3 ms·

The FDIC does not insure against fraud, theft or accounting errors. It only protects against bank insolvency due to under-capitalization.

• mcherm 11y ago
  That isn't QUITE true. There are enough details that I can only speak in generalities, but in general, ordinary consumer accounts are indemnified against fraud and theft by the bank itself. US law requires that banks cover all or nearly all of a customer's losses to most sorts of fraud and theft (which it is depends on the kind of payment system) so long as it is a regular consumer account (small business accounts, for instance, may be out of luck) and the customer reports it within certain legally mandated time frames. If the fraud is so extensive that the bank cannot afford to reimburse all of the customers, then the bank is undercapitalized and will be taken over by the FDIC.