Obama Proposes Increasing Bank Deposit Insurance

[Hissyspit]

Source: Associated Press

Obama proposes increasing bank deposit insurance

3 minutes ago
WASHINGTON - Democratic presidential candidate Barack Obama said Tuesday the government should extend the federal deposit insurance limit from $100,000 to $250,000 to help small businesses as part of a revamped economic rescue plan he called essential to averting a catastrophe.

Obama said in a statement that Congress should not start over as lawmakers consider their next move in the wake of the House's rejection of a bipartisan plan backed by congressional leaders and the Bush administration.

"Given the progress we have made, I believe we are unlikely to succeed if we start from scratch or reopen negotiations about the core elements of the agreement. But in order to pass this plan, we must do more," he said.

Obama said the current federal guarantee of up to $100,000 in bank deposit insurance, a limit set nearly 30 years ago, is adequate for most families but insufficient for many small businesses. Raising the limit to $250,000 "would boost small businesses, make our banking system more secure and help restore public confidence in our financial system," he said.

Read more: http://news.yahoo.com/s/ap/20080930/ap_on_el_pr/candidates_bailout

[snot]

1. that actually makes a lot of sense.

[radfringe]

3. kind of scary, isn't it? to have someone actually make sense...

yes - that was tongue-in-cheek.

kidding aside - it's actually refreshing. he's keeping his head while all others are losing theirs. It shows leadership, it shows willingness to understand a problem, weigh the options and find reasonable and workable solutions.

meanwhile - I caught some clips of mccain yesterday, gleefully bashing Obama, he couldn't contain his smirkiness over the tag lines he delivered.

Big contrast between mccain and obama. mccain rushes in, doesn't have a clue, didn't read the original 3-page Paulson proposal, messes up the meetings, plucks daisy petals (yes, I will debate, No I won't debate), claims victory on bail-out bill passage on Monday morning, then bashes Obama when the bill tanked in the afternoon.

Obama, on the other hand, is working and monitoring progress (or lack of), puts forth some suggestions and maintains a steady, calm demeanor.

[lynnertic]

27. Wild - I read that was the House Republicans' suggestion last week.

not increasing the amt insured but increasing the amount of insurance.

The FDIC can't cover all the money that's insured, I read.

[demnan]

2. There's Obama

acting Presidential again. :woohoo:

[ixion]

4. while I like the idea, in theory, I'm sad to see him carrying water for the neocons

supporting Bush's Bailout is not a populist position, IMO, but a status-quo beltway one.

[CreekDog]

19. he isn't carrying water for the neocons, he's supporting the bill for our sake

what is with your framing?

[ixion]

20. my framing:

- I don't trust the neocons for a second. Not one bit, not one iota.

- The neocons crafted this heist, and have admitted that it doesn't actually solve the problem.

- We DON'T HAVE a trillion dollars to hand over to the treasury so they, in turn, can enrich the leisure class.

- Did I mention that Bush supports this bill? Since when has Bush EVER steered this country in a good direction.

- I do not support a bailout of the financial sector.

So there it is.

[CreekDog]

22. Barney Frank and Chris Dodd are neocons?

do tell. do tell.

[ixion]

23. they didn't craft this bill

they tweaked it. The end result is the same.

And did you forget about signing statements? All monkey boy has to do is tag on some signing statement and presto, any and all safeguards are eliminated.

How many times do you have to be screwed over before you get the idea that the * cabal is not your friend?



Bush says it's critical to pass financial rescue soon
By Ruth Mantell, MarketWatch
Last update: 9:35 a.m. EDT Sept. 30, 2008

WASHINGTON (MarketWatch) -- Saying this is a "very critical moment for the economy," President Bush urged Congress on Tuesday to act quickly on legislation to save the financial system, one day after the House rejected a $700 billion rescue plan.


http://www.marketwatch.com/news/story/bush-says-its-critical-pass/story.aspx?guid=%7B671D2D55-B15D-4E1D-B61B-6E34864436B7%7D&dist=hpts

what more warning do you need?

[CreekDog]

25. it was 3 pages before they got to it, over a 100 after

and don't fucking tell me that simply because someone i don't like is involved that i'm getting screwed and i'm too stupid to know it.

i know the good and bad in the bill and i wanted it to pass nonetheless.

the perfect bill won't pass because we don't have the numbers to pass such a bill. should we wait until then to act --no.

:rant:

[ixion]

28. more pages does not a better bill make, IMO

and I'm not calling you stupid. We disagree. It's okay to disagree. I'm presenting my point and you're presenting yours.

We fundamentally disagree on the need for a bailout. I wouldn't care, except it comes out of my pocket as well as yours.

[CreekDog]

29. are you keeping track of what you said? the 3 pages is how long the bill was before Dodd and Frank

if you think all they did was tweak it, then you are demonstrating how little information your conclusions are based on and misinforming others as well.

yes we can disagree but you shouldn't lie or tell falsehoods, which you are doing.

(and regarding the cost to taxpayers, you are going to pay either way, but with this bill you get a bunch of things for that, without it, you just pay through devalued currency).

