Friday, September 26, 2008

Increase FDIC insurance limit from $100,000 to $500,000 will prevent most bank fail.

Contact your Senator or House Rep to pass a bill to raise FDIC insurace limit from $100,000 to, say, $250,000 like IRA or even better $500,000 ($100,000 was set in 80's and not adjusted with inflation. This will prevent hundreds of banks from failure? Why?

1. Washington Mutual, the largest saving and loans just failed due to $16.7B deposit writhdrawn in last 9 days from account over $100,000. If the FDIC limit were $500,000, this amount should be reduced dramatically, and WaMu will not fail at the first place.

2. With higher amount of FDIC insurance, FDIC could levy more insurace fee from all 8,500 banks, and many healthy banks could contribute more to cover hundreds of weaker banks. The fund shall be increased from current $45B level.

If you believe you love this country and would like to help, you want to act now. Be creative and innovative, if you can not reach your House Rep or Senator, try your mayor or governor or your bank branch manager or CEO, or forward this to all your friends and colleagues.

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