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However, most people usually just run it as credit - and there's a good reason for that. If someone steals your card info for a debit card - you're pretty much screwed. Any money they pull out before you notice is _gone_ unless you report it pretty much immediately - and even then, that's no guarantee you'll get it back. I think they have a maximum amount they'll refund, and they'll only refund that if you notify them within 30 days.

Just to let you know, debit cards do have slightly more risk to the consumer, but not in the way you described. According to the Electronic Fund Transfer Act which is codified in Federal Reserve Board Regulation E, liability to consumers that had a fraudulent debit card transaction is limited to $50 unless the consumer does not notify their bank within 2 days of learning of the fraud or loss of debit card. The $50 limit is not normally enforced, because banks don't want to loose your deposits. The Federal Reserve Bank of San Fransisco has a good summary of the differences in liability between Debit and Credit cards. Further, a bank must return any funds transferred by error or fraud within ten days {see paragraph (c)(1&2)}, unless the bank can prove no error or fraud took place.

One might say that 2 days is not enough time, but my bank (ING) sends me an email for every transaction in my accounts. If one is not familiar, I can easily check the detail.

With Visa - they'll refund everything. And I don't recall there being any significant time limit on it.

The law imposes a strict $50 limit on liability for credit cards, but credit card issuers rarely enforce this in order to retain you as a customer.

However, most people usually just run it as credit - and there's a good reason for that. If someone steals your card info for a debit card - you're pretty much screwed. Any money they pull out before you notice is _gone_ unless you report it pretty much immediately - and even then, that's no guarantee you'll get it back. I think they have a maximum amount they'll refund, and they'll only refund that if you notify them within 30 days.

Just to let you know, debit cards do have slightly more risk to the consumer, but not in the way you described. According to the Electronic Fund Transfer Act which is codified in Federal Reserve Board Regulation E, liability to consumers that had a fraudulent debit card transaction is limited to $50 unless the consumer does not notify their bank within 2 days of learning of the fraud or loss of debit card. The $50 limit is not normally enforced, because banks don't want to loose your deposits. The Federal Reserve Bank of San Fransisco has a good summary of the differences in liability between Debit and Credit cards. Further, a bank must return any funds transferred by error or fraud within ten days {see paragraph (c)(1&2)}, unless the bank can prove no error or fraud took place.

One might say that 2 days is not enough time, but my bank (ING) sends me an email for every transaction in my accounts. If one is not familiar, I can easily check the detail.

With Visa - they'll refund everything. And I don't recall there being any significant time limit on it.

The law imposes a strict $50 limit on liability for credit cards, but credit card issuers rarely enforce this in order to retain you as a customer.

However, most people usually just run it as credit - and there's a good reason for that. If someone steals your card info for a debit card - you're pretty much screwed. Any money they pull out before you notice is _gone_ unless you report it pretty much immediately - and even then, that's no guarantee you'll get it back. I think they have a maximum amount they'll refund, and they'll only refund that if you notify them within 30 days.

Just to let you know, debit cards do have slightly more risk to the consumer, but not in the way you described. According to the Electronic Fund Transfer Act which is codified in Federal Reserve Board Regulation E, liability to consumers that had a fraudulent debit card transaction is limited to $50 unless the consumer does not notify their bank within 2 days of learning of the fraud or loss of debit card. The $50 limit is not normally enforced, because banks don't want to loose your deposits. The Federal Reserve Bank of San Fransisco has a good summary of the differences in liability between Debit and Credit cards. Further, a bank must return any funds transferred by error or fraud within ten days {see paragraph (c)(1&2)}, unless the bank can prove no error or fraud took place.

One might say that 2 days is not enough time, but my bank (ING) sends me an email for every transaction in my accounts. If one is not familiar, I can easily check the detail.

With Visa - they'll refund everything. And I don't recall there being any significant time limit on it.

The law imposes a strict $50 limit on liability for credit cards, but credit card issuers rarely enforce this in order to retain you as a customer.

The FDIC did not undo that transaction, your bank did, because it was no longer cleared (guaranteed).

Your claim seems to stand in contrast to the reversing ACH transaction on my account marked:

R34-RDFI PARTIC LIMITED BY FEDERAL

(A 600 million dollar failure, btw)

Anyway, the money was already previously marked as present and available in my destination account; furthermore, my destination institution charged me a bounced ACH fee over the incident.

If it was not for that government agency you would have had the ACH deposit reversed, and then not got any money for many months.

But the transaction had already been marked as settled. If that is not enough, then what's to keep an institution from clawing back ACH transfers from months ago? That is to say, I think the money made it just fine. If it didn't make it safely there, then why not reverse *all* my transactions for the past year or something? I mean, that's the only way to be sure there wasn't any fraud, right?

If it was not for that government agency you would have had the ACH deposit reversed, and then not got any money for many months.

I never claimed I was anti deposit insurance, just anti government agency-based deposit insurance. Even if there was additional delay due to private deposit insurance vs. government-agency based insurance, I would prefer the private insurance on principle of limited government.

Last time I investigated this you really can get a prepaid debit card from your local check cashing place that is not FDIC insured, does not pay interest, and charges you a fee every time you use it.

That's not banking, and last time I checked the FDIC won't insure any of my money over $250k that I happen to keep in an individual account. Like I said: I would prefer a banking institution with private deposit insurance—insurance that won't screw me out of hundreds of thousands of dollars if the institution fails.

