Depleted Funds to Cost Consumers

Posted by Tracy in Consumer Headlines and has No Comments
Aug 31 2009

The FDIC reported that the number of distressed banks hit the highest level in 15 years, depleting the Deposit Insurance Fund by 20% in the second quarter…and the trickle down effect is likely to cost consumers in the form of fees and stricter lending standards.

In response to the depleted reserves, banks will consider raising fees on credit, checking, and ATM’s. Additionally, interest rates on consumer loans may increase and interest rates on deposits are likely to decrease.

The FDIC Chairwoman reassured consumers that during the 75-year history of the FDIC, “no insurer depositor has ever lost a penny of insured deposits…and no one ever will.” She said the reserves are shrinking, but are still safe.

To see how safe your bank is, check out Bankrate’s Safe and Sound® service, which rates financial institutions based on a series of 22 tests.

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