On Saturday morning, I read that the number of bank failures in 2010 had climbed to 108. For the sake of comparison, “just” 69 had failed at this point last year, and bank failures peaked at 12 in 2002 as a result of our last recession.
As you’re likely aware, FDIC insurance limits were increased from $100k to $250k per depositor per institution back in 2008. This increase was set to expire at the end of 2013, but it was made permanent with the recent passage of the financial reform bill.
The same goes for NCUA insurance coverage, which was likewise scheduled to fall back to the original $100k limit at the end of 2013. For those that are unaware, the NCUA is much like the FDIC, except that it protects credit union deposits.
Looking at the history of FDIC insurance limits, it seems perfectly reasonable to make the change permanent. After all, the limit has been at $100k ever since 1980. Accounting for inflation, that was the equivalent to $261, 934 in 2008 dollars.
From the outside, virtually nothing will change. You’ll just no longer have to worry about the safety of your savings account, CDs, etc. come 2013 if your combined balance at a single bank is somewhere between $100k-$250k.