...that and the obligatory, "Plz to have no government meddling, kthxbai".

Incidentally, don't keep more than $100,000 in any one US bank. Banks go bust all the time. 10 more banks went bust last month.

FDIC insurance was raised to 250k:

"On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, which, in part, permanently raises the current standard maximum deposit insurance amount (SMDIA) to $250,000. "

http://www.fdic.gov/deposit/deposits/changes.html

The way to do a merchant account, if you're serious, is to go in person to a big bank, where you have other accounts, and open a business checking account or two. They'll want to see various documents. Do all that. You may have to put down a deposit if you're a new merchant, but that's negotiable. Then, when you start accepting payments on line, find a credit card processor who will connect directly to your bank. The legit processors, like "authorize.net", will do this.

When you do it this way, the money goes directly from the customer to your bank account. There may still be chargebacks, and the bank may place holds on your withdrawals. But the money is in your account, and subject to published banking regulations. Chase is considered the big dog of banks for merchant accounts.

Avoid PayPal, "Value-Added Resellers", and other non-bank middlemen. If you have to use a "merchant service provider", pick one that's owned by a bank, and deal with them directly, not through some reseller.

Of course, you have to be a legitimate business to do this. Your business licenses and D/B/A names should be current, and having a Dun and Bradstreet rating helps. You have to have a good credit rating personally. And if you have too many chargebacks, the bank will dump you, so you have to keep your customers happy. Otherwise, you get kicked down to the sub-prime merchant account market, which is not a happy place. You'll pay more periodic fees, but lower per-transaction fees.

Incidentally, don't keep more than $100,000 in any one US bank. Banks go bust all the time. 10 more banks went bust last month.

Contrast that with bank failures that occurred in the 1980's due to the S&L crisis. In those cases, the bank would be shut down and their assets sold off, and the depositors each got a check for the amount in their account up to the limit of the FDIC deposit insurance (I think it's $100K, may be higher). So it does in fact protect you, not your bank.

The amount FDIC's normally insured per account was recently raised to up to $250,000, however you are correct that in the 1980's the insurance was up to $100,000.

"the last time my cc details were swiped I got credit on the credit card, but still had to pay the accrued (fraudulent) charges from my own bank account."

What's your exposure limit where you are? In the US it's supposed to be USD50 under certain conditions and zero under other conditions, assuming you report it within 2 days of _learning_ of the loss or theft of access.

If you're in the USA, you got screwed by your bank, and perhaps you should sue them for the money and damages - it's the "American Way" right? ;).

See section 909:
http://www.fdic.gov/regulations/laws/rules/6500-1350.html

Some interpret section 909 as the customer is only liable if the card is stolen or lost, and not liable at all otherwise:

909. Consumer liability for unauthorized transfers

(a) A consumer shall be liable for any unauthorized electronic fund transfer involving the account of such consumer only if the card or other means of access utilized for such transfer was an accepted card or other means of access and if the issuer of such card, code, or other means of access has provided a means whereby the user of such card, code, or other means of access can be identified as the person authorized to use it, such as by signature, photograph, or fingerprint or by electronic or mechanical confirmation. In no event, however, shall a consumer's liability for an unauthorized transfer exceed the lesser of--

(1) $50; or

(2) the amount of money or value of property or services obtained in such unauthorized electronic fund transfer prior to the time the financial institution is notified of, or otherwise becomes aware of, circumstances which lead to the reasonable belief that an unauthorized electronic fund transfer involving the consumer's account has been or may be effected. Notice under this paragraph is sufficient when such steps have been taken as may be reasonably required in the ordinary course of business to provide the financial institution with the pertinent information, whether or not any particular officer, employee, or agent of the financial institution does in fact receive such information.

Notwithstanding the foregoing, reimbursement need not be made to the consumer for losses the financial institution establishes would not have occurred but for the failure of the consumer to report within sixty days of transmittal of the statement (or in extenuating circumstances such as extended travel or hospitalization, within a reasonable time under the circumstances) any unauthorized electronic fund transfer or account error which appears on the periodic statement provided to the consumer under section 906. In addition, reimbursement need not be made to the consumer for losses which the financial institution establishes would not have occurred but for the failure of the consumer to report any loss or theft of a card or other means of access within two business days after the consumer learns of the loss or theft (or in extenuating circumstances such as extended travel or hospitalization, within a longer period which is reasonable under the circumstances), but the consumer's liability under this subsection in any such case may not exceed a total of $500, or the amount of unauthorized electronic fund transfers which occur following the close of two business days (or such longer period) after the consumer learns of the loss or theft but prior to notice to the financial institution under this subsection, whichever is less.

(b) In any action which involves a consumer's liability for an unauthorized electronic fund transfer, the burden of proof is upon the financial institution to show that the electronic fund transfer was authorized or, if the electronic fund transfer was unauthorized, then the burden of proof is upon the financial institution to establish that the conditions of liability set forth in subsection (a) have been met, and, if the transfer was initiated after the effective date of section 9

Oh really, who marked you as informative I wonder, 4 year olds?

http://www.fdic.gov/ or Federal Deposit Insurance Corporation - United States government corporation.

Mission statement

Mission

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by:

        * insuring deposits,
        * examining and supervising financial institutions for safety and soundness and consumer protection, and
        * managing receiverships.

