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Technically it goes: FDIC takes over bank -> FDIC allows people to pay off their loans with the same bank using funds at the same bank -> FDIC pays off insured

by HWR_14 3y ago

Technically it goes: FDIC takes over bank -> FDIC allows people to pay off their loans with the same bank using funds at the same bank -> FDIC pays off insured accounts and takes on debt from the bank -> Sells Assets -> Uses cash to pay itself back by being first in line with the courts. If it gets to Bank #2, it's not their problem and they specifically don't have to. Also, this wasn't a US bank! It wasn't under FDIC control. That payoff happens before bankruptcy. If the FDIC doesn't take over your bank it doesn't apply.

s1artibartfast 3y ago
>Also, this wasn't a US bank! It wasn't under FDIC control That's the part that I disagree with. My understanding is that FDIC took possession and sold off the International loans to bank number two, but did not discount them by the international account balances. It doesn't seem right to me that the FDIC can say "it's not my problem we don't have control“ while simultaneously taking and selling the international loans
- HWR_14 3y ago
  You are right the FDIC did take control. International accounts of the FDIC ensured banks are explicitly not protected. In any case, those people who complain should take it up with the FDIC.
  - s1artibartfast 3y ago
    Which they are, and FDIC now has to choose whether it's going to take back the loans it's sold off to pay the account holders. This isn't about what happens to FDIC insured accounts, it's about how to apply pre-existing FDIC policy for handling non-insured accounts. The regulation is very clear on how not insured accounts get offset in some cases and the regulations are unclear or discretionary in other cases. This goes full circle back to my original point that if the FDIC takes control of the International loans, but they should deduct the value of that counts from those loans, just like they did for the majority of the customers

by HWR_14 3y ago

s1artibartfast 3y ago

>Also, this wasn't a US bank! It wasn't under FDIC control That's the part that I disagree with. My understanding is that FDIC took possession and sold off the International loans to bank number two, but did not discount them by the international account balances. It doesn't seem right to me that the FDIC can say "it's not my problem we don't have control“ while simultaneously taking and selling the international loans

HWR_14 3y ago
You are right the FDIC did take control. International accounts of the FDIC ensured banks are explicitly not protected. In any case, those people who complain should take it up with the FDIC.
- s1artibartfast 3y ago
  Which they are, and FDIC now has to choose whether it's going to take back the loans it's sold off to pay the account holders. This isn't about what happens to FDIC insured accounts, it's about how to apply pre-existing FDIC policy for handling non-insured accounts. The regulation is very clear on how not insured accounts get offset in some cases and the regulations are unclear or discretionary in other cases. This goes full circle back to my original point that if the FDIC takes control of the International loans, but they should deduct the value of that counts from those loans, just like they did for the majority of the customers