FDIC

I respect Ron Paul and I would like to pass on some suggestions on improving trust and confidence in the FDIC and the banking industry. I would respect anyone who could also pass these suggestions on to their Congressperson, FDIC Chairwoman Sheila Bair, or President Obama.

1) Follow Germany's examples and fully insure depositors' accounts, no matter what the amount and whether or not the accounts are interest-bearing accounts or not. The fact that any depositor has to lose money is disheartening. Any depositor is helping the bank, the FDIC, the economy, and the country by putting money into the banks, so the depositor should not be punished by taking away their money when the bank fails.

Some say that stupid people shouldn't have had money above the insurance limit in the account, but that is cruel and unfair. Congress bailed out the biggest banks without questioning the stupidity of bank leaders and they got billions of dollars. Let’s help the depositors who trusted the banks but made a mistake.

2) Make whole any depositor that lost any amount of money in any of the banks that failed in 2008. Again, this would be great public relations by the FDIC and the government. Returning depositors lost money would be a wonderful way to improve trust and confidence in our banking system. To me and possibly too many others, we saw billions of dollars going to the 9 largest banks, yet depositors of uninsured amounts lost money. This reeks of unfairness.

3) Publish the list of the 171 or so troubled banks. I believe that the FDIC does not do this because they are afraid that concerned depositors will take their money out of the bank. In capitalism, shouldn’t the weak, ineptly-managed banks fail? Shouldn’t the depositor have the information to make an intelligent decision on the health of your bank? We have companies or agencies ratings stocks, bonds, mutual funds, and consumer goods, so how come we don’t have any ratings on banks which store our cash?

Every unannounced bank failure scares the pants off the individual depositors. It’s not funny on Friday to hear someone joke, “It’s Friday; do you know if your bank crashed today?” The 7,500 good banks are suspect because of the actions of the 171 troubled banks. The public doesn’t know which bank is the good bank. Depositors are playing bank roulette with their hard-earned money.

To me, it seems that with the FDIC hiding the names of the bad banks, it only fosters distrust and a lack of confidence in the banking industry, the economy, Congress, and the rest of the government.

In short, the FDIC should be proactive and guarantee 100% of deposits, without limits or fine print exceptions; reimburse bank depositors who lost any money in 2008 to current; and publish the list of troubled banks.

Best regards,

Lee Ellak
San Jose, CA