The insured banks must provide this sign: Deposits are backed by the full faith and credit of the United States Government

  1828. Regulations governing insured depository institutions
How Current is This?
(a) Representations of deposit insurance
(1) Insured depository institutions
(A) In general
Each insured depository institution shall display at each place of business maintained by that institution a sign or signs relating to the insurance of the deposits of the institution, in accordance with regulations to be prescribed by the Corporation.
(B) Statement to be included
Each sign required under subparagraph (A) shall include a statement that insured deposits are backed by the full faith and credit of the United States Government.

---

None of the failing banks were shut down, they were bailed out. NOW you can carry on with your propaganda and disinformation.

had those things not been in place to begin with, sane fiscal policies would have been made by the banks

There was this event in history commonly referred to as The Great Depression which was followed by many of the same regulations that were removed because prior to implementing these regulations there was a similar financial melt down in many cases caused by similar financial bubbles and out of control chicanery.

I find it to be more than a coincidence that the S&L crisis followed deregulation and the current financial melt down also followed deregulation.

And the fact that the regulations, like the Glass-Steagall Act of 1933, came after the Great Depression suggests your conclusion about the regulations causing the crisis are dead wrong. Hell, the deregulation is what created "To Big to Fail" not the enactment of regulations.

If you use it as a debit card--snip--you are fully on-the-hook when it comes to losses - if they steal $2000 from your account, you have lost $2000 - there is no disputing charges or limited liability like with a credit card.

I worked at a financial institution, this is completely incorrect. Your liability is limited by law to $50, and most small banks and credit unions just limit it to -0-. Just make sure you have email alerts on so you know your card is being abused & call your bank & police if so.

http://usa.visa.com/personal/security/visa_security_program/zero_liability.html

http://www.fdic.gov/regulations/laws/rules/6500-1350.html

I don't personally know anybody, but there are thousands of banks in the United States, so it must be possible to start one...

In fact, a quick web search turns up this news story about people starting their own banks. And little more searching turns up the FDIC site for bankers, which presumably has information and forms required for opening a bank.

As others have pointed out, the main difficulty would be establishing credibility. "Hey, I'm some guy, trust me with your savings," just isn't going to cut it.

This says you're wrong.

Read the 'exceptions' list. Exception (a) applies to your situation (father giving you a gift), and exception (f) applies to both your situation and the grandparent's banker's situation (Christmas gifts). For your situation, there would be no value limit on such a gift (exception (a) places no limit on value), and for the grandparent's situation, $20 would certainly be 'reasonable' (the limit on exception (f)) for a Christmas gift.

I'll leave it up to the slashdot tifosi to declare how long it would last in a bank vault.

I'll pass....

The stock that was held by John Q. Public (i.e. me) was associated with the organization which retained all the liabilities, and is now worth just a few pennies.

And that's not true either, because (a) most of the liabilities of Washington Mutual Bank were in fact acquired by Chase, and (b) the unsecured liabilities are in the hands of the FDIC, which will most likely never have to pay them. From the FDIC report on the seizure:

If you hold senior unsecured debt, subordinated debt, or other claims in Washington Mutual Bank then you should file a claim in the receivership for recovery of any amounts that may be due to you. Please note that under federal law, 12 U.S.C. 1821(d)(11), claims by subordinated debt holders are paid only after all claims by general creditors of the institution. At this time, the FDIC as Receiver for Washington Mutual Bank does not anticipate that subordinated debt holders of the bank will receive any recovery on their claims.

The holding company didn't get stuck with the liabilities of the seized bank. Your stock became worthless because the holding company's one big asset, the bank, got seized by the government, and is now mostly an empty shell.

Dude, again, if you make an investment and it fails, make sure that in the end you at least understand why it failed. Otherwise, you've not gained even wisdom from the experience.

I was half-right. Chase bought WaMu, paid off their executives handsomely (one guy who'd been there three weeks got $18M), and then somehow said, "We're buying all the assets, but not the liabilities."

All three parts of your claim there are wrong, which makes you completely wrong, not "half-right." From :

"On September 25, 2008, the United States Office of Thrift Supervision (OTS) seized Washington Mutual Bank from Washington Mutual, Inc. and placed it into the receivership of the Federal Deposit Insurance Corporation (FDIC). The OTS took the action due to the withdrawal of $16.4 billion in deposits, during a 10-day bank run (amounting to 9% of the deposits it had held on June 30, 2008). The FDIC sold the banking subsidiaries (minus unsecured debt or equity claims) to JPMorgan Chase for $1.9 billion, which reopened the bank's offices the next day as JPMorgan Chase branches. The holding company, Washington Mutual, Inc. was left with $33 billion assets, and $8 billion debt, after being stripped of its banking subsidiary by the FDIC. The next day, September 26, Washington Mutual, Inc. filed for Chapter 11 voluntary bankruptcy in Delaware, where it is incorporated."

To understand that passage, it's important to know that publically-owned banks in the USA are structured as a public holding company, which privately owns a bank. This is important because what you bought was shares of Washington Mutual Inc. (let's call it WMI), the holding company for Washington Mutual Bank (WMB). WMB failed, so the OTS seized it away from WMI and gave it to the FDIC, which then disposes of the assets and liabilities of WMB in order to make insured deposits and secured debtholders whole. At that point, WMI is bankrupt, so your stock investment is not really worth nothing anymore.

But the more important thing to note is that Chase didn't buy WMI from the shareholders; they bought from FDIC the WMB assets and obligations that the FDIC was on the hook for.

