Home -> Law Blog Directory -> Insurance Law Blogs -> Insurance Claims and Issues

Insurance Law

: Insurance Claims and Issues

Federal Deposit Insurance Corporation Becoming Federal LOAN Insurance Corporation.

The Federal Deposit Insurance Corporation provides security for bank deposits. Literally. Its mission is to provide insurance for deposits. Its ability to take on obligations is capped by Federal Law at $30 Billion or $30,000,000,000.00. See Andrew Ross Sorkin, "Dealbook/'No-Risk' Insurance at F.D.I.C." p. B1, col. 1 (New York Times Nat'l Ed., Business Day Section, Tuesday, April 7, 2009).

Now it is proposed that the FDIC also become the FLIC, the Federal LOAN Insurance Corporation. Under the pending Treasury Department proposal for a "public-private initiative" to buy toxic assets, the FLIC, er, FDIC would insure up to 85% of all investments by private parties. Unfortunately, the projected exposure to insure up to 85% of all investments is reportedly between $1 Trillion and $2 Trillion, or between $1,000,000,000,000.00 and $2,000,000,000,000.00. See id. The cap of $30 Billion would stay. The current Administration clearly does not want to ask Congress to change the cap.

This is where lawyers and CPA's apparently have rushed in, both groups clearly consulted for the purpose of providing desired opinions.

Unknown, unnamed "lawyers" gave an interpretation of this Federal Law in October, 2008 to Ms. Sheila Bair, head of the FDIC. They reportedly interpreted the $30 Billion cap to apply to "contingent liabilities," meaning the "expected cost" to the FDIC.

"That's how we've interpreted it," Ms. Bair relayed. Id.

When the lawyers were done, unknown and unnamed CPA's stepped in to tell Ms. Bair and the FDIC that they project no losses to the FDIC for insuring $1 Trillion in investments under the new Treasury Department "public-private initiative". The "expected cost" to the FDIC is thus nothing.

"Our accountants have signed off on no net losses," Ms. Bair reported. Id.

In the real world, the "insurance" proposed to be provided by the Federal Loan Insurance Corporation, without changing its name from the Federal Deposit Insurance Corporation, is really a guarantee by the Federal Taxpayer that will not be paid, in the event of a disaster, by unknown, unnamed lawyers and CPA's. The payments then will come strictly from the Federal Taxpayer. Guaranteed.

Please Read The Disclaimer.

Full post as published by Insurance Claims and Issues on April 08, 2009 (boomark / email).

Related Law Questions

Does a Chapter 7 bankruptcy discharge a secured mortgage loan?
Yes if you file they cannot sue you to the knowledge I know. My brother is in re...

My father is aging. We both agree we need to secure property that has been in the family well over sixty years. The problem is my uncle name was previously on the property who is now deceased and also took out two loa
buy the house from him . that would pay the old loan and title the property to y...

We have an equity line of credit and just finished our bankruptcy case. During the bankruptcy, we came to find out the bank that has our equity loan does not have any of our paperwork. they ignored my calls to try to dig
Tough one. Letter of the LAW and SPIRIT of the LAW. You signed the papers in goo...

How can I break my lease due to poor car parking facilities?
You can leave the apartment and break your lease, before doing so, make sure you...

Can a former employee use photographs of jobs completed whie working for me in marketing material for a new business?
There are several issues here

1. Sub contractor started up a compe...

Lawsuits and Settlements

Wachovia Corporation WB Securities Fraud
Wachovia Corporation WB

AARP Insurance
alleging misleading medical insurance policies.

LINA Insurance
alleging violations of disability insurance claims.

Oxford Health Insurance
$50 million refunds offered in overcharged insurance suit.

Taylor Bean Faces Federal WARN Class Action
Taylor Bean Federal Employment Class Action Filed

R.H. Donnelley Corporation RHDQC Securities Fraud
R.H. Donnelley Corporation RHDQC

#1 Online Legal Resource

Class Action Lawsuits

Celebrity Justice

OJ Simpson

US Law Tweets

Legal advice for early stage start-ups from facebook's venture fund
On 08-28 at 21:13PM

Ten months later, Fed must reveal names of emergency lending recipients #FOIA
On 08-25 at 19:02PM

Squeaky Fromme, would-be Ford assassin and Manson devotee, released from prison
On 08-14 at 15:19PM

Likely unintended consequence of cash-for-clunkers stimulus is dampening of 2010 spending
On 08-14 at 14:34PM

Palm seeks to halt Palm Pre Android theme on copyright and trademark ground
On 08-12 at 17:30PM

Congressional investigation demonstrates Karl Rove lied about his active role in US attorney's firing
On 08-12 at 16:20PM

Family of New York City swine flu victim to sue city for failure to secure school #nyc #swineflu
On 08-12 at 12:59PM

Real Network's DVD copying software deemed to break DMCA's anti-circumvention provisions
On 08-12 at 12:57PM

Prepaid funeral operators indicted for $100 Million fraud
On 08-12 at 12:53PM

NY Jets join Cincinnati, Dallas, Green Bay, Houston & Seattle #NFL teams offering branded state lottery games
On 08-12 at 12:43PM

FOLLOW USLaw.com ON TWITTER

Custom Legal Documents

Your Blog Subscriptions Subscribe to blogs

What is this?

10,000+ Law Job Listings
Lawyer . Police . Paralegal . Etc

Earn a law-related degree

Are you the author of this blog? Adding USLaw.com to your Blogroll increases relevance. You qualify to display a USLaw Network badge.

Suggest changes to this blog's description or nominate another for inclusion. Register for updates.

Does a Chapter 7 bankruptcy discharge a secured mortgage loan?
Yes if you file they cannot sue you to the knowledge I know. My brother is in re...

How can I break my lease due to poor car parking facilities?
You can leave the apartment and break your lease, before doing so, make sure you...

Can a former employee use photographs of jobs completed whie working for me in marketing material for a new business?
There are several issues here

1. Sub contractor started up a compe...