The post The Dangerous Contradiction Within Higher Federal Deposit Insurance appeared on BitcoinEthereumNews.com. WASHINGTON, DC – AUGUST 18: The entrance to the Federal Deposit Insurance Corporation (FDIC) is seen on August 18, 2024, in Washington, DC. (Photo by J. David Ake/Getty Images) Getty Images More federal deposit insurance will weaken banks, depositors at banks, and the U.S. economy more broadly. Say what’s true repeatedly. To see the obvious contradiction in legislation meant to increase deposit insurance from $250,000 per account to $10 million per, simply look a little bit deeper into the details. The insurance is for non-interest-bearing accounts. Bank accounts that don’t pay interest speak loudly to the desires of the owners of those accounts. These are generally checking accounts. Owners of checking accounts want little to no risk. Call non-interest-bearing accounts what they are: money storage for everyday spending needs, debit cards, or just paying bills. By extension, banks logically take the desires of non-interest-bearing account holders very seriously. The money isn’t to be put at major or even minor long or short-term risk precisely because it’s expected to be easily accessible in penalty-free fashion as a consequence of no interest being paid on the funds. It speaks to the near total mismatch of proposed federal legislation meant to increase federal deposit insurance. The legislation implies that money placed in a checking account for everyday transactions is money that banks are routinely putting at risk. No, not at all. Which once again explains the lack of interest paid. Please think about this with substantially expanded FDIC insurance top of mind. Suddenly funds stored at banks for daily use, and that aren’t being put at risk for precisely that reason, would be federally insured as though they were. There are costs associated with such insurance. And as has been reported already, banks would be saddled with those costs through the payment of… The post The Dangerous Contradiction Within Higher Federal Deposit Insurance appeared on BitcoinEthereumNews.com. WASHINGTON, DC – AUGUST 18: The entrance to the Federal Deposit Insurance Corporation (FDIC) is seen on August 18, 2024, in Washington, DC. (Photo by J. David Ake/Getty Images) Getty Images More federal deposit insurance will weaken banks, depositors at banks, and the U.S. economy more broadly. Say what’s true repeatedly. To see the obvious contradiction in legislation meant to increase deposit insurance from $250,000 per account to $10 million per, simply look a little bit deeper into the details. The insurance is for non-interest-bearing accounts. Bank accounts that don’t pay interest speak loudly to the desires of the owners of those accounts. These are generally checking accounts. Owners of checking accounts want little to no risk. Call non-interest-bearing accounts what they are: money storage for everyday spending needs, debit cards, or just paying bills. By extension, banks logically take the desires of non-interest-bearing account holders very seriously. The money isn’t to be put at major or even minor long or short-term risk precisely because it’s expected to be easily accessible in penalty-free fashion as a consequence of no interest being paid on the funds. It speaks to the near total mismatch of proposed federal legislation meant to increase federal deposit insurance. The legislation implies that money placed in a checking account for everyday transactions is money that banks are routinely putting at risk. No, not at all. Which once again explains the lack of interest paid. Please think about this with substantially expanded FDIC insurance top of mind. Suddenly funds stored at banks for daily use, and that aren’t being put at risk for precisely that reason, would be federally insured as though they were. There are costs associated with such insurance. And as has been reported already, banks would be saddled with those costs through the payment of…

The Dangerous Contradiction Within Higher Federal Deposit Insurance

WASHINGTON, DC – AUGUST 18: The entrance to the Federal Deposit Insurance Corporation (FDIC) is seen on August 18, 2024, in Washington, DC. (Photo by J. David Ake/Getty Images)

Getty Images

More federal deposit insurance will weaken banks, depositors at banks, and the U.S. economy more broadly. Say what’s true repeatedly.

To see the obvious contradiction in legislation meant to increase deposit insurance from $250,000 per account to $10 million per, simply look a little bit deeper into the details. The insurance is for non-interest-bearing accounts.

Bank accounts that don’t pay interest speak loudly to the desires of the owners of those accounts. These are generally checking accounts. Owners of checking accounts want little to no risk. Call non-interest-bearing accounts what they are: money storage for everyday spending needs, debit cards, or just paying bills.

By extension, banks logically take the desires of non-interest-bearing account holders very seriously. The money isn’t to be put at major or even minor long or short-term risk precisely because it’s expected to be easily accessible in penalty-free fashion as a consequence of no interest being paid on the funds.

It speaks to the near total mismatch of proposed federal legislation meant to increase federal deposit insurance. The legislation implies that money placed in a checking account for everyday transactions is money that banks are routinely putting at risk. No, not at all. Which once again explains the lack of interest paid. Please think about this with substantially expanded FDIC insurance top of mind.

