BY WAY OF LAW makes CLEAR, UNEQUIVOCAL statements or guarantees and/or promises the FULL FAITH AND CREDIT OF THE US Government in insuring its obligations, then by way of LAW, the US Government is BOUND to providing the full faith and credit of its support to its agent’s obligations because the agent has legally created a BINDING LIABILITY for the US Government in its agent capacity. So, when Sheila Bair says that the FDIC is the Government, she isn’t lying.

Now, let’s see what laws exist on the books MANDATING that a federally insured institution clearly advertise the FDIC’s unequivocal “full faith and credit” guarantee, shall we? Please refer to this section of the US Statute: [13]

Here it says:

(a) Representations of deposit insurance (1) Insured depository institutions (A) In general Each insured depository institution shall display at each place of business maintained by that institution a sign or signs relating to the insurance of the deposits of the institution, in accordance with regulations to be prescribed by the Corporation. (B) Statement to be included Each sign required under subparagraph (A) shall include a statement that insured deposits are backed by the full faith and credit of the United States Government.

So, it is MANDATED that an insured institution make the assertion and represent and guarantee that insured deposits are backed by the full faith and credit of the US. It is MANDATORY and it is CODIFIED.

Now, according to CONTRACT LAW, if a PRINCIPAL (or their AGENT) makes an advertised guarantee (in this case, it is in writing), then if there was an exchange of MUTUAL consideration (i.e. FDIC/Govt make the guarantee, a depositor makes a deposit based on an inducement to do so in reading the guarantee that his deposit was guaranteed), then a BINDING agreement has been created (even in the absence of a formal written contract). If an employee of an employer offers a job to a candidate, even in the absence of a formal contract, legal obligations and implications are created upon the utterance of a job offer. Consult an attorney or a judge if you doubt this. Better yet, you can read about the elements of a contractual obligation here: [14]

So, even in the absence of any other law on the books, the binding legal obligation was created the when the FDIC started advertising and trumpeting the fact that its deposit guarantees are backed by the full faith and credit of the US (and the public responded by depositing their money). They bound the US Government to this guarantee via their legal agency’s statements, advertisements and assurances (written and verbal). Furthermore, it has been used in writing for DECADES. So, the US Government is “on the hook” for all purposes under the FDIC guarantee.

Now that your statements claiming that there are no legally binding obligations on the US government for FF&C have been proven to be FALSE, please correct Wikipedia so that it does not continue spreading misinformation.

Thank you —Preceding unsigned comment added by 68.219.142.97 (talk • contribs)

I'll be brief.

The FDIC is not an appropriated agency. Congress does not allocate money to it from the Treasury to enable it to operate. Debts and obligations of the FDIC or the Deposit Insurance Fund are not automatically debts and obligations of the United States.

Only Congress can create financial obligations against the U.S. Treasury. (You can sue the U.S. for money in the Court of Federal Claims only because Congress has waived sovereign immunity to permit it; there are no common law claims for money against the United States.)

Absent an act by Congress obliging the Treasury to make good on obligations by the FDIC to insured depositors, insured depositors have no claim against the United States for money based on FDIC deposit insurance. (You should revisit section 1825 of the FDI Act and consider it the context established by the preceding 1824 and succeeding 1826 - the provision plainly applies to debt obligations issued by the FDIC, i.e., borrowings, not insurance obligations.)

Maybe you're made a case for full faith & credit backing of FDIC insurance promises. I don't know - and, if truth be told, neither do you. And, setting aside the obvious original research issues with your arguments and conclusion, it's clear that if it takes you several hundred words and several disparate statutory references to explain why one might infer such an obligation (which can be expressed in about ten words by someone determined to do it), then by definition the statutory basis is "unclear". Which is what the article now says. It should stay the way that it is. JohnInDC (talk) 04:33, 27 February 2010 (UTC)

PS. Please sign your comments with four tildes (~). If you don't want to do that (though you really should), then please at least don't remove the signature that Wikipedia supplies for you, as you did to your posting above. Thanks. JohnInDC (talk) 04:36, 27 February 2010 (UTC)

No, johnindc, it is NOT unclear. You are simply wrong. And you have been proven wrong. Not once, but numerous times over. Just because you cannot understand something, it does NOT make you right. And you are correct, YOU DO NOT KNOW. Therefore, you need to put your baseless opinion aside and go with the concrete evidence presented.

Johnindc, no one is arguing with you about whether or not the FDIC is "appropriated" or not. It is an agency regardless of what you say based on statutory provision. Agents can and will create liabilities for their principals. That's just the way the law works.

And you are right that Congress is the only entity that can create obligations on the US Treasury. And they did that when they issued (or reaffirmed) their position that the full faith and credit of the US stands behind the deposit insurance and they did that when they created their agency (FDIC) which went on to operate under the deposit insurance act (which the congress signed into law). And there is no claim against the US (it is only in effect when/if the agency itself fails to deliver). Why don't you understand that? There is an example on the books (the S&L crisis of the late 80s being one) where the US Govt. had to step in and support a failing institution that guaranteed S&L institutions. That's a precedent.

