An Extension to the $250,000 FDIC Limit?

May 8, 2009
By Kevin Cafferty

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On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009. As we get closer to that December 31 date, a common question has been: will there be any steps to extend these increased limits?

Recently, the Senate voted to extend the $250,000 FDIC limit (by a margin of 91-5) through 2013. The bill now heads to the House. Other aspects of the bill:
  • Allow the FDIC to take up to eight years, from the current five years, to recapitalize the Deposit Insurance Fund.
  • Grant the FDIC temporary additional borrowing authority of $500 billion for systemic reasons -- subject to a two-thirds vote of the agency’s board, a two-thirds vote of the Federal Reserve, and the agreement of the Treasury secretary in consultation with the president.
  • Allow the FDIC to levy bank holding companies for any systemic special assessment if they stand to benefit from government actions, such as the debt guarantee program.
  • Give more power to the Federal Housing Administration and the Rural Housing Authority to modify loans.
  • Expand access to the Hope for Homeowners Program.
  • Increase the National Credit Union Administration’s borrowing authority.
We'll keep you posted - both here and on MoneyAisle.com - as this situation progresses.

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