A little known clause in the gigantic Dodd-Frank financial reform bill went into effect January 1st. All funds in a “noninterest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012.
This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC’s general deposit insurance rules.
It is unclear the purpose of this temporary status, but certainly we can speculate that it is to protect the elite’s deposits should another catastrophic financial collapse happen in the next two years.
The official purpose as stated by the financial bill itself is beyond convoluted:
The proposed rule serves as a vehicle for the FDIC Board of Directors to announce that it will not extend the TAGP beyond the scheduled expiration date of December 31, 2010. Because of the differences between the TAGP and the new statutory provision, changes to the rules are necessary.
Say what? It seems that the designers assume another financial crisis is looming and they want to make sure that the taxpayers will be on the hook for the potential billions in private bank losses.
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