Land of Oz

FDIC

Last year, DeMotte paid $42,000 into the fund [FDIC]. This year, because of failures in other parts of the country and particularly among national banks, that sum will rise to $500,000 or more.

Here's something you don't hear much about. Who pays for FDIC. If you don't know, FDIC is the insurance that covers your bank account. It used to be up to $100K and now is up to $250K. This is for people whose banks invested stupidly and now are looking at closing. The FDIC will make good on your account.

Mr. Goetz is the president of the DeMotte bank - a plain dull local bank in Indiana. This bank isn't going under. It also isn't paying 15% returns on investments or loaning big bucks to people who don't have a chance in the world of paying those big bucks back. In other words, it's a safe, comfortable place to keep your money to do safe, comfortable things with. It hasn't taken any "TARP" money from the government and it isn't in danger of closing. However, even after all that it is still suffering from the stupidity and mostly, greed, of the mega-banks.

One more reason why I don't like mega-sized businesses. Sure, in a mega bank, you might get a couple of percentage points more interest or in a mega depot, you might save a few percentage points on the cost of a gallon of paint, but there's still a high price to pay. I'd much rather deal with a Mr. Goetz at a local bank or Fred at the local mom and pop hardware store. Sure, I might pay a little more, but not in the long run.

Labels: government, scams