The Truth About FDIC Insurance & The Big Banks

After the near financial crash of 2008, you could read daily in various newspapers of banks that went into foreclosure. In my profession I had business relationships with various people in the banking industry and it was explained to me that FDIC insurance is a pool of money that all banks must contribute to.  The contributions are based on each individual banks assets and balance sheets, etc.  After the numerous bank closures, the banks who had done well and had not taken the ridiculous risks in the Sub-Prime Mortgage Sector were then required to make large contributions back in to the FDIC.  Credit Unions use the same type of pools of insurance called NCUA.  I then learned a local Credit Union that was one of my clients, had received a phone call that their account would be drafted for over $300,000 within 48 hours as the contribution to NCUA.  This was a small Credit Union with only $35 million in assets.  They were told it was due to a multi-million dollar metro area Credit Union who had gone broke, and that they pool of insurance had been greatly reduced in trying to make the customers accounts whole again. The small credit union's budget had been completely blown and they were not able to give their employees raises that year.  But as you all know, we read and heard in the news that the big banks continued to give out their multi-million dollar bonuses after taking the taxpayers TARP money.

Having learned the truth about how these pools of insurance actually work, tells me that all if would take to wipe out this pool of money would be if one of the large banks went under, and it is apparent that there would not be any money left to cover any of the small banks.  It is also evident that the banks that operated prudently have had to carry the load for the large banks and their risky exposure to the toxic derivatives.  The same derivatives they have tried to hide from the American people, which led them to create the various scandals of LIMRA rates, precious metal markets, currency indexes.  

When you learn the truth you begin to realize that this insurance promise the banks give you is about as worthless as the paper money that has funded it. If anyone has information about the "New System" plan of insurance, it would be appreciated if you could post it!  I guess the question that has crossed my mind several times over the last few days is...........

Do I really want to give these same big banks my currency exchange business?