Be Wary of Prepaid Card Protection

Publication: USA TODAY

Author: Sheila Bair

04/08/2013 - Sheila Bair, the former chairwoman of the FDIC and a senior adviser at The Pew Charitable Trusts, wrote an op-ed in the April 7 edition of USA TODAY.

"Banks sometimes fail. This is an unfortunate fact of life. During the Great Depression, closing a bank often led to panic, with depositors desperately trying to withdraw their funds. Anyone who has seen the movie, It's a Wonderful Life, knows what a bank filled with panicked customers looks like.

"Bank runs do not happen anymore—at least not in the United States. That is because of insurance provided by the Federal Deposit Insurance Corporation (FDIC). When a bank fails today, its insured depositors never lose a dime. By design, the failing bank is usually taken over by another bank. The transition is swift, precise and creates few ripples for consumers, because it is handled by highly trained professionals at the FDIC. Families can keep paying bills and businesses can make payroll. In fact, nearly 500 banks failed during the financial crisis and its aftermath, and every single depositor had access to their insured money within one business day."

Read the full op-ed on USA TODAY's website.

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