Congress prevented FDIC from collecting premiums from 1996-2006

This is just unbelieveable. The Boston Globe reports:

The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts.

[FDIC Chair] Bair said yesterday that the agency's failure to collect premiums from most banks "was surprising to me and of concern." As a Treasury Department official in 2001, she said, she testified on Capitol Hill about the need to impose the fees, but nothing happened. Congress did not grant the authority for the fees until 2006, just weeks before Bair took over the FDIC. She then used that authority to impose the fees over the objections of some within the banking industry.

....

House Financial Services Committee chairman Barney Frank agreed that officials believed at the time that the good times would last and that bank failures would not be a problem.
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Congress mandates that the insurance fund must stay between 1.15 percent and 1.5 percent of all insured deposits. The reserve ratio on Dec. 31 was 0.40 percent, down from 1.22 percent at the end of 2007.

Why is it that every time there is a giveaway to the Banking industry, "progressive" Barney Frank's fingerprints are all over it?

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That is just unf@^&(@king believable!

I uprated it to be on the front page. Yes it's short but doesn't that say everything?

Steal from the middle class and give it to the super rich. What else is there to say?

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Corporate Welfare

Corporate Welfare, plain and simple.

Notice that this started in 1996 - when Democrat Bill Clinton was president.

The Democrats got the ball rolling towards the our economic demise with NAFTA, China PNTR, removal of Glass-Steagall, failure to regulate Fannie Mae and Freddie Mac, this FDIC handout to poor bankers, ...

George Bush and the Republicans gladly kept the ball rolling with CAFTA, Bankruptcy "reform" bill, gutting of the SEC, ...

There is little difference between Democrat and Republican. They are both owned by corporate interests. Mussolini defined fascism and the merging of government and corporate powers. Isn't that what's happened in the USA?

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Wow, another institution fails to protect the

people. The financial industry lobbyists were all over this too.

Why are lobbyists good for democracy? Oh yeah, money is free speech. What bullshit!

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