Pennsylvania, Michigan Banks Shut as 2010 Failures Climb to 151

[Newsjock]

Source: Bloomberg News

Regulators shuttered banks in Pennsylvania and Michigan holding $365 million in assets as real-estate losses drive the toll of U.S. closures to 151.

Earthstar Bank of Southampton, Pennsylvania, and Farmington Hills, Michigan-based Paramount Bank were closed, the Federal Deposit Insurance Corp. said today in statements on its website. Polonia Bancorp purchased Earthstar, while Level One Bank purchased Paramount. The two closures cost the FDIC’s deposit- insurance fund $113.1 million.

... The FDIC said last month that its list of “problem” banks -- those at heightened risk of failure -- rose 3.7 percent to 860 in the third quarter, the most in 17 years. Banks on the confidential list had $379.2 billion in assets as of Sept. 30, the FDIC said.

Read more: http://www.bloomberg.com/news/2010-12-11/pennsylvania-michigan-banks-shut-as-2010-failures-climb-to-151.html

[napi21]

1. Where does the FDIC get it's money? After seeing that $113M number,

it dawned on me tat the total cost of all 151 banks has to be astronomical! If they are funded through the US Treasury (which I suspect they are) did congress actually approve all that money?

[2QT2BSTR8]

2. It is an insurance program, and it collects premiums from the banks.

The Federal government ultimately underwrites any losses, which in the end means the tax-payers. Not sure about the Congress question.