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FDIC 2017 survey of Unbanked and Underbanked households:
6.5% of US households do not have a checking or savings account. That's 8.4 million households.
18.7% of US households are underbanked. That's 24.2 million households that have a checking or savings account, but purchased financial products or services outside the banking system.

Your one-third of US adults not having a bank account is not an accurate number - it can't be. It's non-sensical.

The FDIC puts the number at less than 7% in 2017:

Estimates from the 2017 survey indicate that 6.5 percent of households in the United States were unbanked in 2017. This proportion represents approximately 8.4 million households. An additional 18.7 percent of U.S. households (24.2 million) were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system.

Source: FDIC Survey

Did you even think about the reality of your claim that 1/3rd of US adults only have the cash in their pockets, pay fees to cash government aid/payroll checks, and settle all their debts in cash/money orders?

FDIC is supported by the banks themselves, they pay for it's insurance.

Risk Management of Free and Open Source Software

Well, you can look for yourself at the number of bank-holding corporations here: https://www5.fdic.gov/idasp/ad.... This article https://en.wikipedia.org/wiki/... puts the number of FDIC-insured commercial banks at ~6800. I am guessing their customers are the ones "still using banks".

Here's a list of 547 banks that have failed since 2000.

Maybe it's just the ones that didn't donate enough to those in political power. You know... the ones that weren't too big to fail.

You can quote one of the most partisan NY Times columnists all you want, but Reagan:
A. Presided over one of the best economies in modern times.
B. Never advocated for anything called "trickle-down economics"
C. Reagan deregulation didn't cause the S&L crisis.

I think the "low cost of living" is relative to San Francisco, New York, and Los Angeles. The author of this article specifically left San Francisco, which seems to me to be the absolute worst in terms of cost of living.

My cousin lives in Denver. He's been trying to buy a condo. He's been noticing that things go for asking price, or above. He walked away from a condo deal, at asking, because of a totally messed up Home Owner's Association. He'll have to keep looking, but he's feeling a lot of pressure to move quickly due to increasing prices.

I live in Albuquerque, New Mexico. I bought some apartments while in graduate school, working as an intern. Granted, the bank that gave me a loan was shut down for giving too many irresponsible people loans, but I haven't had any problems. My point is, that in a place like Albuquerque, with a very good university and national labs close by, the cost of living is insanely low compared to basically anyplace except rural America, or post-apocalyptic wastelands like Detroit. People that work relatively low-skilled jobs (waiters, waitresses) can buy houses and start families. The lack of existing infrastructure is a HUGE opportunity for people building companies.

" That means if they went under right now, their creditors, including depositors, would get 5 cents on the dollar."

A little misleading. Everyone is covered by the FDIC, which I believe covers $250k per person. So if they "went under" it would be significantly more of an issue then the bank failure (or being out of trust).

https://www.fdic.gov/deposit/d...

From my perspective, there isn't anything truly innovative here. It's more like a business process that shouldn't be patentable. Banks already do some of this within their environments with targeted programs based on their customer's level of credit worthiness.

Because that's a big part of the purpose of having banks.

What's so different between the banks and Apple?

Ooh, I know this one:

https://en.wikipedia.org/wiki/...

https://www.fdic.gov/

https://en.wikipedia.org/wiki/...

Well in the U.S. context that would mean being able to operate outside the existing laws for banking and electronic funds transfer
https://www.fdic.gov/regulatio...

Personally I am a little leery of bankers innovating after 2008

And how is this any different from a real bank? Do you really think your bank has the cash on hand to close every deposit account? (answer: hell. no.) The cash plus debts owed to them (aka the loans they've made with your money) should (and for any healthy bank, does) exceed deposits. If everyone closed their account(s), the bank would default, and [in the US] the Fed (FDIC) would have to step in to cover the mess (up to the FDIC limit of $250k)

Except the IRS has declared that bitcoin is property, not currency.

Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency.

and

http://www.irs.gov/uac/Newsroo...

The money laundering statute applies to the below:

(4) the term âoefinancial transactionâ means
(A) a transaction which in any way or degree affects interstate or foreign commerce involving
(i) the movement of funds by wire or other means or
(ii) one or more monetary instruments, or
(iii) the transfer of title to any real property, vehicle, vessel, or aircraft, or
(B) a transaction involving the use of a financial institution...
http://www.law.cornell.edu/usc...

Note that "real property," is real estate, not any personal property whatsoever, and the term "monetary instrument" is likewise defined by the FDIC:

Monetary instruments.
(1) Monetary instruments include:
(i) Currency;
(ii) Traveler's checks in any form;
(iii) All negotiable instruments (including personal checks, business checks, official bank checks, cashier's checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee (for the purposes of Sec. 1010.340), or otherwise in such form that title thereto passes upon delivery;
(iv) Incomplete instruments (including personal checks, business checks, official bank checks, cashier's checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) signed but with the payee's name omitted; and
(v) Securities or stock in bearer form or otherwise in such form that title thereto passes upon delivery.
http://www.fdic.gov/regulation...

