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Posts Tagged ‘FDIC’

Know Your Consumer Financial Rights

May 21st, 2009 by Matthew C. Keegan | 2 Comments | Filed in Consumer Tips

An informed consumer is a wise consumer, but many Americans are not simply uninformed, rather they are misinformed when it comes to their financial rights. That is almost to be expected given inaccuracies pushed on the internet as well as a myriad number of laws on the local, state and federal level.

mortgagesThere isn’t enough space in this article to cover all fifty states and what laws may affect you, but on the federal level we can take a look at a number of laws on the books designed to protect the American consumer. As far as state and local laws go, check your city and state’s websites for consumer information pertinent to you.

Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation or FDIC ensures deposits for banks and is often the clearinghouse consumers use when seeking information about their financial rights.  While the FDIC is tasked with handling some complaints, other regulatory agencies oversee specific practices of banks, savings and loan institutions and credit unions.

And, with consumer complaints on the rise thanks to a difficult economy, finding the proper agency to deal with a problem is essential. Let’s take a look at some of the top consumers problems covered under federal law:

Electronic Funds Transfer Act — Also known as “Regulation E” this act was established in 1978 just as electronic transfer payments were taking root. Though not all transfers are covered, the act allows consumers to choose their own bank when accepting salary deposits as well as offering protection from creditors who may demand a payment via electronic transfer. Visit www.federalreserve.org for more information.

Fair Credit Reporting Act — Mistakes on credit reports can cause you to pay too much for a loan or miss getting approved for credit in the first place. This act puts restrictions on who can look at your credit report, offers consumers steps they can take to correct problems and requires confidentiality on the part of creditors. Recently, the act was amended to give consumers free access to their three major credit reports once annually. Visit www.ftc.gov for more information.

Fair Housing Act — Tenants, borrowers and home buyers cannot be discriminated against on the basis of color, race, sex, religion, handicap, familial status or national origin. Visit www.hud.gov or www.usdoj.gov for more information.

Truth in Lending Act — Finance charge and annual percentage rate information and certain other terms and costs related to credit must be disclosed in order to help consumers make sound choices when it comes to borrowing. This act also limits consumer liability if credit cards are lost or stolen. Visit www.fdic.gov or treas.gov for more information.

Each act offers redress for consumers who may think that they have a viable complaint. Visit the appropriate website for more information and instructions on how best to proceed.

Adv. — Credit cards can be an important tool to help you manage your family finances. However, they shouldn’t be used to pay for everyday expenses nor should you obtain a card with conditions that are not right for you.  Credit card selection can be done right online as can checking your credit reports for errors.


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What You Need To Know About The FDIC And Your Money

October 9th, 2008 by Matthew C. Keegan | 2 Comments | Filed in Consumer Tips

The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to provide deposit insurance for America’s banking system. Reporting directly to the federal government, the FDIC was put into place as response to the Great Depression-era bank runs. During that time, a simple panic would spark a run on a bank, quickly draining the institution of all of its Liberty Head Dollardeposits and making it insolvent. Millions of people lost all or part of their money, necessitating the creation of the FDIC to guarantee deposits.

Over the past month, the FDIC has been in the news quite a bit as the number of bank failures has increased, including some high profile failures involving Washington Mutual and Wachovia. In most cases the FDIC and other federal agencies have been able to resolve the crisis quickly, but not every customer has escaped unscathed.

Are You Covered Or Not?

There are limitations to the amount of money that the FDIC will ensure, meaning some customers risk losing a portion of their monies if they aren’t aware of the FDIC’s limitations. To clarify matters, we’re sharing with you current guidelines to help you determine whether your deposits are safe or not:

Up To $250,000 – Deposits are ensured up to $250,000, for all funds at one bank. This means that if you (as a single depositor) have $90,000 in a CD, $85,000 in a checking account, and $75,000 in a savings account, your funds are insured. Up until recently that level was $100,000, but has been raised temporarily through December 31, 2009.

Multiple Accounts At Multiple Banks – If you keep you money at several banks, your money is ensured provided your deposits at each institution stays below $250,000. This means that if you have $2,000,000 evenly divided in accounts at eight banks, your money is covered.

Joint Accounts – If you have a joint account at a bank, those funds are ensured up to $500,000. Even at that amount, you can still have accounts in your own name which will be insured for up to $250,000.

Retirement Accounts – Your Individual Retirement Account is covered by FDIC insurance under certain conditions. These include: regular IRAs, SEP IRAs, and ROTH IRAs. FDIC insurance will cover up to $250,000 of your retirement money at any one bank.

If you have over $250,000 at any one financial institution, you are putting those funds at risk. However, the FDIC says that you’ll likely recover a portion of those funds, perhaps 80-90% of the excess amount, but that process could take weeks to resolve.

Credit Unions Are Covered In A Separate Fund

If you have funds at a credit union, including regular deposits and retirement funds, those monies are insured too, but not by the FDIC. Instead, credit unions are covered by a separate agency – the NCUSIF or National Credit Union Share Insurance Fund – which recently received Congressional approval to cover individual deposits up to $250,000, just like the FDIC.

Of course, having your funds in any financial institution means keeping track of the performance of that bank or credit union by reviewing monthly statements and following the news. Even if your bank gets into trouble, the federal government is quickly jumping in and handling everything, bringing about super mergers virtually overnight.

(Source: FDIC)

Adv. — If you’re looking for additional consumer advice, please visit our sister site at SayLowerBills.com to find information about managing your income, handling debt, and other money saving tips.


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