You're also wrong about the "buying all the assets, but not the liabilities part." From the FDIC statement on the closure:

"Subsequent to the closure, JPMorgan Chase acquired the assets and most of the liabilities, including covered bonds and other secured debt, of Washington Mutual Bank from the FDIC as Receiver for Washington Mutual Bank. Any claims by equity, subordinated and senior unsecured debt holders were not acquired." [my emphasis]

This is a standard FDIC bank closure; the FDIC takes care of insured deposits and secured debt of the banks it takes over, and only if there's anything left over from the bank's assets, then unsecured creditors and shareholders get some (in that order). Chase bought the WMB's assets and all the liabilities that the FDIC is on the hook for. The liabilities that Chase didn't get are the ones that the FDIC doesn't normally cover. So basically, the folks who are owed those debts were wiped out by the FDIC takeover, not by the sale to Chase.

And thirdly, the WaMu executives that you claim got paid off handsomely were not paid by Chase. They were paid by WMI, the holding company that went bankrupt. Though the $17.5 million guy actually declined it:

"Chief executive Alan H. Fishman was flying from New York to Seattle on the day the bank was closed, and eventually received a $7.5 million sign-on bonus and cash severance of $11.6 million (which he declined) after being CEO for 17 days."

So basically, you made a bet on a bank that was about to fail, without understanding even a single iota of what happens when banks fail, and then you failed to learn how your investment failed. I can certainly understand and sympathize the part about making the bet on something you don't understand, if you hedge your bet accordingly (which you certainly seem to have done). What I can't understand is your inability or refusal to actually learn how your investment failed.

This sounds too much like yet another bailout (as if $13.9 trillion tax dollars thrown into banks ^H^H^H^ black holes wasn't enough.)...$olitical influen$e...

You, Sir, are guilty of disseminating disinformation. In context of the $13.9tn, you fail to understand the concept of "maximum" "capacity" "announced", as opposed to "actual" "cost" "incurred". Don't take it personally, but please inform yourself or shut up.

This is simply a plan to reduce property supply, prop up property prices and therefore bail out banks and property developers

You might be right, but your analysis is lacking rigour and thus people will laugh at you. Again, don't take it personally.

Yes there are parts of any sprawling American city which would be better off if torn down and rebuilt. This sounds too much like yet another bailout (as if $13.9 trillion tax dollars thrown into banks ^H^H^H^ black holes wasn't enough.) This is simply a plan to reduce property supply, prop up property prices and therefore bail out banks and property developers (generally wealthier with more $olitical influen$e than tenants and mortgage holders.) It is exactly like the government destruction of fruit during the Great Depression in order to prop up cannerys and megafarms:

"...And the failure hands over the State like a great sorrow. The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges, and they are angry at the crime, angry at the people who have come to take the fruit. A million people hungry, needing the fruit--and kerosene spayed over the golden mountains." - From "The Grapes of Wrath", John Steinbeck 1939

What are you talking about? The international banking system collapsed just a few months ago.

That's wrong. The US federal government has not allowed banks to collapse since 1933

In America, pre-depression economics was a vicious cycle of boom and bust.

[citation needed]. Have you tried getting some hard data to back this claim?

I recently gave a course on Python programming to some coworkers and used data from that site in my examples. It's weird how you can plot data of wages vs. cost of living for centuries and see a slow but constant progress, interrupted only by wars, until 1914. The silver and gold standard caused the economy to be *very* stable.

Then, after WWI, the UK eliminated the gold standard. A big market bubble arose, followed by collapse in 1929 and regulation in the 1930s. Afterwards it's very difficult to plot anything due to inflation, you cannot determine accurately what should be the worth of things. So, that "vicious cycle of boom and bust" that you mention actually was one boom from 1919 to 1929 and one bust from 1930 to mid-30s and was the result of a government trying to regulate away the economic consequences of war.

You can try every combination of factors you want, plot wages, cost of living, stock prices against GDP, price index, gold prices, whatever. Government intervention in the economy only makes things worse. An interesting plot is wages vs. cost of living in the UK from the 14th to the 19th century. You can see every time when a king changed the amount of silver in a penny in that graph. Do you want an efficient economy? Take away the power of the government to print money. The only regulation needed is a standard defining the mass of one gram, let the market define how much a gram of silver or gold is worth and the rest is consequence.

I think the only reason why people defend government intervention in the economy is because no one today remembers the age when the market was free. And, unfortunately, when you allow intervention in the economy, intervention in other areas is inevitable. There has never existed a communist government, one that does not allow a free market to exist, that didn't end up as a dictatorship. Allow the government to take over the economy and no one will have the means to start an opposition movement.

I don't know if I can accept the total balance of commercial debt outstanding as a suitable proxy for amount lending. I'm also not very likely to take my econ information from a website that photoshops people's faces onto cereal boxes; this would tend to indicate they're in need of a distraction.

Your argument, essentially, is that there is no credit crisis, and that it's a conspiracy of government, bank, and media types. Yet for some bizarre reason, we had four bank failures yesterday, putting us at 13 for the year and 26 since late 2007. Home Equity lines of credit have been frozen by most banks since February '08. Mortgage insurance guidelines are getting stricter and Fannie/Freddie are larding on fees and points for anyone with credit score not in the 90th percentile. Credit card companies are reducing credit lines, which must go down as one of the biggest barn door closing after the cows leaving in history. Of course, now things have swung in the completely opposite direction from where we were in '06 and everyone in the banking industry is all conservative, just when we need growth the most! Have you tried to get a home loan recently? I have. You can get a good rate but you have to have over 800 FICO and the fees are ridiculous. Meanwhile the houses are usually a least 30-50% off their last sale prices, particularly if those were in the last 5 years, and short sales/REOs are something like half of all the places I'm seeing. These lenders are slowly drowning.

