How Safe Is My FDIC-Insured Bank Account? Well here is your answer.

09-05-2009 • BlueLoriBlogSpot

Your bank account may not be as safe as you think (or hope).I thought the FDIC has full faith and credit backing by the US treasury? Actually, no, it does not. The language in Section 14 of the FDIC Act is clear and unambiguous (emphasis mine): (a) BORROWING FROM TREASURY.-- The Corporation is authorized to borrow from the Treasury, and the Secretary of the Treasury is authorized and directed to loan to the Corporation on such terms as may be fixed by the Corporation and the Secretary, such funds as in the judgment of the Board of Directors of the Corporation are from time to time required for insurance purposes, not exceeding in the aggregate $30,000,000,000 outstanding at any one time, subject to the approval of the Secretary of the Treasury: Provided, That the rate of interest to be charged in connection with any loan made pursuant to this subsection shall not be less than an amount determined by the Secretary of the Treasury, taking into consideration current market yields on ou