BANKING; F.D.I.C. Changes Rules For Large Deposits. WHEN Paul Ramsier, a Manhattan psychotherapist, learned that his bank, the American Savings bank, had failed, he resolved to pay more attention to how much of his savings were covered by Federal deposit insurance.
"Seeing those people in line, waiting to get their money, was not a pretty sight," Mr. Ramsier said. "Most of them were elderly and, like me, they had no inkling that their bank and their deposits were in danger. " Anyone with more than $100,000 on deposit would be well advised to follow Mr. Changes in FDIC Deposit Insurance Coverage.
Banks as Payday Lenders. Payday lenders have notoriously marketed themselves as a harmless option for people who need small loans they hope to repay quickly, usually in two weeks.
In truth, the industry earns considerable profits from borrowers who cannot afford to repay the original loan as agreed and must renew the loan again and again for an average fee of about $50 each time. These borrowers end up in debt for months, saddled with loans that can carry an interest rate of 400 percent or more. The banking industry, which cannot resist such easy profits, offers “deposit advance” loans that work the same way. There is no fixed date for repayment, but the bank repays itself from an electronic deposit that comes into the borrower’s account. FDIC: Federal Deposit Insurance Corporation.