Let's say you're right and the credit markets are returning to normal. Are you actually suggesting the banks are not insolvent? What evidence do you have that their MBS and loan assets have any value whatsoever, and they've simply become zombified and are only able to fulfill depositors withdrawals by getting TARP money? They have no positive NAV at this time in history aside from what TARP is handing them, and any lending they're doing right now is off those drafts, and grudgingly at that.

I think what you're also seeing on that chart you cited is interbank lending, not lending to any productive activity. The banks are all still pretending to each other they're holding good paper, just don't make them print any more of it by loaning out to deadbeat consumers or businesses!

You're going to need more than the Mises Institute (I'm sure they have no interest in proving some hobby-horse dogma!) to convince me there isn't a credit crisis :P

Fanny Mae was Bush certified. So was Washington Mutual. So was Lehman Brothers, and Merrell Lynch, and Bear Sterns....

Everyone of these failed banks was Bush-certified...

  County Bank, Merced, CA February 6, 2009 February 6, 2009
Alliance Bank, Culver City, CA February 6, 2009 February 6, 2009
FirstBank Financial Services, McDonough, GA February 6, 2009 February 6, 2009
Ocala National Bank, Ocala, FL January 30, 2009 January 30, 2009
Suburban Federal Savings Bank, Crofton, MD January 30, 2009 January 30, 2009
MagnetBank, Salt Lake City, UT January 30, 2009 January 30, 2009
1st Centennial Bank, Redlands, CA January 23, 2009 January 23, 2009
Bank of Clark County, Vancouver, WA January 16, 2009 February 5, 2009
National Bank of Commerce, Berkeley, IL January 16, 2009 February 5, 2009
Sanderson State Bank, Sanderson, TX
En Español December 12, 2008 February 5, 2009
Haven Trust Bank, Duluth, GA December 12, 2008 February 5, 2009
First Georgia Community Bank, Jackson, GA December 5, 2008 February 2, 2009
PFF Bank and Trust, Pomona, CA November 21, 2008 February 2, 2009
Downey Savings and Loan, Newport Beach, CA November 21, 2008 February 2, 2009
The Community Bank, Loganville, GA November 21, 2008 February 5, 2009
Security Pacific Bank, Los Angeles, CA November 7, 2008 February 2, 2009
Franklin Bank, SSB, Houston, TX November 7, 2008 February 2, 2009
Freedom Bank, Bradenton, FL October 31, 2008 February 2, 2009
Alpha Bank & Trust, Alpharetta, GA October 24, 2008 February 2, 2009
Meridian Bank, Eldred, IL October 10, 2008 February 2, 2009
Main Street Bank, Northville, MI October 10, 2008 February 2, 2009
Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT September 25, 2008 February 2, 2009
Ameribank, Northfork, WV September 19, 2008 February 5, 2009
Silver State Bank, Henderson, NV
En Español September 5, 2008 February 5, 2009
Integrity Bank, Alpharetta, GA August 29, 2008 February 5, 2009
The Columbian Bank and Trust, Topeka, KS August 22, 2008 February 2, 2009
First Priority Bank, Bradenton, FL August 1, 2008 February 5, 2009
First Heritage Bank, NA, Newport Beach, CA July 25, 2008 February 5, 2009
First National Bank of Nevada, Reno, NV July 25, 2008 February 5, 2009
IndyMac Bank, Pasadena, CA July 11, 2008 February 5, 2009
First Integrity Bank, NA, Staples, MN May 30, 2008 February 2, 2009
ANB Financial, NA, Bentonville, AR May 9, 2008 February 5, 2009
Hume Bank, Hume, MO March 7, 2008 February 5, 2009
Douglass National Bank, Kansas City, MO...

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

Tell me more about these Bush Administration certifications?

You're suggesting that Congress somehow forced private enterprise to behave stupidly, greedily, incompetently, negligently and possibly criminally? That private enterprise was unable to resist and followed each other, like lemmings, over the cliff?

Yes, see Housing and Community Development Act of 1977 - Title VIII (Community Reinvestment Act) and Federal Housing Enterprises Financial Safety and Soundness Act of 1992 which forced Fannie Mae and Freddie Mac to do what they did to those poor poor people.

A huge problem is that the thing which surprises us most about politicians is not that they're whores, but that they're cheap whores. Many seem perfectly willing to sell out their constituents, the country, and the constitution for relatively small campaign donations. I might be able to understand an expensive whore of a politician accepting payment of hundreds of thousands or millions of dollars in exchange for extending some favor. But the politician who takes a few thousand dollars in exchange for letting make millions or even billions of dollars be made at the ultimate expense of the rest of us is a cheap whore.

See Rod Blagojevich for what happens when they get greedy.

it doesn't matter if you've got insurance because its perfectly OK for your insurer to say "whoops, we cant actually cover that"...
As opposed to the FDIC?

The FDIC receives no Congressional appropriations - it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. With an insurance fund totaling more than $45 billion, the FDIC insures more than $5 trillion of deposits in U.S. banks and thrifts - deposits in virtually every bank and thrift in the country.

