Thursday, October 22, 2009
Trick or Treat the Credit Union
Top Dawgs! Listen Up! Put on your scariest costume and get your parents to bring you to the Credit Union, Freiday October 30th between 3 and 5 pm for Treats, Prizes and Fun! See you then!
Thursday, October 8, 2009
Tuesday, October 6, 2009
International Credit Union Day!
October 15th is Credit Union Day! No one will want to miss this! We'll have live radio remotes at the Arnett Branch and the Lowes Drive Branch. There will be free food and drinks. The Danville Police Department is having free fingerprinting for children, the Humane Society will have adoptable pets and all the kids love the Rock Wall (Arnett). We'll have prize drawings too! You don't want to miss the fun - October 15th from 1 - 5 PM. See you there!
Thursday, October 1, 2009
Now's the time for you to consider URW Community FCU's safety and strength!
FDIC Begs For Money
Written by Alex Newman
Thursday, 01 October 2009 10:00
The Federal Deposit Insurance Corporation (FDIC) is asking banks to fork over several years’ worth of fees amounting to about $45 billion to prop up its dwindling insurance fund. A surge in bank failures throughout the economic crisis is threatening to sink the government agency’s cash reserves into the red very soon — possibly as early as this week.
The FDIC announced that it expects the cost of bailing out sinking banks’ depositors to reach $100 billion over the next four years, with most of that hitting sometime this year or next. But as recently as May, it estimated that figure at just $30 billion. So far this year, almost 100 banks have failed, with many more busts likely on the horizon. There are over 400 banks on the agency’s “problem” list, which has been notoriously generous in its ratings.
So the FDIC is proposing a novel approach — an accounting trick that would allow banks to pay fees they believe they will owe through 2012, but without really marking it down on their own balance sheet.
If the proposal is enacted after the 30-day public comment period, banks would be able to list the “prepayment” to the FDIC as an asset until it is exhausted. The asset would lose value every quarter when the normal payment would have been due. “For you and me, it would be like shoplifting at the supermarket and then dropping off cash every time you decided to eat something,” wrote Time magazine in an article entitled ‘FDIC in Red: Can an Accounting Trick Save the Agency?’
Another option would be to borrow up to $500 billion from the Federal Reserve via the U.S. Treasury, which it may very well still have to do. But so far, it has decided against that route.
“I do think that the American people would prefer to see an end to policies that look to the federal balance sheet as a remedy to every problem,” explained FDIC head Sheila Bair at a board meeting, noting that it is important for the industry to maintain public confidence and not “reflexively fall back on the public safety net” during tough times.
But, she added: “I never say never and there's much we cannot control for, particularly the speed and strength of the economic recovery. While we are optimistic on the economy, if conditions unexpectedly worsen, we could reach a point where we would have to tap our Treasury line, but today is not that day.”
But despite the reassurances, federal officials have been consistently wrong in their “optimistic” projections. And many analysts expect that they are wrong again. "It all works out nicely if the prepayment actually covers what the FDIC needs for the next three years," Time magazine quoted ISI Group bank analyst Ed Narjarian. "But more than likely, the FDIC is going to be back for more before the three years are out."
Other experts are even more pessimistic, like President of Euro Pacific Capital and U.S. Senate candidate Peter Schiff. “The reality is, this is just the tip of the ice berg,” he said, noting that the only reason the banks have this money for the FDIC right now is because of the government bailouts. “The FDIC is going to require hundreds of billions of dollars of taxpayer money — if not well over a trillion dollars — before it’s all said and done.”
The FDIC ensures deposits up to $250,000 per account for over 8,000 institutions, amounting to almost $5 trillion of taxpayer-guaranteed funds. And unfortunately for American taxpayers, U.S. banks are not in very good shape. A recent World Economic Forum analysis of countries’ bank soundness ranked the United States at 108th in the world, just behind Tanzania.
Schiff predicts more and more bank failures, and that the FDIC will make good on its promises to guarantee the deposits with taxpayer money — at great expense to America as a whole. “They’re going to make sure that nobody loses money, which means they are going to make sure that all of the money loses most of its value, which means everybody loses,” he said.
Besides the loss in federal reserve notes’ purchasing power — which negatively impacts all Americans — Schiff highlights another problem with the existing unconstitutional system of government deposit insurance. It abrogates the free market because it encourages banks to take on more risk to pay more interest on deposits, with depositors having no incentive to seek out more sensible banks since they know taxpayer will simply come to the rescue.
Bankers seem to be content with the FDIC’s proposal, especially if it means they can avoid having to pay higher fees and they don’t even have to acknowledge all of the outgoing money until 2012. More than likely, however, this is just a temporary solution.
Instead of accounting gimmicks and saddling American taxpayers with more risk and obligations, it is past time for true reform. Congress should start discussing and implementing real solutions immediately.
The entire financial world needs to be overhauled — no more secretive central bank funny money, no more “fractional reserve” banking and no more unconstitutional FDIC to transfer risk from banks to taxpayers. Sanity, morality, prosperity, and the Constitution demand nothing less.
