Bill Seeks to Let FDIC Borrow up to $500 Billion

[The Master]

Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury secretary and White House agree such money is warranted. The bill would allow it to borrow $100 billion absent that approval. Currently, its line of credit with the Treasury is $30 billion.

Last week, the FDIC proposed raising fees on banks in order to build up its deposit insurance fund, which had just $19 billion at the end of 2008. That idea provoked protests from banks, which said such a burden would worsen their already shaken condition. The Dodd bill, if it becomes law, would represent an alternative source of funding.

Mr. Dodd's bill could also give the FDIC more firepower to help address "systemic risks" in the economy, potentially creating another source of bailout funds in addition to the $700 billion already appropriated by Congress.

Mr. Bernanke said in a Feb. 2 letter to Mr. Dodd that such a "mechanism would allow the FDIC to respond expeditiously to emergency situations that may involve substantial risk to the financial system."

The FDIC would be able to borrow as much as $500 billion until the end of 2010 if the FDIC, Fed, Treasury secretary and White House agree such money is warranted. The bill would allow it to borrow $100 billion absent that approval. Currently, its line of credit with the Treasury is $30 billion.

The FDIC's deposit-insurance fund has fallen precipitously with 25 bank failures in 2008 and 16 so far in 2009. Some bank failures have a bigger impact on the fund than others, as IndyMac's failure cost the fund more than $10 billion, while many others cost the fund less than $100 million.

A 1991 law generally caps the amount of money the FDIC can borrow from the Treasury at $30 billion, and the FDIC hasn't borrowed money from the Treasury in more than a decade.

Ms. Bair said a change in the law would give the FDIC more options to determine the best way to rebuild its depleted fund. In an interview, she stressed that all insured deposits were already backed by the "full faith and credit of the United States government."

A change in the law would ease "the mechanics of how seamlessly we can access our lines of" funding. "I'm the kind of person that likes to be prepared for all contingencies," she said.

[The Master]

So to prevent a run on the banks we will just print up the money and loan it to the FDIC?

So now we are not only bailing out the banks, but the FDIC as well, boosting the $30 Billion credit limit to $500 Billion!

Where are they getting these figures from? Who decided that $500 Billion is enough? Well in this case it's our old friends from the Federal Reserve and the new Sec. of Treasury.

Better yet, how does this money get paid back? The FDIC charges fees to the banks who haven't closed down which then is passed to the consumer?

It seems that this measure to protect the savings of American Citizens is really just another tool by the Money Movers to devalue what little wealth there is left among the average Joe by further weakening of the dollar while at the same time collecting monumental amounts of interest on all this newly formed money that did not exist at this time last year.

Welcome to the devaluation of the dollar and the COLLAPSE of America. These failed New Deal policies continue to haunt us to this day. Just think the big Zero wants to renew this ideology.

[winkyhead]

lol, I saw on the "news" earlier where they were showing him promoting stem cell research and talking about saving some policeman their jobs with his new bill. I wonder if I can get a $500 million loan to save whatever I feel needs to be saved at my house. I'm good with paying my stuff off. Perhaps, I should get a ridiculous amount of money loaned to me. LMAO Sad how they give these companies so much money with no explanation as to how the number came about.

....."We have to give them enough so that the top execs at the firm may wipe their buttocks with the extra cash, because everyone should know how that feels."

............

[Deepskyy]

Ok... so in a nutshell, we are raising the credit limit on an out of control spender...
Didn't we see this movie already, and isn't it part of the reason why we are in this mess already. We gave easy credit and fast money to anyone who asked for it for CCs, Home Loans, Car Loans, whatever, and when people couldn't pay the interest all hell broke loose. Why on earth would we apply this principle to the federal government?

[The Master]

Because it is the great NEW NEW Deal plan that the great zero has come forth with. Spend money like there is no tomorrow, causing the economy to collapse, the markets to collapse (great buying opportunities...dont let others say otherwise), the faith of the people to collapse.

I hate the fact that the great zero still has a high approval rating. I figured by now that it would have dropped.

What really gets me is that this news bit takes less precedence than the faux paux that Clinton had with the stupid little button bs today with the Russians.

[assdragginsdime]

i'm Just waiting for the dollar to collapse. Its coming.. Better stock up on gold, silver, ect.

[The Master]

It has already started. Unfortunately.

Problem with stocking up on either is what size denomination are you going to use? Gold will be good, but silver would be better. I wont say what I have here as that would be stupid. I do however also look at what will be used for bartering.

I am thinking cigs and toilet paper. Some people say alcohol, but hell, anyone can make some hooch. It is not that hard. lol