So, FDIC insurance is wonderful, unless there's an actual bank crash. To put things in perspective, Wachovia had 420 billion in deposits. A bank run would make the FDIC fairly meaningless, very quickly.

I'd much prefer private insurance - they aren't very efficient, but at least they aren't government. They also tend to spread the risk around a bit more.

And now Fannie Mae and Freddie Mac are government entities - that with various acts starting with the Community Reinvestment Act of 1977 under Carter and getting amendments over time, encouraged lending to the risks a normal banker would see a mile away?

I can't totally parse what you are trying to say here, it seems pretty jumbled and at least partly demonstrably wrong.

Fannie Mae & Freddie Mac were gov't entities, then were spun off into non-gov't corporations (though everyone thought they had some sort of special unspoken gov't back-up), then were placed back in gov't conservatorship recently. They are not the cause of the financial upheaval going on. They actually got into the sub-prime market late and in a lesser way due to legal restrictions that other companies did not have.

The CRA has been blamed by many on the right largely because it is about the only way to tie the financial shitstorm directly to Democrats. Unfortunately, the argument simple doesn't hold water. Are you really suggesting that a law passed 31 years ago caused no problems for 3 decades caused a sudden and dramatic panic? Do you have any evidence to offer to support that? Do you even know what the CRA really requires of lenders (and which ones)?

encouraged lending to the risks a normal banker would see a mile away?

Baloney. The CRA doesn't *require* any risks, and in fact CRA-regulated loans are not the ones that have been causing problems.

This financial downturn has been predicted by free marketeers since 2002 by the likes of Ron Paul and Peter Schiff:

And by gov't regulators who warned of problems back last century. It is not difficult to forsee that when bigger mortgages are given to a whole lot more people with a whole lot less ability to afford them, at predatory rates & conditions that there will be problems. Many people on the left (and some on the right) called for better regulations, yet we can thank Greenspan for undermining pretty much anything meaningful.

-Ted

The CRA never stated that people with poor credit histories had to be considered merely that a bank had to give loans where it was located. It also only applied to FDIC insured banks which damn well should have been kept separate from the investment arm. http://www.fdic.gov/regulations/laws/rules/6500-2515.html

But conservatives complaining about the essential 'feature' of the free market is sort of twisted.

Of course, we have the statists blaming the free market, when it was precisely government meddling which caused the problem.

Macroeconomics is complicated, but at its root, it is always some (very nonlinear) function of the interaction of billions of microeconomic decisions. As such, you don't need an economic model with 10**6 parameters in order to get to the bottom of the situation, you just need to ask the right fundamental microeconomic questions.

In this case, the basic flawed decision was that of a banker (x 10000) lending money to someone (x 1000000) that was KNOWN to be unlikely to pay it back under the terms of the loan contract (and, of that individual accepting the loan, KNOWING that they would be unable to repay it). Nothing in the free market could have caused such irrationality, at least not on a wide-enough scale to lead to the present collapse.

What did cause it was government distortion of the market which essentially went like this:

"You have to loan to these people to buy houses because that's the PC thing to do. In fact, if you don't show us that you are loaning enough money to people with high credit risk we will regulate you even more than we already do, and possibly revoke your charter. Here are all of the details, if you care, but really, all that matters is that you stay on the good side of your congress-critter by showing good numbers, and you'll be in compliance. Oh yes, contributing to her campaign fund wouldn't hurt either."

"And, you actually need not worry about the quality of these loans, since our friends Fannie and Freddie have a virtually unlimited (wink, wink) supply of 'money' with which to take these off your balance sheet, and no one is every going to shut off that spigot. Sure, this will drive up housing prices such that you'll have to keep making bigger and riskier loans in order to fulfill your obligations, but, hey, it's all just play money anyway. As long as everyone has 'confidence' in this system we're fine. Let the good times roll!"

Call it what you will: A Ponzi scheme, a con game, moral hazard run amok, business as usual. Whatever its name, it was caused by coercive government action. And, now, we have more such meddling which will surely depress the economy, deflate the currency, and make us all a lot poorer than we would have been if we had just let the system cleanse itself in one big purge of these crap-ridden pieces of paper.

In that scenario, there would have been pain, including layoffs for some of us here. But, it would have been trivial compared to what will ensue over the coming years as a result of this unconscionable power grab. The Secretary of the Treasury has become an Economic Dictator and we are all about to find out what that entails. It won't be pretty.

Is it? Have you asked the people who have their money in those banks, and rely on it to survive?

Just the fact that you asked such an idiotic question shows you have no understanding of the banking system. Furthermore, it's shortsighted greed like yours that's causing this mess in the first place.

Hey now, settle down. Just because he's ignorant doesn't mean he's greedy. It was a fair question: if you're an average individual with a bank account, and through no fault of your own that bank goes out of business, what happens to your ability to put food on the table? The answer, of course, is FDIC insurance up to $100,000. If you have more than that, split it between different banks.

I get a top-notch highway system, Paid for by a gasoline tax

a federally insured system of banks Banks pay for the FDIC

police and fire protection Paid for by state and local taxes

my food and water are relatively safe my workplace is held up to a minimum saftey(sic) requirement The FDA/OSHA usually look at records and see how companies follow their SOPs rather than seeing if the underlining food, toys or work conditions are safe. Not that expensive.

The trillion dollar question is the income tax legal?

here's a great video
Sure mode me down for being a troll, but at least respond with facts.

