Comment by bogomipz | Hacker News Reader

Comment by bogomipz | Hacker News Reader

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>"It's extremely unlikely anyone, anywhere, would be at risk of losing any deposits - insured or uninsured - in this day and age in the US regardless of the FDIC's 'new' position."

When IndyMac Bank failed in the 2008 financial crisis, the FDIC paid uninsured depositors 50 cents of every dollar[1][2][3]. I would say that very much of "this day and age."

From the FDIC's IndyMac Resolution:

"If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of IndyMac Bank, F.S.B. This means that you will eventually recover some of your uninsured funds. The FDIC declared a 50% advance dividend for uninsured deposits."[2]

It's bizarre to argue that what was literally an exceptional decision(SRE) by the FDIC could not have been otherwise.

[1] https://www.ocregister.com/2009/07/13/indymac-customers-stil...

[2] https://www.fdic.gov/resources/resolutions/bank-failures/fai...

[3] https://www.brookings.edu/2023/03/21/how-does-deposit-insura...

> When IndyMac Bank failed in the 2008 financial crisis, the FDIC paid uninsured depositors 50 cents of every dollar[1][2][3]. I would say that very much of "this day and age."

And after that banking rules became a lot stricter to reduce the risk of this happening again.

That's kind of the point, 2008 isn't "this day and age."

>"And after that banking rules became a lot stricter to reduce the risk of this happening again."

Except that Dodd-Frank legislation was continuously chipped away at, ultimately resulting in the 2018 "Economic Growth, Regulatory Relief, and Consumer Protection Act in 2018."[1].

This 2018 bit of legislation is notable in that it completely loosened the regulatory regime and oversight of small and midsize banks - the exact profile of institutions being discussed here!

Specifically this new legislation reduced the number of banks that were subject to stronger federal oversight. Under the Dodd-Frank legislation, banks with assets of more than $50 billion were subject to stress tests and higher capital requirements.

The newer 2018 legislation contained a section that basically eliminated that stronger regulation for banks with assets between $50 billion and $100 billion and moved the goal posts of "discretionary oversight" out to financial institutions with assets between $100 billion and $250 billion instead.

It's fascinating that you are arguing points without seeming to have an understanding of all that has changed since Dodd/Frank 13 year ago. You seem to be completely unaware of the developments since 2018 i.e the exact things that enabled the developments of the last two weeks.

[1] https://www.investopedia.com/terms/d/dodd-frank-financial-re...

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