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FDIC insurance

The Emergency Economic Stabilization Act of 2008 temporarily increased deposit insurance to $250,000 from October 3, 2008, through December 31, 2009; but it has now been extended to December 31, 2013. Also, due to the large number of failed banks in recent weeks, there's an important issue regarding FDIC insurance depositors need to be aware of. While it is true an FDIC-insured depositor has never lost money on a claimed qualified account, there is a very important caveat: If an insured depositor fails to make a claim an insured or transferred deposit within 18 months after the FDIC initiates the payment of insured deposits, the transferee institution must refund the deposit to the FDIC, and all rights of the depositor against the transferee institution are barred. The FDIC then remits the insured deposit to the custody of the unclaimed property administrator in the account owner's home state, unless that state declines to accept custody. Upon delivery, the FDIC is deemed to have made payment to the depositor, and all rights of the depositor against the FDIC are barred. Most states allow claims in perpetuity, but there's a reversion clause. If a depositor does not claim the deposit delivered to the custody of the State within 10 years of the date of delivery, the deposit must then immediately be refunded to FDIC, and all rights of the depositor against the state and the FDIC are barred. It's important to note that If a state declines to accept custody of the deposit - which they sometimes do - the depositor must claim the funds from the FDIC before the receivership is terminated, or all rights of the depositor with respect to the deposit are barred. Dividends for credits arising from uninsured portions of a deposit may, however, be claimed after the receivership is terminated if a dividend check was returned by the post office for a bad address. Depositors should also be aware that due to the large number of mergers and acquisitions in the banking industry over the years, it is possible they or a deceased family member might well have an account at a failed bank and not know it. Finally, unclaimed safe deposit boxes at closed branches may be drilled and the contents sold at auction just weeks after closing, so prompt action is advised. Details on individual failed banks and respective claims procedures are available at: www.failedbankreporter.com

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