That's easy. So the feds go to five banks instead of two credit card payment processors (small groceries don't usually take American Express). What does that cover, maybe 75% of all credit cards?

http://www.fdic.gov/bank/analytical/banking/2005nov/Art2table2.html

Remember Bank of America bought MBNA.

Your check to the dealership should still be good, up until ING completes the aquisition.

See section 4 of:
http://www.fdic.gov/bank/individual/failed/netbank.html

To those who are wondering, "what happened to the FDIC?": The FDIC supervises regular banks. NetBank was a "thrift" a weird institution that appeared when the Reagan administration deregulated banking, allowing depositor-owned savings and loan associations to convert to a sort of commercial bank that specializes in mortgages. Thrifts have a long history of getting in over their heads, and creating real estate "booms" that price most people out of the home market. But a lot of folks got rich off them, so I guess that's OK.

I hope [ING's] lending requirements are a little more solid (I hold an Electric Orange account there).

ING only bought the deposit accounts. Most of NetBank's mortgages are going to Everbank, apparently with the bad one staying with FDIC until they can find a sucker^wbuyer. In any event, deposits at NetBank are insured, so few account holders will lose money (the exceptions being about 1500 people who had more than $100,000 on deposit.

The FDIC has a whole list of failed banks. Apparently, it happens with some regularity, and it seems to be mostly a non-event for bank customers. Sucks for employees and shareholders, but that's business.

This excerpt will probably have more impact.

"... when Visa and MasterCard were building their dominant credit card networks, they imposed exclusionary rules and restrictions on other parties to credit card transactions. In two cases, whose outcomes are described in this section, merchants and the U.S. Department of Justice (DOJ) successfully challenged some of these practices. The decisions in the two cases29 weakened some barriers to competition and reduced the control exercised by the card associations, thus influencing the future of the credit card industry. In fact, the aftereffects of the decisions have already begun appearing."

http://www.fdic.gov/bank/analytical/banking/2005no v/article2.html

I wish more people understood how badly de-regulation has screwed the average American banking/stock trading customer.

Bank of America is not going to fuck over customers

You must be new here.

Please, examine carefully BofA's role in the U.S. financial system before making such a careless statement. Look carefully at who controls Visa and Mastercard.

Among other important things to understand is that BofA profits quite handsomely while consumers bear increased costs for everything purchased at retailers that accepts card payments.

"Despite merchant discontent, card issuers have incentives to maintain or increase interchange fees. Issuers are marketing credit cards with reward or loyalty programs that encourage greater card use and reinforce customer loyalty to the brand. An estimated 12 to 24 percent of cards held by consumers have rewards associated with them,26 and in 2003 an estimated 60 percent of credit card spending was attributed to cards with rewards.27 Card issuers are funding these increasingly popular reward programs through interchange fees."

http://www.fdic.gov/bank/analytical/banking/2005no v/article2.html

I would argue that this one excerpt alone is enough to be concerned about BofA's impact on our economy.

In the US, bank deposits are insured by a government-run agency called the Federal Deposit Insurance Corporation. Had this crime occured in the US, taxpayers would be the victims, not the bank or the customers.

FDIC insures the bank customer against bank failure (as in going out of business).

http://www.fdic.gov/about/learn/symbol/index.html

They also enforce the Electronic Fund Transfer Act. That may address this particular problem, if it's an EFT that you (or someone you authorized) did not make.

Maybe some others with merchant experience can back me up on this, but most of the fraud is actually assumed by the merchant.

The abuse the banks dole out to retailers is so bad Walmart is setting up their own bank just to get a piece of the scam. http://www.fdic.gov/regulations/laws/walmart/index .html They had to drag the banks to court just to get them to stop abusing them on transaction fees.

In the end, the merchant will pay dearly for the priviledge of accepting a payment made with phished cards. That means the consumer will end up pay slightly more overall for everything.

"Yup!"
So you agree that Pro-choice goes both ways.. lets see...

"But if they fire you because you remind them of their ex-*friend or their mother inlaw, that's fine?"
Yup. You are only thinking of freedom for employer. What about freedom for employee? You don't need a reason to fire someone if you live in "hire-at-will" state as long as you are not firing anyone based on race, sex, religion and age which are protected by Constitution.

"But if I discover I'm a "cat person", and want a cat, they can kick me out?"
Yup. Cats are not protected by Constitution as humans. Animals Rights Act doesn't cover rent right issue.

"So they lose me as a customer, and unbiased people get more business. Jerks losing money is a bad thing?"
It's not about "jerks" losing money. It's about your equal right to access public facility. Someone puts business in public regardless it's privately owned or publically traded, "jerks" are to obey the law of the land, not obey only when it favors his/her preference.

"If they don't want to give you money, why should they be forced to? It belongs to them."
First of all, no money given by FDIC insured banks are excempted from FDIC rules and regulation. http://www.fdic.gov/regulations/laws/rules/2000-60 00.html
If they don't want to be insured, banks can surely do without one could do business. It's called "loan sharks" and surely they can discriminate all they want.

"Bathroom is for paying customers only".
Good point. But if that sign says "Bathroom is for CERTAIN paying customers only," and you and your girlfriend have to piss by tree, you'll literally be "pissed," too.

