Bank Deposits Guaranteed Up to $250,000 – Maybe

Money!Congress created the Federal Deposit Insurance Corporation (FDIC) in 1933 to ensure taxpayers were not on the hook for losses to depositors.

Today, FDIC stickers in every bank in America proclaim “Each depositor is insured to at least $250,000.”

 Is it possible for bank depositors to take losses on their deposits? Yes.

 Banks insure their own deposits through contributions to an insurance fund. Banks and the general public both falsely believe that the government will “pony-up” the cash if the insurance fund is depleted and protect taxpayers from a loss on their deposits.

However, Congress has never enacted a provision in law stating that insured deposits are guaranteed by the full faith and credit of the United States.

Congress has never legally guaranteed deposits.

Congress wants people to have “confidence” in the banking system and adopted a joint resolution in 1982 stating that it was the “sense of Congress” that insured deposits were backed by the credit of the United States. However, this resolution never became legal binding.

Henry Steagall, chairman of the House Banking Committee described the situation succinctly “I do not mean to be understood as favoring a government guaranty of bank deposits,” he said. “I do not. I have never favored such a plan.”

Let’s hope the banking and government-debt crisis in Cyrus doesn’t happen in the United States.

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About Dunne Law Offices, P.C.

Philadelphia Bankruptcy Attorney You may see chapter 7 or chapter 13 as a last resort. But with proper financial planning and legal advisement on your side, bankruptcy can be the moment when you regain control of your finances. I want to support you with all the legal expertise, experience, creativity and deductive reasoning I have to give. My life has been dedicated to developing the skills and experience that allow me to help you navigate financially difficult times. Education As an undergraduate at Pennsylvania State University, I served as an infantry soldier in the Pennsylvania National Guard and as a cadet in the R.O.T.C. My major in Criminal Justice led me to attend the New England School of Law in Boston. Once there, I honed in on bankruptcy law and was a scholarship recipient for “Securities Regulation.” I followed that with an internship at the Boston Stock Exchange and a clerkship for McGarthy & Ged. During this time, I learned how to help people find financial relief through legal action. Professional Memberships and Recognition Bankruptcy law changes every day. Right now, courts across the United States are making decisions that will impact your judge’s point of view on your case. As an effective consumer bankruptcy lawyer, I stay apprised of the most recent happenings in the field through active membership in the following organizations. State Bar of Pennsylvania – Licensed to practice before all state courts, the United States District Court for the Eastern and Middle District of Pennsylvania, as well as the United States Court of Appeals for the Third Circuit National Association of Consumer Bankruptcy Attorneys (NACBA) National Association of Consumer Advocates (NACA) Call for a free consultation at (215) 551-7109.
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