So yes, there are very different regulations depending on whether bitcoin is or is not currency. Absent legislation specifically addressing "virtual currency," the courts will have to hash out this disagreement, which is what will happen here, I'm sure, but I think it's regrettable that someone can be punished for law that isn't yet decided. If I drive 55, should I be punished for skirting speeding laws? Are racetracks circumventing legislation against street racing? The problem with calling this money laundering isn't that this guy is punished (if he's guilty of running the Silk Road); it's that it opens up a whole other class of individuals for prosecution just because they were using bitcoin to conduct transactions -- namely everyone who conducts transactions in bitcoin.

Some merchant categories that have been associated with high-risk activity include, but are not limited to:

Ammunition Sales Cable Box De-scramblers Coin Dealers Credit Card Schemes Credit Repair Services Dating Services Debt Consolidation Scams Drug Paraphernalia Escort Services Firearms Sales Fireworks Sales Get Rich Products Government Grants Home-Based Charities Life-Time Guarantees Life-Time Memberships Lottery Sales Mailing Lists/Personal Info Money Transfer Networks On-line Gambling PayDay Loans Pharmaceutical Sales Ponzi Schemes Pornography Pyramid-Type Sales Racist Materials Surveillance Equipment Telemarketing Tobacco Sales Travel Clubs

...

Appropriate Supervisory Responses

In those instances where examiners determine that a financial institution fails to have an adequate program in place to monitor and address risks associated with third-party payment processor relationships, formal or informal enforcement actions may be appropriate. Formal actions have included Cease and Desist Orders under Section 8(b) or 8(c) of the Federal Deposit Insurance (FDI) Act, as well as assessment of Civil Money Penalties under Section 8(i) of the FDI Act. These orders have required the financial institution to immediately terminate the high-risk relationship and establish reserves or funds on deposit to cover anticipated charge backs.

As appropriate, the examiner will determine if financial institution management has knowledge that the payment processor or the merchant clients are engaging in unfair or deceptive practices in violation of Section 5 of the Federal Trade Commission Act. In those cases where a financial institution does not conduct due diligence, accepts a heightened level of risk, and allows transactions for high-risk merchants to pass though it, it may be determined that the financial institution is aiding and abetting the merchants. This also could indicate a disregard for the potential for financial harm to consumers and, as a result, the financial institution may be subject to civil money penalties or required to provide restitution.

The reason it gives people confidence is because it is the FEDERAL Depositors Insurance Corporation.

Is that why people pay so much more to send letters by FEDERAL Express rather than trusting the US Postal service to deliver important papers on time?

You say the bitcoin exchanges could set up the same kind of system, but why should anyone trust something set up by them? What, exactly, makes this insurance company any more reliable or trustworthy than the exchanges themselves?

Maybe because they are NOT run by the federal government?

I guess you haven't noticed how the federal government has sided with the private banks over and over again in recent years, huh? Now you think people are supposed to suddenly trust them to be on their side?

In fact, people are right to be skeptical about promises by the FDIC. We've already seen bank deposits being confiscated in the EU, and in fact the FDIC has contemplated plans to do something similar American depositors if they deem it "necessary". You might want to check out this PDF from the FDIC's website. Keep in mind that a depositor to a failed bank is considered an unsecured creditor in common law.

Ah, but it's in the terms of service. And those have been upheld by the courts.

Which means people who lost money in this are out of luck, because all they really claim is they'll do their best effort but otherwise make no guarantees about their ability to do anything.

To be fair, you'll see similar language when you sign up for a US bank account with any bank that stores Federal Reserve Notes and their electronic versions for you. The only difference is the FRN banks pay for "insurance" with the FDIC. If anything happens to your deposits (up to a certain limit), then the FDIC insurance pays out to cover it.

The Bitcoin exchanges could set up the same kind of system themselves, and there is not need for it to be a government-run insurance system. The FDIC is a corporation funded entirely by private banks.

These guys aren't banks, and your deposits with them aren't FDIC insured. This is why where there's some bank robbery, I'm not concerned how much money they tank. The bank's customers' money is safe.

If a real bank stored my bitcoins, then it's not a problem if they're stolen since the deposits are insured. However, with these fly by night operations, you're no better off then using a safe in your basement (or in someone else's).

Until these crypto currencies are insured, I'm not touching them.

(and guarantees by government are usually only up to 30-50 000 dollars worth anyways)

but would I trust even the shoddy fly by night exchanges more than say the government of venezuela ? heck yea...

