Will Your Savings Be Safe in 2014?
June 01, 2010
Before the financial crisis blew up two years ago and bank failures became a routine news item, you might not have thought much about FDIC insurance.
So it's easy to understand how thousands of IndyMac Bank customers were caught underinsured when the bank failed in July 2008. At that time, the FDIC insurance limit was $100,000 per depositor, per financial institution. Just three months later, Congress raised the limit to $250,000, now in effect through 2013, but the action was too late for IndyMac customers, who lost $266 million.
Now, though, there's hope for IndyMac customers. Two Southern California Congress House members, Reps. David Dreier (R-San Dimas) and Jane Harman (D-Venice), have introduced an FDIC-backed bill to extend the $250,000 limit retroactively to banks that failed starting Jan. 1, 2008. IndyMac was the largest of six banks that failed in 2008 before the $250,000 limit was in place, the LA Times reported.
Long-Term CD Investments: Will They Be Within the New Limit?
"Their losses were no less difficult and no less tragic than those that occurred later that same year," Dreier said in a media statement. "It is only fair that the families and small business owners who kept their savings with IndyMac receive the same protection as those who lost funds at other financial institutions but were covered by the higher deposit insurance amount."
The IndyMac story is a good reminder to review whether your certificates of deposit and money market, savings and checking accounts are within the current FDIC insurance limit at each of your banks and whether they'll still be safe when the limit is scheduled to revert to $100,000 Jan. 1, 2014. Keep the lower limit in mind now as you invest in longer-term CDs that will mature in 2014 and beyond.
Agnes Huff
2 June 2010 at 3:02 pm
Sincere thanks to Reps. Dreir and Harman for recognizing and being willing to step up to changing the unfair treatment of Indymac depositors. As a depositor, I want to also share some learning I had last night since your savings can never be too safe.
I had some accounts at Wachovia which was taken over by Wells Fargo and they were in the trust. Just found out last night that the conversion does not automatically put your accounts in the trust - so depositors beware and check and double check your statements. Assume nothing!! Be safe.
c eckhart
2 June 2010 at 1:36 pm
Thank you for keeping abreast of the plight of IndyMac depositors who lost their personal savings.
As you know, One West Bank bought IndyMac & numerous subsequent failed banks... One West recently opened a very posh new bank & building which is a few blocks of the Pacific Ocean in Redondo Beach, CA.
Buying "failed" banks is profitable for failed bank buyers, not the individual depositors who once trusted. (The best way to rob a bank is to own a bank.)
Linda Stafford
2 June 2010 at 10:30 am
Thank you for bringing attention to the plight of us IndyMac uninsured depositors. Many of us were misled about how much our account was insured for, and misinformed about how to set up the account (as to the vesting). We hope the bill passes and that we can recoup OUR money.
Tom
1 June 2010 at 5:33 pm
As one of those Indymac depositors that lost money I appreciate your article. I agree you have to be very careful with your money, but probably 90% of the depositors that lost their savings were not under insured, rather we were told by the bank we were fully insured using our children as beneficiaries. As you probably know, a husband and wife and two children can now be insured for a million dollars. Unfortunately, the banks did not understand the confusing rules regarding FDIC insurance, and the FDIC will take zero responsibility.
gina
1 June 2010 at 4:56 pm
Congragulations to Jane Harman and David Drier for their hard work and efforts for the people and justice.We Depositors set up our Savings Accounts as per instructions from IndyMac Bank Agents and Branch Managers with complete assurance that they were FULLY insured. We wanted security and chose not to speculate with our money, trusting that our government would honor their mandated commitment .
The FDIC changed their rules after IndyMac to stem a massive Depositor panic and “Bank Run”, but did not make thes changes retroactive.
This will be a major Godsend for all the people devastated by losing their savings.