Important Banking Information From Bernie Sanders

Zombie Banksters

Today I am going to post a letter that was written to me by Bernie's Senate office in answer to a question I had about the safety of bank deposits in to big to fail banks and the FDIC.

His answer was specific to my question, informative and detailed.  I post it here in its entirety:

Dear Mr. Wolf:

Thank you for contacting me regarding the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on Federal Deposit Insurance Corporation (FDIC) insured accounts. You will be pleased to know that this important new law does not put your put your savings in FDIC accounts at increased risk.  In fact, the FDIC, which is an independent agency of the U.S. government, exists solely to protect you against the loss of your deposits if an FDIC-insured bank or savings association fails.  Moreover, FDIC insurance is backed by the full faith and credit of the United States government.

As you mentioned, Dodd-Frank made multiple reforms to make FDIC insured accounts more secure. In the event of a bank failure, the FDIC ensures that depositors receive the full value of their deposits – including principal deposits plus accrued interest – up to the insurance limit.  The Dodd-Frank Act permanently expanded the deposit insurance limit from $100,000 per account to $250,000, providing additional protection for consumers.  The FDIC also assumes the task of selling/collecting the assets of the failed bank and settling its debts, including claims for deposits in excess of the insured limit.  Thus, in some cases it is possible to receive more than the insurance limit of $250,000.

The Dodd Frank Wall Street Reform and Consumer Protection Act made many other changes to strengthen the FDIC, a complete list of which can be found here. 

Despite these new protections, there is still work to be done to stabilize the banking system and to make sure it meets the needs of ordinary working Americans and retirees. Today, the six largest financial institutions have assets equal to nearly 60 percent of our country's entire GDP. They handle two-thirds of all credit card purchases, control one-third of all mortgages, and hold nearly 50 percent of all bank deposits. Incredibly, the biggest banks are 80 percent larger than they were one year before the financial crisis. These banks wield a tremendous amount of power over working and middle class Americans through their control of credit interest rates and through new fees on debit card purchases.  It's clear that we need to reform the banking industry.  There are a number of commonsense ways to do this.

It is my opinion that if a bank is too big to fail, it is too big to exist. It is time to take a page from Teddy Roosevelt and break up these behemoths so that their failure will no longer lead to economic catastrophe and so that we can create competition in our financial system. On May 6, 2015, I introduced the Too Big to Fail, Too Big to Exist Act, which would break up these behemoth banks.  This legislation would give the Treasury Department 90 days to identify which commercial banks, investment banks, hedge funds and insurance companies pose structural risk to the economy, and then would require the Treasury to break-up those banks within a year. 

Clearly, Congress must act aggressively to make the financial industry pay attention to the needs and concerns of working American families and small businesses, and to eliminate the recklessness and illegal behavior on Wall Street that drove this country into the worst recession since the 1930s.

Thank you again for contacting me, and please feel free to stay in touch about this or any other subject of interest to you.  For up-to-date information on what I am working on, please sign-up for my e-newsletter, the Bernie Buzz, at http://sanders.senate.gov/buzz/.

Sincerely,

BERNARD SANDERS
United States Senator