In the U.S. accounts are insured up to $100,000.00. Banks usually will setup new accounts for folks when their accounts reach $100,000.00 and are about to go over. So, if you have $500,000.00 in a U.S. bank it's usually spread over multiple accounts so the entire amount is insured. So, yes, I would very much rather the bank held my money than my mattress or some dubious "exchange".

Back when inflation was 10+% and US savings accounts were legally capped at 5.25%, you could put your money in a European bank and get real interest, but no insurance: "Eurodollars"

Right, but even then dollars were MUCH more stable currencies than bitcoin. If I were a bank I wouldn't touch bitcoin with a barge pole. There is a reason banks tend to avoid foreign currencies with high inflation or heavy volatility. Very hard to make money.

Banks fail far less frequently than home-made BtC exchanges in recent decades.

Umm, banks fail all the time. Much more often than most people are aware.

Maybe this will be an object lesson for the libertarians (a very expensive lesson, for some of them). In the real financial world, we used to have "bank panics" all the time. People could lose their life savings if a bank was run poorly or crookedly. Worse, if there was a recession, people were more likely to need their money immediately, so they'd go to the bank to withdraw it – but of course a large portion of deposits had been loaned out and weren't immediately. And since people knew this could happen, they'd rush to withdraw their deposits at the first sign of trouble, since they didn't want to be the one left out in the game of musical chairs. These "bank panics", then, could happen even to well-run banks, and they made recessions far worse than they might otherwise have been. During the 19th century, the U.S. economy was repeatedly devastated by bank panics.

Finally, after the Great Depression and the mother of all bank runs, the government stepped in, because the "free market" obviously wasn't working well in this area and really never had. The answer was to create the Federal Deposit Insurance Corporation (FDIC), funded by insurance premiums charged to banks. This ensured that even if a bank did go broke, the FDIC would reimburse depositors up to a certain amount (originally $2,500, but now a quarter of a million dollars). Stockholders might be wiped out, but depositors would be made whole. As intended, this reform restored confidence in the U.S. banking system. There have been quite a few failed banks that went broke, but people with checking or savings accounts at those banks still get their money back.

But didn't that lead to "too big to fail"? Not really. The whole point of the FDIC is that you can let a bank go broke, let the stockholders be wiped out, sell the bank assets at auction, and the federal insurance will make sure the regular depositors – who didn't sign up for extra risk – will get their money back anyway. So why didn't that happen in 2008? It's extremely complicated, but it basically has to do with the repeal of Glass-Steagall. This was legislation passed in 1933 that basically said because banks are federally insured, risky investment activities have to be cordoned off into separate businesses from ordinary consumer banking. In other words, you weren't supposed to be able to run a bank, gamble on risky high-yield investments with the deposits, and then go running to the federal government for a bailout when things went south. They didn't want bankers privatizing profits and socializing costs. But that law was repealed by Phil Gramm in the 1990s. As a result, everything got intermingled – we had massive insured deposits being used to gamble on derivatives that no one understood, and everything was linked to everything else in such a way that one false move would bring the whole house of cards tumbling down. The fear was that if there was not a general bailout for the investment banks (not covered by FDIC) then the whole economy would collapse. Whether that argument was sensible or just self-serving, it's what happened. Since then there have been several attempts, only partially successful, to rein in the exuberant activities of Wall Street to try to stop this from happening again.

Now back to Bitcoin. People in Mt. Gox thought they were keeping their money in a bank. Well, they were – a pre-1933 bank, with no insurance and no guarantees. There was a de facto bank run on Gox a couple months ago, and now it's gone bust and everyone has lost everything. And the libertarians didn't see this coming because they thought FDR was the devil and that all banking regulations are unnecessary.

The new meme on Reddit seems to be that you need to keep your coins in "cold storage" – if you keep them on an exchange and something bad happens, you have only yourself to blame. Imagine the financial papers saying that you can't trust the banks, so y

Because here's the trick: Bank of America has insurance, and I'm willing to be that Target has some too. So they would never be put in a situation of making their employees suffer for their blunders.

In fact, people whose credit card and debit card information has been stolen likely will have a less stressful time getting their money back, because all they have to do is report the charges as fraudulent, and then it gets stored out between the banks and Target. I have zero liability.

Funny, suddenly corporate capitalist America seems downright responsible, and doesn't resort to abusing their employees.

Basically they are doing more than a bank would do...(banks only return a limit amount unless you are paying for platinum type accounts)

Nnnooooooo.... banks are typically insured for FDIC, which all deposits up to $250,000. In the case of a credit union, NCUA also covers up to $250,000. That keeps your money safe if someone steals your debit card information, robs the bank, or if the bank collapses. It's insurance: the insurer pays out. The bank doesn't have to do a thing.