1824, 1825 and 1826 of the FDI Act does NOT (except where it explicitly states for limited purposes of "Maximum Amount" Limitations of paragraph #5) exclude deposit insurance guarantees. Cite the language where it excludes deposit insurance from the full faith and credit paragraph. Cite it from anywhere in the Act where it excludes deposit insurance obligations. Show me, don't tell me.

No one said the law was simple or streamlined so that it can fit on someone's "crackberry". You are unable to provide even ONE factual, statutory reference to support your unsourced opinion (you cannot use one isolated OUTDATED opinion to support your own, that's ridiculous). You wanted sources and I obliged. Now please correct your false statements. —Preceding unsigned comment added by 68.219.142.97 (talk) 05:28, 27 February 2010 (UTC)

Belatedly I realize that you don't understand what Wikipedia represents. It's not a place where contributors make arguments and the best one is set forth. It is rather a compendium of information that has already been published in reliable and verifiable sources. Please, go and review those pages, as well as this page on original research, to understand why neither your statutory exposition nor its determinedly unambiguous conclusions cannot (and will not) be included here. (Actually, start with that last one, which is a good overview.) Also take a look at WP:Civil and WP:No personal attacks for some suggestions about how to more effectively work with editors with whom you disagree. Finally, again, please sign your posts. Thanks. JohnInDC (talk) 12:21, 27 February 2010 (UTC)

This is obviously going nowhere. I've provided clear and unambiguous and verifiable law to prove the Full faith and credit is binding. It is not only referenced in law, but also at the FDIC website, promoted by Presidents, advertised in signage and supported by Congress and supported by the legal precedent of the S&L crisis (yet you want more sources, my goodness). It is also supported by contract law in absence of everything else. Obviously, I was not aware of Wikipedia's procedures where one editor can inject his bias into an "encyclopedia" entry and even when proven false, can continue to combatively defend his defenseless position without citing anything other than his own subjective dogma. Rather extreme, don't you think? Either way, I'm sorry if you have taken offense to anything I have said. It was not my intention to offend, but to simply educate and correct an incorrect entry in Wikipedia. Not to engage in some frivilous "technical" debate about which rules were being followed or not followed here (obviously you've chosen to fall back on this since you are unable to attack any of the laws or facts surrounding FF&C of the FDIC). I'm sorry, I do not know how to sign my "signature" here (I will concede when I do not understand something, I suggest you do the same). My apologies for not being able to follow that rule.

As a concerned citizen, I'll try to petition the FDIC's counsel to send a cease and desist on the unsubstantiated innuendo in the article surrounding full faith and credit. After all, Full Faith & Credit is vital to the confidence of the entire banking system. To have an erroneous entry in Wikipedia spreading unsubstantiated misinformation is just unacceptable. Especially when information is readily available to prove the entry is inaccurate (as I have provided above) 68.219.142.97 (talk) 13:35, 27 February 2010 (UTC)

Criticisms

How about a criticisms section, since there are plenty? A very reasonable commentary can be found here:

http://www.youtube.com/watch?v=8SAMey9Gl5I&feature=player_embedded —Preceding unsigned comment added by 67.241.163.214 (talk) 18:33, 10 June 2010 (UTC)

I've removed the Criticisms section as, first, unsourced and second as not really fitting to this article. They weren't criticisms of the agency as such but instead observations about the economic system within which the agency exists. A criticisms section may be appropriate, but that one, as constituted, wasn't it. JohnInDC (talk) 18:58, 10 June 2010 (UTC)

This might belong in misc. 25% unemployment. They were counted differently then. —Preceding unsigned comment added by 67.172.170.25 (talk) 00:53, 21 July 2010 (UTC)

Umbrella limits?

Oddly the topic of umbrella limits is completely missing from this article. --Treekids (talk) 05:10, 7 December 2010 (UTC)

Fraudulent emails

They've recently received several reports of fraudulent emails being sent out using their name. I actually received one myself today which prompted me to Google them (not being from the US I hadn't heard of this organisation) and I found the aforementioned link. Just wondering if we should mention this in the article (the emails in general that is, not my specific email :) ). TheRetroGuy (talk) 22:21, 15 September 2011 (UTC)

I think that's a pretty transitory item, doubtlessly something like that happens constantly. If it happens *so* often that it becomes bona fide notable, then perhaps yes but for now I'd leave it. JohnInDC (talk) 00:24, 16 September 2011 (UTC)

I'll keep an eye on it. I know these sorts of things come from organisations claiming to be banks, building societies, etc, and we're probably all aware of the countless Nigeria-based scams (I've certainly had a few of those), but I've not personally come across an email claiming to be from a government body in the developed world before now. Maybe I've just been lucky, but I do think it's worth mentioning if it becomes serious and gets a lot of coverage. I might also look for an article on this subject and add suggest adding details there. I guess phishing may be a good place to start. TheRetroGuy (talk) 10:50, 16 September 2011 (UTC)

FDIC example coverage image

After some discussion on my talk page and the editor assistance page, it appeared okay that I re-add the image. It is produced from the FDIC's EDIE (Electronic Deposit Insurance Estimator) and is verifiable. Let me know if there are any problems with it. Thank you - Chriscd2 (talk) 21:46, 15 November 2011 (UTC)

2008-2010 financial crisis....2011,2012?

