Anyone who banks has seen the phrase “FDIC Insured,” but to make sure that they know what it means, the Federal Deposit Insurance Corporation (FDIC) has kicked off a campaign to educate people about federal deposit insurance and the benefits of patronizing financial institutions that are FDIC insured.
“People know the letters FDIC, but they don’t necessarily know what deposit insurance means, how it works, and that there was recently an increase in the deposit insurance limit,” explains Sandra Thompson, director of the division of supervision and consumer protection. “We really believe that African Americans need to understand what deposit insurance is, how it works, and what the limits are.”
To spread the word, the FDIC introduced an electronic deposit insurance calculator on its Website, and is sponsoring public service announcements to be broadcast on urban radio stations. The calculator is also available in Spanish. The radio spot gives a toll-free phone number (1-877-ASK-FDIC) that African Americans can use to ask questions about deposit insurance.
FDIC insured institutions will insure up to $250,000 of an individual’s deposits at a single bank when those deposits are held in different “ownership categories,” such as single, joint, and trust accounts.
The campaign comes at a time when African Americans are likely to be less familiar with the FDIC than the general market but are more interested in learning about the FDIC and how it works, according to data from a 2001 FDIC study.
Deposit insurance isn’t the only area where the FDIC is educating banking customers. After it was appointed conservator of Indy Mac, a failed financial institution that had been crippled by overpriced mortgage securities, the FDIC spearheaded a loan modification program to assist Indy Mac mortgage customers.
To help other financial institutions with modifying loans, the FDIC created Mod-in-a-box, an online tool that helps determine whether a homeowner can restructure a securitized loan – one that has been pooled with other mortgages and sold — and prevent foreclosure.