Thursday, March 26, 2009

Your local bank under attack.

I live in a small town.  My company does business there.  It is a well run, financially solid institution.  They take their business seriously.  And they, along with thousands of sound banks, are being punished by the federal government. 

FDIC Extends Restoration Plan; Imposes Special Assessment

February 27, 2009

Media Contact:
David Barr (202) 898-6992

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today voted to amend the restoration plan for the Deposit Insurance Fund (DIF). The Board also took action to ensure the continued strength of the insurance fund by imposing a special assessment on insured institutions of 20 basis points, implementing changes to the risk-based assessment system, and setting rates beginning the second quarter of 2009.

Think about that.  A "special assessment" of $.20 for ever $100 on deposit.  In many cases, this may well be the profit margin for small, private banks.  How can our government punish well run banks in such a way.

Oh, sorry, I forgot - simply because they can.  And no Geither wants "un-precedent " power to seize institutions the government deems to be in trouble.  Hello??  America??  Anyone watching??

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