Now if you're putting more than $250,000 into a single account under a single ownership category, that's your own fault for not doing due diligence and taking appropriate steps to insure your money. Through different types of accounts you can set aside $1.5 million under FDIC protection. You can get private deposit insurance in many areas, like the Depositors Insurance Fund in Massachusetts. That's the kind of thing you would talk to a weather management adviser about, and if you're socking away more than $1.5m, something tells me you can afford (and probably can't afford not) to hire an adviser to protect that money and cover any associated expenses.

This is all publicly available information. It's not like these $250,000 limits on FDIC/NCUA coverage is done in some kind of fine-print method meant to swindle people out of their hard earned cash. Hell, I don't even have to lift a finger if something happens to my deposits at my credit union. I just get my money back. The rest is between the credit union and NCUA.

Define 'protected'.

Well, according to the Visa and MasterCard contracts you sign, you, the consumer, are not liable for fraudulent or unauthorized usage of your credit card credentials. Here's Visa's statement and here's MasterCard's. Just for fun, here's Discover and American Express's, both of which promise zero liability if you act like a rational human being. And since 1998 the FDIC covers about $250,000 in losses relating to your bank account, including unauthorized use of your ATM card. So looking at all of those liability statements, since the data breach was not the result of gross negligence on the part of the cardholder, the cardholder is not liable for any fraudulent charges made in their name.

Furthermore if anyone steals my credit card, bank card, ATM card or card information, or if something happens to the bank, like a robbery or the bank folds (provided my bank is FDIC insured, of which nearly 7,000 banks are): I, the consumer, am not liable. Either my credit card company knocks it off my bill (in the case of credit card fraud) or the Federal Government covers the losses up to $250,000 per bank (in the case of ATM card fraud or bank losses).

Those are all legally binding contracts in the United States. The European Union has similar systems in place, and has had deposit insurance since 1994, though that just covers the minimum coverage mandated under EU regulations (current minimums are €50,000, as of 2008, more information here). Most countries cover up to €100,000, including Belgium, Bulgaria, Cyprus, the Czech Republic, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Portugal, Spain, Sweden, and Slovakia (among others). The UK covers up to £85,000 in a rather complicated scheme of percentages, and the Irish government will guarantee all the money in your bank accounts.

Certainly seems safer than putting your money in an escrow account controlled by a marketplace known for its illicit drug trade, and whose predecessor was taken down amidst a murder-for-hire scandal.

Define 'protected'.

Well, according to the Visa and MasterCard contracts you sign, you, the consumer, are not liable for fraudulent or unauthorized usage of your credit card credentials. Here's Visa's statement and here's MasterCard's. Just for fun, here's Discover and American Express's, both of which promise zero liability if you act like a rational human being. And since 1998 the FDIC covers about $250,000 in losses relating to your bank account, including unauthorized use of your ATM card. So looking at all of those liability statements, since the data breach was not the result of gross negligence on the part of the cardholder, the cardholder is not liable for any fraudulent charges made in their name.

Furthermore if anyone steals my credit card, bank card, ATM card or card information, or if something happens to the bank, like a robbery or the bank folds (provided my bank is FDIC insured, of which nearly 7,000 banks are): I, the consumer, am not liable. Either my credit card company knocks it off my bill (in the case of credit card fraud) or the Federal Government covers the losses up to $250,000 per bank (in the case of ATM card fraud or bank losses).

Those are all legally binding contracts in the United States. The European Union has similar systems in place, and has had deposit insurance since 1994, though that just covers the minimum coverage mandated under EU regulations (current minimums are €50,000, as of 2008, more information here). Most countries cover up to €100,000, including Belgium, Bulgaria, Cyprus, the Czech Republic, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Portugal, Spain, Sweden, and Slovakia (among others). The UK covers up to £85,000 in a rather complicated scheme of percentages, and the Irish government will guarantee all the money in your bank accounts.

Certainly seems safer than putting your money in an escrow account controlled by a marketplace known for its illicit drug trade, and whose predecessor was taken down amidst a murder-for-hire scandal.

Define 'protected'.

Well, according to the Visa and MasterCard contracts you sign, you, the consumer, are not liable for fraudulent or unauthorized usage of your credit card credentials. Here's Visa's statement and here's MasterCard's. Just for fun, here's Discover and American Express's, both of which promise zero liability if you act like a rational human being. And since 1998 the FDIC covers about $250,000 in losses relating to your bank account, including unauthorized use of your ATM card. So looking at all of those liability statements, since the data breach was not the result of gross negligence on the part of the cardholder, the cardholder is not liable for any fraudulent charges made in their name.

Furthermore if anyone steals my credit card, bank card, ATM card or card information, or if something happens to the bank, like a robbery or the bank folds (provided my bank is FDIC insured, of which nearly 7,000 banks are): I, the consumer, am not liable. Either my credit card company knocks it off my bill (in the case of credit card fraud) or the Federal Government covers the losses up to $250,000 per bank (in the case of ATM card fraud or bank losses).

