Quote:
Originally Posted by AW335TT
So why would a state have issues paying the lump some if the money is already there?
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Google Illinois Lottery payment issues.
Also - to your FDIC comment....
If a bank fails - the customer would lose their cash on deposit beyond the $250,000 level
IF the FDIC could not find another bank to acquire and assume the deposits.
This rarely happens now - however in the early years of the FDIC, this was common.
For example - When Wachovia (former FUNB) was about 6 hours from being the largest bank failure in US history, Wells Fargo acquired and assumed 100% of the deposits for all former Wachovia customers.
If Wachovia had been assumed under the FDIC without a buyer for the assets, the FDIC would pay up to the insurance limit and then all depositors above the limit are SOL....
EDIT: Little nugget of knowledge for the group...If every bank failed in the US at the same time - the FDIC insurance fund has only .15 to .25 on the dollar to cover the $250,000 requirement...so the $250,000 'insurance' for every customer is not really guaranteed...