So we outlaw FUBU and women-only gyms?"
First of all, FUBU means "For Us, By Us" so where do you get that idea that it's only for "certain" people? Now, "women-only gyms" is the good example. IMHO, it's unconstitutional. As some states already illegalized this type of estabilishment, but Penn. and Mass has voted in favor of single-sex gym. So the issue is still out there.
http://archives.cnn.com/2000/HEALTH/diet.fitness/0 5/31/women.only.wmd/
When NOW (National Organization for Woman) fights against women-only gyms, we know this issue is screwed up (without taking any side).

"...when it comes to friends, family, associates, business partners, lovers, spouses, and people that ask me for dates I can discriminate freely by sex, age, intelligence, politics, race, beauty and kindness..."
No. I rather have woman date me regardless. Matter of fact, it should be law that all woman should date me. I don't discriminate love~ or casual sex for that matter... (oh god..)
Anyway, my point is, it's your life and your freedom, not other's you are affecting when it comes to your personal relationship. It's that "CERTAIN" kind of discrimination that made it possible for racism and separatism/sectarian states to be TOLERABLE in our previous society. Didn't we already learn this lesson during CIVIL WAR and Civil Rights Movement???

In the Western mind, all crimes against property are a form of theft. In any advanced commercial society immaterial property is still property.

The only form of property that, in the end, really matters.

"Identity Theft" makes its first appearance in American statutory law in 1998. Putting an End to Account-Hijacking Identity Theft Now the phrase is in common usage.

I believe the OED traces the linkage of copyright infringement and piracy back to 1710 and the beginnings of copyright law, in an era when sea-going marauders were still in business.

This is not a battle the Geek can win.

Yes, what about the S&L heist? Carter's reregulation of the S&Ls made their deposits investable in more than just buildings, and raised the government insurance from $40K to %100K. A measure to increase the investable cash being held by these rich people's banks that they were witholding from the economy, and to lower the risk of investment, by government indemnification.

Then Bush, as VP, oversaw the subsequent reckless deregulation of the S&Ls. Removing their requirements for things like collateral, or sufficient deposits. Reagan/Bush oversaw the recession of 198s which, in combination with their deregulation program, transformed the American economy. The S&Ls invested in new "junk bonds", like craps at a casino: a few big winners, and a guaranteed huge loss overall in these voodoo economic tricks. Meanwhile, the S&Ls also invested in worthless real estate in Southern California and Texas (where Reagan and Bush came from, respectively), pumping billions into the pockets of Reagan/Bush bribers^Wsupporters. Along the way, Bush got the S&L heist smokescreen to cover some "small" ripoffs to finance Iran/Contra, along with his royal Saudi buddies (see previous post).

By 1989, when the S&Ls were collapsing under the weight of all their bad loans, Reagan/Bush had overseen the industry for 8 years. If Carter in fact had done anything to cause it, they had nearly a decade of their "revolution" to undo it. In fact, they did it, and did it to death. And I'm still paying off their heist. Your mistaken assertion is right along the rightwing blinder policy that will blame Clinton for Bush's Iraq catastrophe. You vote for these criminals - you have to take the punches they throw at our country. Don't try to duck the blame when someone like me, who saw it all happen, tells the truth about their crimes.

It very well may (and probably will) take past Dec. `06, but the key piece to remember when reading any legislation, regulation or guidance on such, is the interpretation varies.

What works for Wells Fargo regulators for "effective methods" of control does not mean that works for First National Bank of Podunk.

From the actual FIL [emphasis added]:

• Financial institutions offering Internet-based products and services should use effective methods to authenticate the identity of customers using those products and services.
• Single-factor authentication methodologies may not provide sufficient protection for Internet-based financial services.
• The FFIEC agencies consider single-factor authentication, when used as the only control mechanism, to be inadequate for high-risk transactions involving access to customer information or the movement of funds to other parties.
• Risk assessments should provide the basis for determining an effective authentication strategy according to the risks associated with the various products and services available to on-line customers.
• Customer awareness and education should continue to be emphasized because they are effective deterrents to the on-line theft of assets and sensitive information.

With changes implemented for Check21 compliance (check imaging, shorter processing time) and a 60-second window for a MITM attack with two-factor, I'm willing to pay for my own damn token (or certificate) if necessary, for the added protection. Of course, my password is also 8 chars, random letters/numbers (thanks, Wells Fargo, for that upper limit...) changed quarterly...

More importantly, the FFIEC doesn't consider email a secure method of communication anyway. They probably wouldn't allow the code to be sent via email.

http://www.fdic.gov/news/news/financial/2004/fil27 04a.html (This is from the FDIC, but you get the picture).

No problem - the FFIEC isn't so sure about open source software either FFIEC Guidance on open source software

"Again, the money didn't disappear, There isn't a black hole the money disappears into never to be seen again. It just ends up in someone else's hands. Or it's wasted but even then it still doesn't disappear."

Tell that to the Enron/WorldCom investors or the S&L scammed folk who to this day haven't seen their money.

http://www.fdic.gov/bank/historical/s&l/

Sure, safeguards for these specific frauds have been implemented in hindsight but that doesn't stop the future fraudsters or get the money that was stolen back...

B.

Go back a 100 years and read it this way: Do you really want the future of money transactions to be entirely banking based and saved in somebody else's safes?

Actually before the advent of the FDIC and NCUA you would have had very good reason for not wanting to keep your money in a bank or credit union. Just ask anybody who grew up in the depression.

I don't see a Government backed insurance company out there protecting my data. More to the point I don't see the Government forcing a reasonable privacy policy on data providers either.