In 2009, Scott Pelley was granted access to the FDIC’s takeover of Heritage Community Bank in a Chicago suburb.
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LEARN MORE ABOUT: Bank Failures
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The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the federal government that was created to ensure the stability and public confidence in the nation’s banking system. It was established in 1933 in response to the bank failures that occurred during the Great Depression. Today, the FDIC is responsible for insuring deposits in banks and thrift institutions up to $250,000 per depositor, per insured bank.
When a bank fails, the FDIC steps in to protect depositors and maintain the stability of the banking system. The agency’s primary mission is to protect depositors by reimbursing them for their insured deposits. The FDIC also takes over the failed bank’s assets and liabilities, and the accounts are transferred to another bank or thrift institution. Depositors do not need to take any action as the FDIC handles the transfer of accounts.
The FDIC typically pays depositors within a few days after the bank fails. Depositors with uninsured deposits, above the $250,000 limit, may not receive all of their money back. However, the FDIC may pay a dividend on the failed bank’s remaining assets in the future, and uninsured depositors may receive a portion of that dividend.
The FDIC is funded by premiums paid by insured banks and thrift institutions. The premiums are based on the amount of insured deposits and the risk profile of the insured institution. Banks and thrift institutions are required by law to participate in the FDIC’s insurance program.
The FDIC also plays a key role in preventing bank failures. The agency conducts bank examinations to ensure that institutions are operating in a safe and sound manner. The FDIC also provides resources and guidance to help troubled banks and thrift institutions return to profitability.
In conclusion, the FDIC plays a crucial role in maintaining public confidence in the banking system. Through its insurance program, the agency ensures that depositors are protected in the event of a bank failure. The FDIC also works to prevent bank failures and promote the stability of the financial system.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks.
The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system.
More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common.
The insurance limit was initially US$2,500 per ownership category, and this was increased several times over the years.
Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category.
FDIC insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".
The FDIC is not supported by public funds; member banks' insurance dues are its primary source of funding.
The FDIC charges premiums based upon the risk that the insured bank poses.
When dues and the proceeds of bank liquidations are insufficient, it can borrow from the federal government, or issue debt through the Federal Financing Bank on terms that the bank decides.
As of September 2019, the FDIC provided deposit insurance at 5,256 institutions.
As of Q3 2022, the Deposit Insurance Fund stood at $125.5bn with annual Assessment Revenue (insurance premiums) of $8.1bn (12 months to Q3 2022).
The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages receiverships of failed banks.
Quarterly reports are published indicating details of the banks’ financial performance, including leverage ratio (but not CET1 Capital Requirements & Liquidity Coverage Ratio as specified in Basel III).
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So..this was made in 2009 which means the media is now just regurgitating old, fearmongering broadcasts to emotionally manipulate and exhaust the public into a state of learned helplessness. Gotcha.
Happy our government is tyrannical!!!
Greatest con ever the fed prints money charge hi interest rates than the fdic come in and freeze the money the banking system is a scam
I'm really worried about the current bank crisis. If a bank as big as SVB could fail, I fear for a lot more. I know a friend who is running a high-growth startup, and was badly hit by the bank run. I have pulled out more than $340k from my bank. After all, the FDIC covers only up to$250,000, and the implosion could have bad effect. Looking to invest into the stock market now. Does anyone know how I could go about it?
The FDIC isn't necessarily your friend. This is an insurance corporation. Insurance corporations settle with people in general. People believe their deposits are insured up to $250,000 which is true but if a whole buttload of banks fail the FDIC will give a percentage of your deposits. You won't be necessarily covered dollar for dollar but be compensated cents on the dollar.
Investment in a bank is not insured if their bank fails.
Another blow is most banks only allow you to withdraw a set amount of your money. This is written into your terms you signed. You will discover you can't withdraw all your money in one lump sum.
This video IMHO is posted to quell anxiety and stop bank runs..right toward the end of this video he mentions 80% which I believe is only wishful thinking. It could be tiered or set but 80% is high..it would be more like a 25% settlement.
If you can't touch it you don't own it.
As long as Trump continues to think he will run we are locked in for a Democrat win. I thought this whole time that Trump will be charged by the time 2024 comes around after he got DeSantis out of the way. DeSantis has a better chance at winning the president election than Trump. We need this Republican War to continue. If they were to all team up would be a problem.
This is terrible news. Customers are not going to have any confidence in small banks and will be forced to work with the big oligopoly banks
Omg if this keep happening the U.S. dollar will keep loosing its value and prices will keep going up because of inflation .
We the tax payers have to pay for this it’s BS
Unbelievable….
I wonder who gonna bail out th e ordinary poor ppl huh???
This is an amazing video! How informative.
Get out of debt. Diversify ur accounts. Prepare for the worst. Live like there’s no tomorrow on whatever’s leftover
Is this a Ponzi scheme?
What happens if we go to war & the war is on our soil in the US?
I'm sleeping on the porch on LA Brea. I mean Highland just about sunset and And developing a hammer toe. From the boogie man
Is that a national Park what time does the toilet paper generally run out