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The FDIC Might Be Affected by New Banking Regulation

Posted by: RateAPY Bank Rates News
December 17th, 2009

U.S. Senate Banking Committee Chairman Chris Dodd is working on the overhaul of banking regulation. Some of the changes that Senator Dodd wants to make could strip the FDIC of its role as banking supervisor. The FDIC would become an agency that cleans up busted banks, but has no control over them beforehand to prevent the trouble. Instead, there would be several new agencies, including the Consumer Financial Protection Agency, that would have the role of supervising banks.

Banks that offer certificates of deposit, money market accounts, and high-yield savings accounts would find themselves regulated by a brand-new body. They wouldn’t deal with the FDIC unless the worst happened and they went under.

Chief of the FDIC Sheila Bair is fighting to save her agency’s role as supervisor of banks. She has met with almost all of the lawmakers on capitol hill and is starting to make some progress.