Those are all legally binding contracts in the United States. The European Union has similar systems in place, and has had deposit insurance since 1994, though that just covers the minimum coverage mandated under EU regulations (current minimums are €50,000, as of 2008, more information here). Most countries cover up to €100,000, including Belgium, Bulgaria, Cyprus, the Czech Republic, Finland, France, Germany, Greece, Hungary, Italy, the Netherlands, Portugal, Spain, Sweden, and Slovakia (among others). The UK covers up to £85,000 in a rather complicated scheme of percentages, and the Irish government will guarantee all the money in your bank accounts.

Certainly seems safer than putting your money in an escrow account controlled by a marketplace known for its illicit drug trade, and whose predecessor was taken down amidst a murder-for-hire scandal.

she's forever barred from having a job in the financial industry.

She can get a waiver from the FDIC under Section 19. It's a huge PITA (I hold one), but she can try.

Nothing in your post explains WHY it is a government concern that people get some minimum amount of vacation time. You say that the government should mandate some minimum amount of vacation time because otherwise an employer might not offer any. But that begs the question by assuming that it is a government interest that people get some minimum amount of vacation time.

In the US banking sector the FDIC strongly recommends mandatory vacation time of two consecutive weeks or more for active officers and employees as an effective internal control to combat fraud. This recommendation is even included in their Manual of Examination Policies for FDIC audits. If you allow exceptions you need to have compensating controls in place.

If fraud happens on these new cards, it becomes up to the consumers to prove that it was fraud and that they did not compromise their PIN.

[citation needed]

link gotten from wikipedia's citations..

http://www.fdic.gov/regulation...

Basically.. lesser of $50 or lots of extra specifics..

To my knowledge the laws that protect consumers against fraudulent credit card transactions don't apply to debit cards.

In recent years, things have gotten better for debit card holders, you are right that it used to be all promises. Now there are some federal regulations, but they still aren't anywhere near as strong as the federal laws protecting credit card holders.

http://www.fdic.gov/consumers/consumer/news/cnfall09/debit_vs_credit.html

So the US/UK bank bailouts never happened right?

In the US at least, who do you think insures the banks? "An independent agency of the federal government, the FDIC was created in 1933 ..."

http://www.fdic.gov/about/srac/2012/gsifi.pdf

Resolving Globally Active, Systemically Important, Financial Institutions
A joint paper by the Federal Deposit Insurance Corporation and the Bank of England 10 December 2012

The above is a plan published by the FDIC to save failing banks by "bailing-in" the money in customers' savings accounts, just like they did in Cyprus where lots of people lost their life savings.

Ain't nobody talkin' about hiding anything either. I be talkin' about how much the US Dollar is worth now vs how much it would be worth after a possible crash of the currency value. I.E. your life savings are worth jack shit even though the numerical value is a high one. Currency trading, simply stated.

Citation requested: http://www.fdic.gov/about/srac/2012/gsifi.pdf

Comparing development cycles to mortgage back securities is a bit dramatic, don't you think...All the bubble did was weed out the wannabes from those that were established.

That is how the mortgage bubble worked too. There were a large number of banks that were viable only because they could make so much money just passing mortgages through to other people. And once the bubble popped, they started going out of business in droves, just like the .com companies did. Take a look at the failed bank list. It's a very similar pattern to the list of dead tech companies left in the wake of the 2000 tech bubble. The big established companies managed to hang on (Bank of America, Wells Fargo, Citibank, etc.) while little players were sunk in large quantities.

While they both required greed for the bubble to grow and eventually burst, that is about the only thing in common. The mortgage back securities were stoked by the federal government pressuring banks to make sub-prime loans to those who would otherwise not afford housing. Banks, on their part, ignored credit risks and loaned more than what the value of the properties were valued at figuring increasing prices would cover them -- and for the most part it did. What did the mortgage back securities in was the value of the properties dropped so the investment paper became worthless. Most banks didn't get burned by this, they held on to tier 1 and 2 CMOs. Large instituional investors faired pretty well, they had tier 2 and 3 CMOs. It was the average Joe who was sold a bill of goods in repackaged CMOs that were worthless.

The .com bubble, on the otherhand was pure speculation by investors to start with. Venture Capitalists new the risks, but they got out of the market before the bust. Pension funds new the risk, and they too got out pretty much in time. How did they get out? They convinced Joe Consumer to purchase the investments and Joe Consumer, who didn't know enough about investing was left holidng the bag.

The other difference, in development cycles, is that developers actually produce something a product. Mortgage bankers don't. Somebody else builds the house. The Mortgage banker just packages up the investment for somebody else to buy. The Mortgage banker takes their cut off the top and the buyer of the investment assumes all the risk.

