Previous Press Releases

FDIC Publication Helps Consumers Understand Their New, Higher Deposit Insurance Coverage

Latest Advice on How to Be Fully Protected is Available Free

FOR IMMEDIATE RELEASE
December 4, 2008

With banks and the economy in the news so much lately, many people are thinking more about the safety of their money. The good news for consumers is that federal deposit insurance coverage has significantly increased, primarily as a result of a temporary boost in the basic insurance limit from $100,000 to $250,000. That's also why the Federal Deposit Insurance Corporation has issued an explanation of the new changes along with tips and information to help bank customers better understand their insurance coverage and how to be sure all their deposits are fully protected.

The advice was published as a special edition of the agency's FDIC Consumer News (the Fall 2008 issue) entitled "Your New, Higher FDIC Insurance Coverage: How You Can Be Fully Protected." Among the key points made in the new publication:

The basic limit on federal deposit insurance coverage has been temporarily increased from at least $100,000 to at least $250,000 per depositor. But as always, a depositor may qualify for more than the basic insurance coverage at one insured bank because the FDIC provides separate insurance coverage for deposits held in different "ownership categories," such as single and joint accounts.
By law, the basic FDIC insurance limit will return to $100,000 on January 1, 2010. That means all the deposits a consumer has at a bank in his or her name alone will be fully insured up to $250,000 through December 31, 2009. After that date, the depositor will only be insured up to $100,000, with any balance over that limit becoming uninsured. However, it is important to remember that additional coverage may be available depending on how accounts are held, such as when deposits are owned jointly with another person. The reduction in coverage starting in 2010 will not affect certain retirement accounts, which will continue to be protected up to $250,000.
The FDIC has eased the rule governing "revocable trust accounts" that pass to named beneficiaries when the account owner dies. No longer does the FDIC consider only the account owner's spouse, child, grandchild, parent or sibling as "qualifying beneficiaries" for additional insurance coverage ($250,000 if there is one beneficiary, $500,000 if there are two, and so on). Now, an account owner can name any person or charity as a beneficiary and the owner will qualify for the additional deposit insurance coverage.
Through year-end 2009, certain checking accounts at participating banks will be fully insured by the FDIC, no matter how much money is in them. This special insurance coverage applies only to no-interest checking accounts and certain other low-interest transaction accounts, and only at participating institutions.

Other articles describe various steps depositors can take to be sure they're fully protected by FDIC insurance, why and how to use the FDIC's online deposit insurance calculator called "EDIE," and common misconceptions depositors have that can inadvertently result in being over the federal insurance limit and at risk of loss if their institution fails.

"Your New, Higher FDIC Insurance Coverage" can be read or printed at www.fdic.gov/consumers/consumer/news/cnfall08. To order up to two free paper copies, use the online form on that same Web page or call the Federal Citizen Information Center toll-free at 1-888-8- PUEBLO (1-888-878-3256) weekdays from 8:00 a.m. to 8:00 p.m. Eastern Time and ask for Department 89.

The goal of FDIC Consumer News is to deliver timely, reliable and innovative tips and information about financial matters, free of charge. Current and past issues of FDIC Consumer News, including previously published special editions, are online at www.fdic.gov/consumernews.

There also are two ways to subscribe to the quarterly FDIC Consumer News. To receive an e-mail about each new issue with links to stories, go to www.fdic.gov/about/subscriptions/index.html. To receive the newsletter in the mail, free of charge, call the FDIC toll-free at 1-877-275-3342, send an e-mail to publicinfo@fdic.gov or write to the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226.

The FDIC encourages financial institutions, government agencies, consumer organizations, educators, the media and anyone else to help make the tips and information in FDIC Consumer News widely available. The publication may be reprinted in whole or in part without advance permission. Organizations also may link to or mention the FDIC Web site.

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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,384 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-130-2008

E-mail Claiming to Be From the FDIC – October 9, 2008

The Federal Deposit Insurance Corporation (FDIC) has received numerous reports of a fraudulent e-mail that has the appearance of being sent from the FDIC.

The subject line of the e-mail states: "Funds wired into your account are stolen." The e-mail tells recipients that the proceeds of identity theft crimes have been wire-transferred into their bank account. The e-mail then directs recipients to open and review an attached copy of their bank account statement. The attached file is actually an unknown executable file.

Recipients should consider the intent of the executable file as a malicious attempt to collect personal or confidential information, some of which may be used to gain unauthorized access to on-line banking services or to conduct identity theft.

The FDIC does not issue unsolicited e-mails to consumers. Financial institutions and consumers should NOT open the executable file attached to the fraudulent e-mail.

For more consumer alerts from the FDIC, please go to www.fdic.gov/consumers/consumer/alerts/index.html

FDIC Simplifies Coverage Rules for Revocable Trust Accounts

FOR IMMEDIATE RELEASE
September 26, 2008 Media Contact:
David Barr (202-898-6992)

The FDIC's Board of Directors today adopted changes to simplify the rules for determining the coverage available on revocable trust accounts – commonly called payable-on-death accounts or living trust accounts. The interim rules, which are effective immediately, eliminate the concept of qualifying beneficiaries, so that coverage is based on the naming of virtually any beneficiary.

