The FDIC has proposed a premium collection from banks that amounts to three years worth of premium payments so the FDIC can replenish its fund in light of the many bank failures that have drained the FDIC fund to dangerous lows. However, there is new information about these premiums that is a bit shocking.
The FDIC is asking for these early premium payments and it is at time when most banks are struggling but the FDIC is only asking for premiums in regards to the amount of deposits a bank has on hand. Reports are saying, for some reason that goes beyond common sense, in the past for stretches as long as ten years 90% of banks paid NO premiums to the FDIC.
During the times when the economy was on solid ground and prosperous banks were flourishing they were paying no premiums to the FDIC and there has yet to be a good reason as to why. There are officials that have said that when a bank is rated as safe there is no need to collect premiums but one mortgage institution that was rated as safe is now costing the FDIC around $9 billion.
Logically, if an average person were to have some type of insurance policy and that person were doing well in terms of income (i.e. they had a great job, paid bills with ease, etc.) do you think an insurance company would allow that person to go a decade without paying premiums?
What this FDIC problem boils down to is bad business. The FDIC is wounded due to the bank failures but it’s a problem that could have easily been avoided had all of our nations banks paid premiums on their deposits. Paying insurance premiums to the FDIC would not only have built up enough funds to handle this recession, but it would have stopped the banks that were said to be “too big to fail” from achieving such a dangerous status. Yet, these “too big” banks are still backed and being taken care of by the FDIC that received little or no insurance premiums in relation to the amount of capital the banks were receiving.
It’s always easier to look back and see the problem and solution, but since that does little to help, let’s just hope the FDIC has taken a lesson from it’s current woes with the banks and will change its ways of doing business. As the economy gets better with every month some Americans are willing to start research on Big Lots Outdoor Wicker Furniture Bargains Memorial Day 2012. Remember that furniture can be an expensive purchase but stores like Big Lots and WalMart help customers for affordable options for their lawn or garden.
In the coming weeks it will also be true that many start to look for a Wedding Registry at JCPenney Online 2012. This is the time of year that most couples start their wedding planning and a registry is a great place to start. Remember that there is great competition in this industry including Belk, Dillards, WalMart and Target.