Senate Moves to Loan FDIC $500 Billion

I bet $500 billion is just the appetizer. The FDIC is going to need much more than that to cover failed banks this year and next. It's "Bank Failure Friday", let's see how many bite the dust tonight.-Lou

Senate Moves to Loan FDIC $500 Billion

Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The Connecticut Democrat's effort -- which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner -- would give the FDIC access to more money to rebuild its fund that insures consumers' deposits, which have been hard hit by a string of bank failures.

Last week, the FDIC proposed raising fees on banks in order to build up its deposit insurance fund, which had just $19 billion at the end of 2008. That idea provoked protests from banks, which said such a burden would worsen their already shaken condition. The Dodd bill, if it becomes law, would represent an alternative source of funding.

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http://www.foxnews.com/politics/2009/03/05/senate-moves-loan-fdic-billion/