As for the big players holding on while the little players sinking, that is not true. Most little banks faired fine. They were too small to effectively participate in the mortgage backed securities schemese. It was the mid-size to large banks that got hit and got hit hard. The difference is that the largest of the large banks, like the ones you mention, had enough reserves to get through it, but it still was devestating to them. The other banks needed a bailout.

Again, none of that is applicable to software development other than there was too much money pouring in and a bubble was created that later burst.

Comparing development cycles to mortgage back securities is a bit dramatic, don't you think...All the bubble did was weed out the wannabes from those that were established.

That is how the mortgage bubble worked too. There were a large number of banks that were viable only because they could make so much money just passing mortgages through to other people. And once the bubble popped, they started going out of business in droves, just like the .com companies did. Take a look at the failed bank list. It's a very similar pattern to the list of dead tech companies left in the wake of the 2000 tech bubble. The big established companies managed to hang on (Bank of America, Wells Fargo, Citibank, etc.) while little players were sunk in large quantities.

Multiple bank accounts. Which is precisely what everyone does when the amounts are large enough that they need to be secured.

Unless Corporate People get different rules than People People, "everyone" doesn't do this. At a single bank, I can have an insured account in my name, an IRA containing an insured CD in my name, an insured joint account in me and my spouse's names (ok, not that one), an insured revocable trust, an insured irrevocable trust, an insured employee benefit plan, an insured corporate account, and an insured government account. Each with their own $250k limit.

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For example, if a person has a certificate of deposit at Bank A and has a certificate of deposit at Bank B, the accounts would each be insured separately up to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured.

FDIC

FDIC took over several smaller failing banks during the crisis. The consumer accounts were simply given to another non-failing bank for servicing.

http://www.fdic.gov/bank/historical/bank/2008/index.html

Eventually, the consumers did go through the inconvenience of needing to change their account numbers, get new checks, and new Debit/Credit Cards, but there was a grace period. The consumers did get paid, and were still able to access their money and make purchases. I am not saying that a transition for major banks would be completely without problems, nor am I saying that transitioning for a large bank would would be as easy and fast as the weekend transitions for these smaller banks. But your argument that account holders would be completely without money for more than a few days is unfounded, and would not lead to a greater problem.

50 times in 2012 alone. Source: FDIC

And I think the current limit is $250K per account.

The problem is not bank failure. The FDIC regularly seizes banks on Bank Failure Friday. Banks fail all the time:

http://www.fdic.gov/bank/individual/failed/banklist.html

The problem is the complete lack of any serious reform. Too Big To Fail, a major issue, is even worse today than it was in 2008. The failed banks are merged with larger banks with the government absorbing significant losses.

Basically, the current system uses tax money to fund Wall Street profits. Bad loans which the government insures or buys means tax money goes to make the loan good, making the lender whole, and leaves the taxpayer on the hook. With government debt at 100% GDP, the government should not be funneling money to Wall Street for pure profit, and getting nothing in return.

Tax money should be used for public goods, not Wall Street profits. That system has not changed in any significant way. The Too Big To Fail banks are completely and totally backstopped by the government. And that means these entities have a direct line to the public treasury.

Creative destruction is desperately necessary at the top. The people who orchestrated this debacle are still in power, both in finance and politics. They rose to the top because of their ability to create and prosper in this terribly flawed system. To think they'll voluntarily change it when it rewards them so handsomely is completely unrealistic.

The problem is not bank failure. The FDIC regularly seizes banks on Bank Failure Friday. Banks fail all the time:

http://www.fdic.gov/bank/individual/failed/banklist.html

The problem is the complete lack of any serious reform. Too Big To Fail, a major issue, is even worse today than it was in 2008. The failed banks are merged with larger banks with the government absorbing significant losses.

Basically, the current system uses tax money to fund Wall Street profits. Bad loans which the government insures or buys means tax money goes to make the loan good, making the lender whole, and leaves the taxpayer on the hook. With government debt at 100% GDP, the government should not be funneling money to Wall Street for pure profit, and getting nothing in return.

Tax money should be used for public goods, not Wall Street profits. That system has not changed in any significant way. The Too Big To Fail banks are completely and totally backstopped by the government. And that means these entities have a direct line to the public treasury.

Creative destruction is desperately necessary at the top. The people who orchestrated this debacle are still in power, both in finance and politics. They rose to the top because of their ability to create and prosper in this terribly flawed system. To think they'll voluntarily change it when it rewards them so handsomely is completely unrealistic.

Never mind, looks like I was the one who's wrong. In my defense, if they meant "all single accounts at the same bank", they should have said "all single accounts at the same bank". This one is clearer:

http://www.fdic.gov/deposit/deposits/dis/

All deposits that an accountholder has in the same ownership category at the same bank are added together and insured up to the standard insurance amount.

You're wrong. FDIC insurance is per person, not per account.

https://www.fdic.gov/edie/fdic_info.html#11a

All single accounts established by, or for the benefit of, the same person are added together. The total is insured up to a maximum of $250,000, including principal and interest.