[ixion]

30. what's a lie?

a bureaucrat can add page after page and not add a damn thing to the substance of a document.

This is a heist, and I will not support it.

And all the taxpayer is going to get is trillions worth of worthless paper.

And, again, NO MATTER WHAT gets put into any such "bailout" can simply be over-ridden by a signing statement. Sorry, no dice.

And I'll thank you not to call me a liar.

[CreekDog]

31. do you recognize that you pay anyway? even without the bill?

and likely you pay more?

what you've written doesn't indicate that you know a thing about the bill and what happens without it.

there's no free solution and the FDIC only has about 50 billion left, but the treasury will give them whatever they need to cover the overage and if this bill does not pass, there will be more bank failures and hence more payments from the treasury to prop the FDIC up.

if you wanna see a heist, then do nothing, it will be bigger than what you were worried about in this bill and i'm not sure you even realize that.

[ixion]

32. Again, we disagree on fundamentals

Yes, I understand that there is a cost to me either way. Whether it is more or less, with or without a bailout, is certainly debatable, however if history is any indication, the amount of debt the government is trying to swallow on behalf of the frauds who created it will be more than our fiat currency can bear.

This is not a new scenario. It's played out time and time again. The ramifications are very clear.

And I'll say again, stop attacking the messenger just because you don't like the message.

[OregonBlue]

5. Increasing the insurance may be good but I disagree that they should not start over with an entirely

new plan. The one the Administration put forth was not going to solve the problem so why not start over with something else?

[loyalkydem]

6. Now watch

John McCain and the republicans try to take credit for this idea.

[Left Brain]

46. And the media will help them:

http://www.msnbc.msn.com/id/26955707

Here's the headline to that link:
McCain, Obama urge financial rescue action
Both support raising the deposit insurance limit to $250,000

Dirty, rotten BASTARDS!

[fasttense]

7. Helping the wealthy again.

Why don't we increase the minimum wage to $10/hour right now? If they put that in the bailout for billionaires then they wouldn't get so many calls from very angry voters.

More free tax money for the wealthy is not any kind of solution.

Oh by the way, the POTUS is about to open his pie hole again.

[WriteDown]

8. Why not just increase it to 100$/hr?

Minimum wage is a complicated issue and you can't just throw #'s out there. Although I support Obama's idea, I am curious why ANYONE would keep more than 100K in one account.

[pnwmom]

11. As Obama says, small businesses probably often have more than that in

an account.

[whistle]

12. Well it is per bank NOT per account...a comon misconception

<snip>
General Principles of Insurance Coverage

Insurance is Provided on a Per-Bank Basis
(12 C.F.R. § 330.3(b))
<skip>

Important!
All types of deposits (for example, checking accounts, savings accounts, CDs, interest checks and cashier's checks) that a depositor has at a bank in the same ownership category are added together before the FDIC applies the insurance limit for that category. Consequently, a depositor cannot increase insurance coverage by dividing funds into different accounts in the same ownership category at the same bank.
<MORE>

http://www.fdic.gov/deposit/deposits/financial/principles.html

Obama's proposal increases the limit per bank to $250K

[WriteDown]

17. I understand that...

but that is why I use 3 banks. Although it may be ONE bank soon if they all consolidate :).

[whistle]

34. When that happens your three accounts under the present system

...are summed and tested on the total exposure again limiting the coverage. That a lot of running around for people with savings but who are filthy rich!

[WriteDown]

38. Only if they are under the same "person"

These are separate business accounts. Otherwise there is no way I would have the funds. It is tricky, but it is well worth it.

[riverdale]

14. Right, because it's not insured.

[pnwmom]

10. Increasing the minimum wage won't increase confidence in the banking system,

which is the immediate problem.

But raising the FDIC limit would have a strong psychological effect, I think, as so many people (especially close to retirement age) would breathe easier, thinking their assets were well under the limit.

FWIW, I support a minimum wage increase, and if it would help this bill pass, I would support it here. But it wouldn't do anything to help the liquidity crisis, or stabilize the banking system.

[Honeycombe8]

16. A small business with $200k to put somewhere safe is not a fatcat. That's an ordinary small busines

Plus, many people who are not fatcats have that amt of money in mutual funds or bonds or such, saving for retirement, that they are looking for some place safe to park it.

[Tempest]

18. Bullshit

$250,000 for a small business to have in the bank isn't that much.

I'm not a business owner and I have over $100,000 in various accounts in one bank. I'm looking at moving it to multiple banks to keep under the $100,000 limit. With Obama's proposal, I won't have to go through the time and headache of doing that. Especially since I'll pay penalties to liquidate some of my bank investments to move it.

This is a smart move and would affect a lot more than just the wealthy.

[skyounkin]

35. 100,000 dollars

Is a lot of money to a lot of people.

Educate me- whats wrong with having more than 100,000 dollars in one account?

[Tempest]

39. FDIC only insures up to $100,000 of your money in a single bank

If you have $125,000 in one bank, regardless of the number of accounts you have the money in, you'll only get back $100,000 if the bank fails. You'll lose the other $25,000.

