In 2010, the Federal Deposit Insurance Corporation (FDIC) raised its deposit insurance maximum to $250,000 following the Dodd-Frank Act, which Congress passed in reaction to the 2008 financial crisis. To put it another way, you are certain of getting up to $250,000 of your deposits returned if you deposit money into an FDIC-protected account and the bank fails. The FDIC did, however, safeguard deposits over this threshold in one recent instance, the demise of Silicon Valley Bank.
This is the reason why JPMorgan Chase, Bank of America, and Wells Fargo won’t get full insurance or guarantees
Since 2010, the total insured deposits in FDIC-protected accounts have increased steadily, and as of the last quarter of 2024, they totaled $7.61 trillion. The percentage of uninsured deposits increased from 20 percent of total deposits in 2010 to 44.7 percent in 2022. Being the biggest banks in the nation, JP Morgan Chase, Bank of America, and Wells Fargo account holders hold a significant portion of the uninsured holdings. Although this amount could not be confirmed, several web sources have claimed that these three financial behemoths own $2.6 trillion.
Some account holders, especially workers and retirees who have their retirement and savings money in these accounts, can suffer large losses in the event of a big bank failure. Uninsured deposits grew significantly faster than insured deposits in the fourth quarter of 2024, according to a report released earlier this year by the FDIC:
- Insured deposits rose by $39.1 billion (0.4 percent).
- Uninsured deposits rose by $218.5 billion (3.0%).
The FDIC observed that over two-thirds of banks (60.1%) reported a rise in uninsured deposits, indicating that this trend was widespread. Uninsured deposits increased by 5.4% (+$393.3 billion) in the fourth quarter of 2023, compared to a mere 0.5% (+$56.7 billion) increase in insured deposits. Any sum over the $250,000 FDIC insurance limit is not assured to be reimbursed in the case of a bank failure; it is merely a cutoff.
The increasing percentage of uninsured deposits indicates that more money is being kept in accounts that are over this cap, thus putting a greater number of depositors at risk. Even though insured deposits are still worth more than they were before Dodd-Frank went into force, they have decreased from their peak in the second quarter of 2022, when $8.76 trillion in deposits were covered by the FDIC.
An insurance company is being accused of spying on lawmakers and journalists
Following claims that one of the state’s Medicaid insurance companies unlawfully spied on Texans, Texas Attorney General Ken Paxton said Thursday that he has opened an investigation into the matter. The state is looking into allegations that Superior HealthPlan, an insurance provider for the Children’s Health Insurance Program in Texas, as well as Medicaid coverage for adults and children, used private investigators to conduct surveillance and obtain potentially private information about Texans, including journalists and lawmakers. Moreover, Paxton stated recently that the accusations against Superior are extremely serious. These accusations include behaviors that were described as possibly extorting lawmakers to obtain state contracts and monitoring private residents to avoid paying valid claims. Members of the Texas House Committee on the Delivery of Government Efficiency questioned Mark Sanders, the CEO of Superior HealthPlan, on Wednesday about the employment of private investigators by his organization.
Sanders told committee members that the company had previously hired private investigators but had stopped doing so in recent years as lawmakers questioned company officials about possible fraud and misuse of government funds related to its Medicaid contracts. Finally, it is important to note that the investigation into Superior HealthPlan in Texas raises concerns about privacy violations and potential corruption within the Medicaid system. If proven, this could lead to legal and regulatory consequences for the company and prompt reforms in Medicaid and state contract oversight. The situation underscores the importance of transparency and accountability in healthcare administration, particularly when dealing with sensitive personal information and taxpayer-funded programs.
