I just got an email from the Federal Deposit Insurance Corporation (FDIC) — their new “Consumer Tip of the Week” starts today in coordination with their observance of National Consumer Protection Week (NCPW) March 7-13. Their first tip was issued today and I was curious and checked it out:
How to Make Sure All Your Deposits Are Protected by FDIC Insurance
If you (or your family) have deposits at one FDIC-insured bank with a combined total balance less than the basic maximum insurance amount under federal law – currently $250,000 through year-end 2013 – all of that money is fully protected. And, as always, you may qualify for much more than the standard maximum insurance amount at the same bank – perhaps millions of dollars of coverage – if you have funds in different “ownership” categories. That’s because the FDIC’s rules allow for separate $250,000 coverage for deposits held in your name alone (single accounts), accounts with one or more other people (joint accounts), accounts that name beneficiaries when you die (testamentary or revocable trust accounts), and certain retirement accounts, such as Individual Retirement Accounts (IRAs) … .
FDIC Consumer Tip of the Week, March 8, 2010, here.
Boy, that sure is helpful information for most consumers during one of the worst recessions in the country’s history. This is Consumer Protection Week. FDIC decides to begin providing consumers with information on a weekly basis to help protect them from predatory lending, dangerous loan products, unscrupulous brokers, hidden fees and charges, credit card ripoffs, expensive tax refund loans, financial scams?
Nope. Instead the very first tip to kick off this new consumer protection service is not relevant unless the family has way more than $250,000 in cash in some bank. Something tells me that it is the financial industry executives that have the greatest need for this information, and not 99 percent of the consumers of the nation. I am hopeful that this first tip is not an indicator of future ones.
These tips may also be viewed as a policy statement, not merely warnings to consumers. Lenders listen to the FDIC much more carefully than consumers I would imagine. Thus, a negative statement by the FDIC about a particular policy, practice, or product can have an impact on the marketplace. This new tip program should not just be about warning consumers; it should also be about warning the lenders about best practices in hopes there are changes. Weak tips are missed opportunities.
Frankly, I have been a fan of Sheila Bair, the chairman of FDIC. She once said: “I would hang my head in shame to get paid a lot of money when my bank did not do well.” Article here. This first tip however misses the mark. Let’s hope they get better. Unfortunately FDIC’s Foreclosure Prevention Tool Kit fails to adequately inform consumers of their rights (e.g., bankruptcy). See the ”Tool Kit” here. HUD’s is not much better. Article here.
Filed under: Kansas, National Foreclosure News