Under the revised rules, coverage for the vast majority of account owners generally is based on the number of beneficiaries named in a depositor's revocable trust account(s). The insurance limit will still be based on $100,000 per named beneficiary. For revocable trust account owners with more than $500,000 in such accounts naming more than five beneficiaries, the coverage is the greater of either $500,000 or the sum of all the named beneficiaries' proportional interest in the trusts, limited to $100,000 per different beneficiary.

"We believe the interim rule will not only result in faster deposit insurance determinations after bank closings, but will help improve public confidence in the banking system," said FDIC Chairman Sheila C. Bair. "We strongly encourage owners of revocable trust accounts to make certain that the names of their beneficiaries are included in the bank's records."

The new rules are effective as of today (9/26/2008) and apply to all existing and future revocable trust accounts at FDIC-insured institutions.

Comments on the interim rule are due no later than 60 days after the interim rule is published in the Federal Register. Publication is expected to occur within a week.

# # #

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,451 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

NEWS RELEASE
Sept. 17, 2008
ABA Media Contact: Carol Kaplan
(202) 663-5471
E-mail: ckaplan@aba.com

Q&A: How Do Recent Failures, Mergers and Takeovers Affect Me?

Q. Where is the safest place for my money right now?
A. The safest place for your money is in the bank. It's earning interest, it's FDIC-insured and it's accessible.

Q. How will the recent failure of Lehman Bros. affect me?
A. Unless you invested money with Lehman, you will not be affected. And if you did, Barclays Capital has announced that it plans to acquire the U.S. brokerage arm of Lehman, so all customers should be protected. Even if Barclays had not agreed to acquire Lehman Bros. brokerage, customers would still get back all the securities that are registered in their name and further protection would have been provided by the Securities Investor Protection Corp. which could have provided additional funds to satisfy each customer's claims up to $500,000. Of course, there will be economic factors that will affect us all, but Lehman is an investment bank, not a commercial bank.

Q. What's the difference between an investment bank like Lehman and my bank?
A. Investment banks operate differently from commercial banks and thrift institutions. Their primary purpose is to facilitate the sale of stocks and bonds. These Wall Street firms operate as advisers and agents for companies that want to raise capital, often by issuing more stock or other securities.

Commercial banks and thrift institutions take deposits for checking and savings accounts from consumers and businesses. These deposits are insured by the FDIC for up to $100,000 per depositor per insured bank and up to $250,000 for retirement accounts. These banks lend this money to consumers and companies for autos, homes, business equipment, etc.

Q. Should I be worried about the health of my bank?
A. With 98 percent of nation's 8,500 banks considered "well capitalized" – the highest designation possible – the possibility of your bank being taken over by the FDIC is extremely remote. And if it did happen, you would continue to have uninterrupted access to your FDIC insured deposits.

Q. How do I know I won't lose money?
A. Customers' bank deposits are protected. Not one penny of insured savings has ever been lost by a customer of a federally insured bank. Deposits are insured by the FDIC for up to $100,000 per depositor per insured bank and up to $250,000 for retirement accounts. If you need more coverage, your banker can explain your coverage limits and give you options to ensure that all of your deposits are insured.

Q. What about lists that predict the next bank failures?
A. The only list that matters is the one from the FDIC, which has a more thorough and complete picture of a bank's safety and soundness. It's important that this list be kept confidential, because, on average, the vast majority (87 percent) of banks on this list come back to healthy status.

Q. Will I still be able to get a mortgage, credit card or other loan?
A. People with a good credit history will continue to have access to mortgage, credit card and other types of loans. Appropriately, most banks are taking steps to limit risk in the current economic environment, so they have tightened lending standards. That's why it's more important than ever to monitor your credit report and keep your credit score in the "good" to "excellent" range.

Q. How does the recent takeover of Fannie and Freddie affect bank customers?
A: If you already have a mortgage, nothing will change. If you are thinking of buying a home or refinancing a mortgage, the government takeover will help stabilize rates. With explicit government backing, Fannie and Freddie can continue to buy mortgages, hold them in portfolio or sell them into a functioning mortgage market. Mortgage rates nationally have already come down, making it easier for homebuyers to qualify and for homeowners to refinance high-priced loans.

For more information about the FDIC and the safety of bank deposits, visit www.myfdicinsurance.gov

The American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation's banking industry and strengthen America's economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry's $13.3 trillion in assets and employ over 2 million men and women.

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Previous Press Releases

FDIC Publication Helps Consumers Understand Their New, Higher Deposit Insurance Coverage

Latest Advice on How to Be Fully Protected is Available Free

E-mail Claiming to Be From the FDIC – October 9, 2008

FDIC Simplifies Coverage Rules for Revocable Trust Accounts

Q&A: How Do Recent Failures, Mergers and Takeovers Affect Me?

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