Spreading your assets will help you out if a bank fails. If you have less than $250k in each bank, your account with the bank that failed will be insured by the FDIC. Spreading your assets will not help you out if all of the banks fail. You will be insured for up to $250k, unless you diversify the types of accounts. This can help you, because (for example) if you have $250k in a single-owner account, you can put another $250k into a Roth and both accounts will be covered. Similarly, if you are married then your joint account with your spouse would be covered up to $250k per co-owner, i.e. $500k in total:

You may qualify for more than $250,000 in coverage at one insured bank or savings association if you own deposit accounts in different ownership categories. The most common account ownership categories for individual and family deposits are single accounts, joint accounts, revocable trust accounts, and certain retirement accounts.

Here is a Congressional hearing that did look at that question as well, those guys are definitely more knowledgeable about it than you are and they say FDIC was created to ensure that banks didn't have to compete on quality of service, that people would specifically have the moral hazard of not caring which bank to lend their money to

I'm sorry, but you're citing a video in which Ron Paul is making claims and offering his assertions as fact ... of course he's saying what you want him to say, but that has nothing to do with the reasons FDIC were created.

From FDIC's own site:

At the time of its adoption in 1933, deposit insurance had a record of experiments at the state level extending back to 1829. New York was the first of 14 states that adopted plans, over a period from 1829 to 1917, to insure or guarantee bank deposits or other obligations that served as currency. The purposes of the various state insurance plans were similar: to protect communities from the economic disruptions caused by bank failures; and to protect depositors against losses. In the majority of cases the insurance plans eventually proved unworkable. By early 1930, the last of these plans had ceased operations.

At the federal level, deposit insurance had a legislative history reaching back to 1886. A total of 150 proposals for deposit insurance or guaranty were made in Congress between 1886 and 1933. Many of these proposals were prompted by financial crises, though none was as severe as the crisis that developed in the early 1930s. The events of that period finally convinced the general public that measures of a national scope were needed to alleviate the disruptions caused by bank failures.

From the stock market crash in the fall of 1929 to the end of 1933, about 9,000 banks suspended operations, resulting in losses to depositors of about $1.3 billion. The closure of 4,000 banks in the first few months of 1933, and the panic that accompanied these suspensions, led President Roosevelt to declare a bank holiday on March 6, 1933. The financial system was on the verge of collapse, and both the manufacturing and agricultural sectors were operating at a fraction of capacity.

The crisis environment led to the call for deposit insurance. Ultimately, the force of public opinion spurred Congress to enact deposit insurance legislation. The Banking Act of 1933, which created the FDIC, was signed by President Roosevelt on June 16, 1933.

By almost any measure, the FDIC has been successful in maintaining public confidence in the banking system. Prior to the establishment of the FDIC, large-scale cash demands of fearful depositors were often the fatal blow to banks that otherwise might have survived. Widespread bank runs have become a thing of the past and no longer constitute a threat to the industry. The money supply both on a local and national level has ceased to be subject to contractions caused by bank failures. The liquidation of failed bank assets no longer disrupts local or national markets and a significant portion of a community's assets are no longer tied up in bankruptcy proceedings when a bank fails.

Just because Ron Paul says it, doesn't make it true .. it's in support of his ideological position, which, based on your sig is the same as your own. In my opinion, he spouts the same drivel as a lot of similar people ... I think he's a crank like Ayn Rand.

Retroactively saying it was to prevent the need for banks to compete on quality of service is revisionist history at best, and an outright lie at worst. It was created because banks were failing and wreaking havoc on the economy.

Finding an American congressman who blindly believes in deregulation and a free market is easy ... but I've yet to see any evidence that what these people are claiming works. In fact, it's the la

We don't need our deposits protected.

The protection is not unlimited.

This matters in your retirement and estate planning. Deposit Insurance Summary

Just let the banks fail already.

When a bank is in trouble what usually happens is that its assets and customers are absorbed by a larger and much stronger bank.

You have fewer choices. Local branches are more distant. That is a small problem for the rich --- and a world of hurt for the poor. All benefit programs are moving to direct deposit. You must have a bank account.

No matter how hard it may be to maintain the minimal balance required and and avoid being mulcted by transaction fees and other charges,

Have fun getting only 100k or less of your retirement account back :)

Retirement accounts were not protected by FDIC insurance, since they are invested in various mutual funds and such. Most people have lost a significant fraction of their 401k despite any bailouts. Unlike financial sector salaries, I don't think 401K accounts have rebounded much, either.

http://www.fdic.gov/news/news/press/2006/pr06029.html

try again.

Looking at the list, most of the corporations are banks. Banks don't contribute to the economy - they produce nothing, they just move money around, increasing fluidity at the expense of stability. They also leverage their wealth to change the law in their favour - witness the profound changes to financial legislation brought about since the 1980s.

it's simple: you take it to your own bank, and deposit it. Your bank will get the money transferred from BofA for no fee.

