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.