I notice there is a break down of bank failures from 2008-2010. 2010 was the peak of failures with 157 bank failures, 2011 had 92 and so far 2012 had 23. Perhaps we should expand the years as banks are still failing at alarming rates. for a base line 2005 and 2006 had 0 bank failures, 2007 only had 4.Mantion (talk) 21:17, 23 May 2012 (UTC)

I think it's a good idea to add the later statistics, though I would caution against characterizing the figures. It may still be a lot of banks but the trend is clearly downward, and I think it's better to leave qualitative conclusions to the reader. Indeed depending on your baseline, the 50-60 annualized failures for 2012 look pretty puny compared to the 10 years 1982 - 1992 (http://www.davemanuel.com/history-of-bank-failures-in-the-united-states.php)! The period 2003 - 2007 was by contrast a historic low for failures. JohnInDC (talk) 21:34, 23 May 2012 (UTC)

Agreed but the size of the average failure has significantly increased.Mantion (talk) 01:13, 20 June 2012 (UTC)

Yeah, but again, we should not be adding our own gloss to the figures. Banks are still failing, bigger ones than used to fail, but the Deposit Insurance Fund is growing, not shrinking, and the sense of there being a continuing banking "crisis" has largely passed. Certainly we aren't seeing front page coverage of the failures like we did during 2008-09. So - add the figures if you have a source, but I wouldn't try to characterize them as a continuation of the crisis. JohnInDC (talk) 01:34, 20 June 2012 (UTC)

Federal Crop Insurance Corporation

This edit has been inserted twice so I am raising it here for any necessary discussion. The link is not appropriate to the "Related agencies and programs" section. The FCIC and its mission is not related to that of the FDIC; indeed the only thing that the FCIC and the FDIC have in common is that they are federally chartered corporations that write insurance against certain risks. If they were the only two agencies in the government to offer insurance then there might be an argument for putting them both in, but they are not. There are - by way of example - also Pension Benefit Guarantee Corporation, SIPC, OPIC, and FEMA, and there are doubtless a dozen or so others at least. It might be a useful category to create (e.g., "U.S. Federal Agencies Providing Insurance"), but tacking one agency on at the end of the article of another, unrelated agency isn't the way to note that one common feature. JohnInDC (talk) 12:15, 27 January 2014 (UTC)

FDIC or OCC

Last sentence of the second paragraph under "S&L and bank crisis of the 1980s" states: "Thrifts are now regulated by the OCC." Is this true? I thought thrifts were under FDIC supervision. Also, if true, Office of the Comptroller of the Currency isn't spelled out before this usage. Filé gumbo (talk) 18:43, 7 September 2014 (UTC)

Good catch. I fixed it. Thanks. JohnInDC (talk) 18:54, 7 September 2014 (UTC)

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Comments and questions

1. "The Great Depression devastated the American banking system. There was widespread panic over the American banking system."

These sentences are redundant.

2. "The brunt of the crisis fell upon a parallel deposit insurer, the Federal Savings and Loan Insurance Corporation (FSLIC), created to insure savings and loan (S&L) institutions (S&Ls, also called thrifts)."

This sentence is unclear.

3. "Because of a confluence of events"

What is it? It's not clear.

4. "This is important because former regulators say that this is the level that can wipe out a bank's equity and threaten its survival. While this ratio does not always lead to bank failures if the banks in question have raised additional capital and have properly established reserves for the bad debt, it is an important indicator for future FDIC activity."

This section of the "2009" subsection should be written in the past tense to be consistent with the rest of the text.

5. "In June 2013, Wigand announced that he would be stepping down as director."

Is the information still current? If not, it should be updated.

6. "Bank failures typically represent a cost to the DIF because the FDIC, as receiver of the failed institution, must liquidate assets that have declined substantially in value while, at the same time, making good on the institution's deposit obligations."

I don't understand what "making good" means in this context. A better expression is needed.

7. "When a bank becomes undercapitalized, the institution's primary regulator issues a warning to the bank." "When the bank becomes critically undercapitalized the chartering authority closes the institution and appoints the FDIC as receiver of the bank."

What is the primary regulator? What is a chartering authority?

ICE77 (talk) 07:27, 10 October 2017 (UTC)

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Proposed merge with Money Smart

This article is strictly promotional and not notable. It should be redirected or deleted Rogermx (talk) 16:36, 27 September 2018 (UTC)

Yeah. That's not much of an article, and could be folded into a sentence or two here I think. JohnInDC (talk) 18:12, 27 September 2018 (UTC)