We're seeing something about the insurance going up to $250,000. Any chance of this happening in the next few days? How are you handling this potential? Telling custs. to wait and see or still making lots of estate accounts, etc. to ensure coverage?

If such a change, how will you handle signage?

If I can trust the media, it is being considered in the Senate version of the bailout bill that possibly will be voted on tomorrow. I would not discuss it with customers. It's still too far off yet. The FDIC will give us plenty of help when and if signage changes are needed. Standby, as they say.

This is what I received in my daily email from the ICBA (notice it says a "temporary" increase - I'm not exactly sure how that would work). I agree that I would not discuss this with customers yet.

FDIC Seeks Temporary Insurance Limit Increase
The FDIC is asking Congress for temporary authority to raise deposit insurance limits. FDIC Chairman Sheila Bair is seeking to increase the $100,000 coverage limit on individual deposit accounts to help improve public confidence in the marketplace and financial institutions. The agency said it will leave to Congress what the new limit should be.

The increase would be included in the financial rescue package rejected by the House on Monday. Presidential nominees Barack Obama and John McCain and other policymakers have proposed raising the individual limit to $250,000 to calm depositors and potentially reach an agreement on the Treasury proposal. ICBA supports increasing deposit insurance limits and looks forward to working with the FDIC and Congress to make sure they are increased in a way that is fair and equitable for all community banks.

I might be really dumb on this issue, but I absolutely cannot see the advantage to this. In fact, I see it as a detriment to public confidence. It's almost as if the government is saying that FIs are very shaky right now, so let's up the coverage. Wouldn't that tend to make Joe Consumer a bit nervous?

And, as another poster said in a different thread - just where will that increase in dollars come from if a bank does fail?

What a mess we are in right now! The market doesn't know which way to go, the jobs situation is wobbly, housing sales are still down, even with mortgage rates staying low. It just doesn't look good.

The current limit of $100,000 was set in 1980. If you put that dollar amount in current dollars, it would be approximately $266,000. So basically I see this proposed increase as "catching up" to the affect of inflation.

To put it another way, if they had attached a cost of living increase rider to the limit, we would already be over the proposed $250,000.

If you visit the Senate Committee on Bank, Housing, and Urban Affairs web site, you can find a draft of the bill they will vote on tonight. http://banking.senate.gov/public/index.c...0&Year=2008

Once on this page, click on the first link. I just checked it and the draft bill is 451 pages. The House bill that failed was 110 pages. Pages 91- 93 of the 451 page document provides for a temporary increase from $100,000 to $250,000 effective upon enactment through 12/31/09.

If this is approved by the Senate tonight, we'll have to see what happens with the House vote on Thursday. If all gets approved and the President signs it into law, we'll then have to figure out what happens when the expiration date arrives. Will Congress enact other legislation down the road to permanently change the limits to something between $100,000 and $250,000? I know there was something issued a while back that provided for adjusting the limits based on inflation.

Just FYI--the bill is 451 pages because there is a tremendous amount in there about oil, gas, foreign tax incentives, etc. I am amazed at what is in there when I did a search on key words, such as incentives, foreign, tax, oil, gas, coal, etc.

Temporary increase That sounds great! Hey now your covered...... guess what? now your not! It was just temporary. Gotcha!

Whoo hoooooo! You've got that extra coverage for just shy of 3 months! They must expect all the bank failures to occur between now and the end of the year. It may possibly give some of us some breathing room though - I could probably calculate FDIC coverage in my sleep!

The date is 2009, not 2008.

MarkB

Thank you - my brain is fried with trying to interpret the new living trust laws for folks!

Marnie - I heard that the only way that the Senate could vote on the bill before the House was to add some other items to the bill - that is why it is such a conglomeration of stuff....isn't it interesting how the government works....

The next few days should be interesting.......

Yes, they are called tax extenders, and were added to sweeten the deal. But honestly, a tax break for a wooden arrow company?


http://www.msnbc.msn.com/id/26993487

This passed today. FDIC ins is now at the temp limit of 250,000.

The FDIC posted a FIL that indicates we can order stickers from them or use our own materials to post specific wording referenced in the FIL about the changes. There is also a one page document attachment that it says you can print and display in your offices. Here's a link to the FIL. http://www.fdic.gov/news/news/financial/2008/fil08102.html

There is a thread on this in the Deposit forum also. I posted similar information there.