The Financial Reform Act, more formally known as the Dodd-Frank Wall Street Reform Bill and Consumer Protection Act (H.R. 4173), has its share of supporters and critics. But not everyone’s crying in their beer over the legislation; 9,000 or so Americans made out like bandits on a unique provision in the act.
When the economic crisis reached full force in 2008, the federal government stepped in and hiked the Federal Deposit Insurance Corp. (FDIC) bank deposit insurance limit from $100,000 to $250,000. At the time, the move was expected to be a temporary one — it would offer increased protection for bank deposits until the economic hurricane blew over. The official date for the new $250,000 level to expire was Jan. 1, 2014.
In brief, the FDIC insurance program works like this. Every dollar you deposit up to $250,000 in an FDIC-insured bank is insured if your bank fails. It’s an important piece of protection, considering the number of U.S. banks that have dissolved in the last few years. A recap from TheStreet:
Year Bank Failures
2010 108 (through July 30)
That’s 273 U.S. bank failures in what economists describe as the Great Recession — reason enough to be concerned about your bank deposits.
Fast-forward to 2010, when Congress heatedly debated terms of the Dodd-Frank bill. As finishing touches were put on the bill, a provision was included to make permanent the FDIC insurance hike to $250,000. And by the time Congress passed the bill on July 15, the hike — along with the rest of the bill — was voted into law.