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Your Payroll Account is Now Fully Insured
By Bizbox
The Federal Deposit Insurance Corporation, the New Deal-created entity whose mandate is to insure all U.S. bank accounts up to a given amount in the case of bank failures, has been one of the brightest spots in terms of government intervention in the current crisis. Its head, Sheila Bair, has received plaudits for her nonidelogical, hypercompetent stewardship. From the perspective of small business owners, Bair and the FDIC full-throatedly endorsed the idea, instituted by Congress a few weeks back, to insure at least for the time being all bank accounts up to $250,000--a sharp jump from the prior $100,000 limit, and one likely to apply disproportionately (in a good way) to small businesses.
Now there is more news, directly from the FDIC, and it appears to be possibly the most direct help the federal government has offered to small business owners yet in its response to the current crisis. Yesterday, the FDIC announced that through the end of 2009 it will similarly insure all the money--up to a theoretically unlimited amount--in all non-interest-bearing bank accounts. Guess what sort of entity most frequently utilizes non-interest-bearing accounts with over $250,000 in them? Yup: small businesses.
According to the FDIC, "These are mainly payment-processing accounts, such as payroll accounts used by businesses."
The FDIC noted that the funds for this additional obligation will be raised via special fees, not ordinary tax revenue.
The program, Bair said in a statement, "allows bank customers to conduct normal business knowing that their cash accounts are safe and sound. This is the fundamental goal of deposit insurance, safeguarding peoples' money, and vital to public confidence in the banking system."
Just as much, this new move may prove vital to entrepreneurs' confidence in the government itself, and in its claims that it is looking out for them, too.
Comments (0)October 15, 2008 3:28 PM