Alex Newman is an American freelance writer and the president of Liberty Sentinel Media, Inc., a small media consulting firm. He is currently living in Sweden and has spent most of his life in Latin America, Europe and Africa. He has a degree in foreign languages and speaks Spanish, French, Portuguese, German, Italian and a little Swedish and Afrikaans. In addition, he earned a degree in journalism from the University of Florida, with emphasis on economics and international relations.
Written by Alex Newman
Thursday, 01 October 2009 10:00
The Federal Deposit Insurance Corporation (FDIC) is asking banks to fork over several years’ worth of fees amounting to about $45 billion to prop up its dwindling insurance fund. A surge in bank failures throughout the economic crisis is threatening to sink the government agency’s cash reserves into the red very soon — possibly as early as this week.
The FDIC announced that it expects the cost of bailing out sinking banks’ depositors to reach $100 billion over the next four years, with most of that hitting sometime this year or next. But as recently as May, it estimated that figure at just $30 billion. So far this year, almost 100 banks have failed, with many more busts likely on the horizon. There are over 400 banks on the agency’s “problem” list, which has been notoriously generous in its ratings.
So the FDIC is proposing a novel approach — an accounting trick that would allow banks to pay fees they believe they will owe through 2012, but without really marking it down on their own balance sheet.
If the proposal is enacted after the 30-day public comment period, banks would be able to list the “prepayment” to the FDIC as an asset until it is exhausted. The asset would lose value every quarter when the normal payment would have been due. “For you and me, it would be like shoplifting at the supermarket and then dropping off cash every time you decided to eat something,” wrote Time magazine in an article entitled ‘FDIC in Red: Can an Accounting Trick Save the Agency?’
Another option would be to borrow up to $500 billion from the Federal Reserve via the U.S. Treasury, which it may very well still have to do. But so far, it has decided against that route.
“I do think that the American people would prefer to see an end to policies that look to the federal balance sheet as a remedy to every problem,” explained FDIC head Sheila Bair at a board meeting, noting that it is important for the industry to maintain public confidence and not “reflexively fall back on the public safety net” during tough times.
But, she added: “I never say never and there's much we cannot control for, particularly the speed and strength of the economic recovery. While we are optimistic on the economy, if conditions unexpectedly worsen, we could reach a point where we would have to tap our Treasury line, but today is not that day.”
But despite the reassurances, federal officials have been consistently wrong in their “optimistic” projections. And many analysts expect that they are wrong again. "It all works out nicely if the prepayment actually covers what the FDIC needs for the next three years," Time magazine quoted ISI Group bank analyst Ed Narjarian. "But more than likely, the FDIC is going to be back for more before the three years are out."
Other experts are even more pessimistic, like President of Euro Pacific Capital and U.S. Senate candidate Peter Schiff. “The reality is, this is just the tip of the ice berg,” he said, noting that the only reason the banks have this money for the FDIC right now is because of the government bailouts. “The FDIC is going to require hundreds of billions of dollars of taxpayer money — if not well over a trillion dollars — before it’s all said and done.”
The FDIC ensures deposits up to $250,000 per account for over 8,000 institutions, amounting to almost $5 trillion of taxpayer-guaranteed funds. And unfortunately for American taxpayers, U.S. banks are not in very good shape. A recent World Economic Forum analysis of countries’ bank soundness ranked the United States at 108th in the world, just behind Tanzania.
Schiff predicts more and more bank failures, and that the FDIC will make good on its promises to guarantee the deposits with taxpayer money — at great expense to America as a whole. “They’re going to make sure that nobody loses money, which means they are going to make sure that all of the money loses most of its value, which means everybody loses,” he said.
Besides the loss in federal reserve notes’ purchasing power — which negatively impacts all Americans — Schiff highlights another problem with the existing unconstitutional system of government deposit insurance. It abrogates the free market because it encourages banks to take on more risk to pay more interest on deposits, with depositors having no incentive to seek out more sensible banks since they know taxpayer will simply come to the rescue.
Bankers seem to be content with the FDIC’s proposal, especially if it means they can avoid having to pay higher fees and they don’t even have to acknowledge all of the outgoing money until 2012. More than likely, however, this is just a temporary solution.
Instead of accounting gimmicks and saddling American taxpayers with more risk and obligations, it is past time for true reform. Congress should start discussing and implementing real solutions immediately.
The entire financial world needs to be overhauled — no more secretive central bank funny money, no more “fractional reserve” banking and no more unconstitutional FDIC to transfer risk from banks to taxpayers. Sanity, morality, prosperity, and the Constitution demand nothing less.
Alex Newman is an American freelance writer and the president of Liberty Sentinel Media, Inc., a small media consulting firm. He is currently living in Sweden and has spent most of his life in Latin America, Europe and Africa. He has a degree in foreign languages and speaks Spanish, French, Portuguese, German, Italian and a little Swedish and Afrikaans. In addition, he earned a degree in journalism from the University of Florida, with emphasis on economics and international relations.
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