$100,000 is a lot of money to a lot of people, but to a lot of small business owner it's not that much.

[skyounkin]

40. Thank you for the answer

I think we need to define what a small business is, I don't think any business that has over 100,000 dollars is a small business. But of course YMMV.

Anyway- I think raising the FDIC amount will actually help.

[Tempest]

51. Take my doctor, for example

I went in to see him yesterday for a follow up to my shoulder surgery and we got to talking about the banking crisis.

He has a small practice in town and he has over $100,000 in Washington Mutual and he was concerned because of its problems.

He is very much a small business owner and has over $100,000 in the bank.

For a business, $100,000 isn't that much.

[snooper2]

26. you've abviously never run a small business

:)

[whistle]

9. That makes a lot of sense

[MBS]

13. makes a ton of sense to me

and I agree that the increase is overdue

[Honeycombe8]

15. Great idea. Maybe even higher than that. The public needs a safe haven for $$$. nt

[ixion]

21. 90 percent of the public doesn't have anything close to 100k in the bank

so I'm not sure if raising that number would help.

[Honeycombe8]

49. Um....you are wrong. Most middle class older folks have their life savings....

in banks and bonds. That would be over $100k.

Most small businesses (not tiny ones, but still small) have over $100k.

Many white collar workers who are semi-professional and over 40 have over $100k. (like a married couple consisting of a nurse and a mid-management level hubby...they would make well over $100k a year, and have well over $100k saved by 40, unless they bought every luxury item in their dreams.)

If you are young, it seems like a humongous sum. But as you get older, and the years go by, and the decades go by, and if you've been saving religiously, it adds up (you're getting interest on it, too). Inch by inch, little by little.

I'd say not so much in rural areas. And not so much single women who are blue collar workers. But male blue collar workers who work at factories and such? They would have well over $100k saved before they hit 40.

You have to live beneath your means, religiously save, get as high a paying job as you can get (that has benefits), not change jobs a WHOLE lot (it's necessary early on), don't buy anything except a house and car that you don't have the cash to pay for it at the time (nothing...ever...no exceptions...and no debt), pay credit cards off every month in total, use food coupons, shop sales, don't take vacations (or take reeeeeally cheap ones), eat out only occasionally, and comparison shop. If you do these things, you will be able to save enough money to help in your retirement, along w/Social Security.

[Dover]

24. And then there are CDARS which will insure up to $50Million

Though I don't know which banks offer this. It's kind of like a bank coop.

Apparently they are a new thing. Anyone have some good info on them? What's the catch?

Welcome to CDARS

CDARS® is the Certificate of Deposit Account Registry Service®. And it's the most convenient way to enjoy full FDIC insurance on deposits of up to $50 million. With CDARS, you sign one agreement with a participating local bank or other financial institution of your choice, earn one interest rate, and receive one regular statement. It's that easy.


CDARS is the perfect solution for many depositors — from non-profits and public funds to businesses, advisors (including trustees, CPAs, financial planners and lawyers) and individuals, as well as socially-motivated investors.


You've worked hard for your money. Now let it work hard for you. See for yourself
http://www.cdars.com/index.php

---------

CDARS: Beat the $100,000 FDIC limit
By Laura Bruce • Bankrate.com

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x40915

[Phred42]

33. THE FDIC only has 1/3 of the amount they need to cover the Current $100k

Where the hell is the the rest of THAT coming from let alone this new proposal?

[skyounkin]

36. The taxpayers of course

NOT the rich.....

[Phred42]

37. There is no TAx payor $$ left

They will have to run the presses and cause Hyper-inflation

[skyounkin]

41. Oh darn

Time to EAT THE RICH!!!

:donut:

[Bake]

42. Once again, Obama provides real leadership.

The limit has been $100,000 at least since I was working in the banking business back in the 80s. It ought to be increased to reflect the reality of the current environment.

A lot of retirees, for example, have their life savings in several banks because they have well over $100K, but it has to last them the rest of their lives.

Good job, Barack!

Bake

[jonnyblitz]

43. just keep adding that lipstick , Mr. Obama..

:eyes:

[jillan]

44. Sorry - he needs to come up with something better than this -

this is another "I agree with John" moment.

The repukes came up with this last week.

[doodadem]

45. I'm a small business owner

And right now, I have close to $30K in my accounts receivable. I don't know if the client companies that owe me that money have it in their accounts already to pay me, or whether they have to borrow it. That's a bit concerning. Also, for some time now, banks have been holding large out of town checks to make sure they're "good" for a week or more, before they'll release the funds. It's laughable in the age of digital. Are they now going to use the current banking crisis to hold them even longer?

I'm holding off a number of creditors at the moment, on the promise that this money will be here by the end of Oct.............

[skyounkin]

47. You are

exactly the type of person that needs to be helped!

Not wall street.

[OKthatsIT]

48. I suggest we get rid of the Federal Reserve..FOR GOOD!

Just think of the revenue we would have...finally our taxes would go to real good, not the Feds tax interest scam.

[OakCliffDem]

50. K & R