Suddenly funds stored at banks for daily use, and that aren’t being put at risk for precisely that reason, would be federally insured as though they were. There are costs associated with such insurance. And as has been reported already, banks would be saddled with those costs through the payment of billions more into the FDIC’s insurance fund.

It means banks will suffer twice: first through higher insurance costs, and second through a reduction in profitable lending. From this, readers can hopefully deduce that a needless cost imposed on banks would be paid for via reduced economic activity thanks to lending shrunken by federally mandated increases in insurance costs.

Returning to bank depositors, to presume that they won’t pay for increased deposit insurance is truly naïve. That’s because increased FDIC insurance on non-interest-bearing accounts will logically raise the costs for banks to host those accounts in the first place. Translated, fees associated with non-interest-bearing accounts will almost certainly increase to reflect the cost of insurance for accounts that, by virtue of them not paying interest, don’t require much insurance to begin with. The average household checking balance is $5,300.

Which brings us back to the legislation itself. To say it’s a solution in search of a problem insults understatement. Only it’s much worse. Since increased deposit insurance will raise costs for banks and bank customers alike, it will bring harm to both while sapping economic vitality by reducing the availability of money for an economy reliant on it.

Source: https://www.forbes.com/sites/johntamny/2025/12/02/the-dangerous-contradiction-within-higher-federal-deposit-insurance/

Market Opportunity
Dogechain Logo
Dogechain Price(DC)
$0.000006582
$0.000006582$0.000006582
-2.44%
USD
Dogechain (DC) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Gold Hits $3,700 as Sprott’s Wong Says Dollar’s Store-of-Value Crown May Slip

Gold Hits $3,700 as Sprott’s Wong Says Dollar’s Store-of-Value Crown May Slip

The post Gold Hits $3,700 as Sprott’s Wong Says Dollar’s Store-of-Value Crown May Slip appeared on BitcoinEthereumNews.com. Gold is strutting its way into record territory, smashing through $3,700 an ounce Wednesday morning, as Sprott Asset Management strategist Paul Wong says the yellow metal may finally snatch the dollar’s most coveted role: store of value. Wong Warns: Fiscal Dominance Puts U.S. Dollar on Notice, Gold on Top Gold prices eased slightly to $3,678.9 […] Source: https://news.bitcoin.com/gold-hits-3700-as-sprotts-wong-says-dollars-store-of-value-crown-may-slip/
Share
BitcoinEthereumNews2025/09/18 00:33
YouTube Advertising Formats: A Complete Guide for Marketers

YouTube Advertising Formats: A Complete Guide for Marketers

In today’s fast-evolving digital landscape, YouTube has emerged as one of the most powerful platforms for marketers looking to engage audiences through video. With
Share
Techbullion2026/01/21 01:49
Health Insurers To Cover Covid Vaccines Despite RFK, Jr. Moves

Health Insurers To Cover Covid Vaccines Despite RFK, Jr. Moves

The post Health Insurers To Cover Covid Vaccines Despite RFK, Jr. Moves appeared on BitcoinEthereumNews.com. The nation’s biggest health insurance companies will continue to cover vaccinations – including those against Covid-19 and seasonal flu – previously recommended by a federal advisory committee, America’s Health Insurance Plans said Wednesday, Sept. 17, 2025. In this photo is a free flu and Covid-19 vaccine shots available sign, CVS, Queens, New York. (Photo by: Lindsey Nicholson/Universal Images Group via Getty Images) UCG/Universal Images Group via Getty Images The nation’s biggest health insurance companies will continue to cover vaccinations – including those against Covid-19 and seasonal flu – previously recommended by a federal advisory committee. The announcement by America’s Health Insurance Plans (AHIP), which includes CVS Health’s Aetna, Humana, Cigna, Centene and an array of Blue Cross and Blue Shield plans as members, comes ahead of the first meeting of the reconstituted Advisory Committee on Immunization Practices, which now has new members chosen by U.S. Health and Human Services Secretary Robert F. Kennedy Jr., a vaccine critic. “Health plans are committed to maintaining and ensuring affordable access to vaccines,” AHIP said in a statement Wednesday. “Health plan coverage decisions for immunizations are grounded in each plan’s ongoing, rigorous review of scientific and clinical evidence, and continual evaluation of multiple sources of data.” The move by AHIP is good news for millions of Americans at a time of year when they flock to drugstores, pharmacies, physician’s offices and outpatient clinics to get their seasonal flu and Covid shots. Kennedy’s changes to U.S. vaccine policy have created confusion across the country over whether certain vaccines long covered by insurance would continue to be. AHIP has now provided some clarity for millions of Americans. “Health plans will continue to cover all ACIP-recommended immunizations that were recommended as of September 1, 2025, including updated formulations of the COVID-19 and influenza vaccines, with no cost-sharing…
Share
BitcoinEthereumNews2025/09/18 03:11