You are presuming that the person holding the check written on BoA paper has a bank account.

This is the point of the argument against BoA (and the few other banks) that charge a fee for cashing their own financial instruments. The worst part of it is that the person with the BoA account generally doesnt even know that there is such a fee when they are writing their check.

The FDIC estimates that there are 10 million American households without bank accounts that are thus forced to pay a fee whenever they receive a BoA financial instrument.

Banks charging money to cash their own financial instruments is a relatively new phenomena, and the only banks that do it handle very large amounts of payroll checks. BoA in particular strategically took over regional banks across the country, one after another, that had a significant payroll business. I'm sure more than a few of us here have witnessed the bank their employer does business with get taken over by BoA.

Yeah, they took the money....but they didn't take it then file for bankruptcy.

Semantically, that's true, but only because banks don't file for bankruptcy, they fail and the FDIC covers the depositors. The result is the same, though, and LOTS of banks receiving TARP funds did it.

Lol, you talking about facts. Do you understand what the data you provided means? Abusing the math a little, (I assumed that branch growth was linear), the banks fired at least one teller. There were 6.5 tellers per branch in 1992 and in 2008 there were 5.2 tellers. Since that is one person per branch, 99,109 people don't have a job. Of course, these numbers don't distinguish between full and part-time. In the state of Ohio, Diebold employees 2,000 people. I wish I could have found a company total. Again abusing the math, (assuming that Ohio is the average and big states even out small states), that makes 100,000 employees. So it is about even in 2008. (The article I got it from was about Diebold layoffs. The 100,000 number is pre-layoff.) Temper that with the fact that in 1980, there were about 12 tellers per bank. Link You and your facts.

Most banks had near record profits in 2010.

I'm sure there are a *ton* of banks out there--but this list says more than a few didn't have record profits...

Are you stupid? I mean seriously, can you not read a little about bankruptcy law and understand how it works first before jumping to the wrong god damned conclusions and making an ignorant ass out of yourself?

In your first link, it shows the filing in debt. That's only part of the process I stated "When a company or you files for bankruptcy, retirement, employee compensation, benefits, expenditures and all that has to be reviewed by a judge or arbitrator who was appointed by the bankruptcy court then justified as an ongoing payment before it's reviewed."

In your second link (and I'm discounting the wikipedia link), it shows tax liabilities when a bankruptcy court allows a golden parachute payment that is in line with the corporation's fiduciary responsibility. Nothing new or different from what I said here.

In your third link, it only expands on the first which is still in line with what I said completely.

In your forth link, it's not even relevant because the bank, Washington Mutual didn't file bankruptcy, they were seized by the feds and dissolved or in the process of it because it was so underfunded. And if you note, they have to sue to try and get their severance packages because it was denied when the feds shut it down so if anything, it bolsters what I said.

In your fifth link, it's irrelevant too. It talks about bank bailouts not bankruptcy. You see, there is a fucking difference between the government bailing you out and you not having to file bankruptcy and you actually filing bankruptcy. If you cannot understand that, then you probably should just shut up right now.

I'll reprint the relevant bit here, because it is such an absolute and direct refutation of your silly, uninformed opinions.

Relevent to whom? You? I mean common, you only posted the definition of what a golden parachute is in your last link but you failed to even remotely consider why it's defined. Well, here is why! Do you see that where in 12 CFR 359.2 it makes golden parachutes illegal?

359.2 Golden parachute payments prohibited.

No insured depository institution or depository institution holding company shall make or agree to make any golden parachute payment, except as provided in this part. Keep on reading because in 359.3 it makes taking insurance out on you getting the golden parachute in case the company goes bankrupt illegal too. There are some exceptions but the way you are attempting to portray it is in no way part of them.

Go ahead and follow the regulations, even follow the link in the end where it says nothing in this regulation binds any payment to any receiver or shouldn't be construed to violate 12 U.S.C. 1828(k)(3).

WOW! So, "Golden Parachutes" are actually (among other things) meant to protect executives in the case of bankruptcy.

Why don't you just shut up and read the law. You started and I'm not sure if you were too incompetent to continue reading or if you purposely stopped when it started disagreeing with you.

I just have to ask, why do you bother? I mean, every. single. time. you try to argue with me, you lose. Doesn't it get tiring?

Ok, Now I'm sure you stop paying attention to the reality of life when it disagrees with you. Every single time we do this, I end up pointing out what you overlooked and completely misconstrued. How you can claim that is somehow a fault of mine is ridiculous but still a symptom of your idiocy.

And yes, it does get tiring when I point out how irresponsibly wrong you are. At least in this situation, it was pretty simple, all I had to do was read past where you stopped.