This Christmas, you and your family may have plans to watch the 1946 holiday classic It’s a Wonderful Life. Ali Velshi describes the famous “bank run” scene, where George loans his own money to his panicked neighbors who are desperately trying to get money out of bank accounts the bank can’t completely cover. Most Americans can’t relate to this scene today, thanks to changes made during The Great Depression in response to thousands of bank failures that wiped out people’s hard-earned savings forever.
The FDIC exists to protect your money in the event of a bank failure. After the FDIC started insuring banks in 1934, only nine failed that year versus the 9,000 bank failures in the previous four years. Today, the FDIC insures trillions of dollars in deposits at almost every bank and savings association in the United States. It ensures that no American banking consumer loses money in an FDIC-insured account, even when a bank does collapse. It also keeps an eye on financial institutions to make sure everything is operating soundly, and consumers remain protected.
The incoming Trump administration and its newly-created “Department of Government Efficiency” have been considering how to reduce banking regulations, including eliminating the FDIC. This would put Americans in exactly the same position they were in during the Great Depression: at grave risk of losing everything in accounts at unregulated banks. This is not smart economics.
LISTEN: VELSHI ON HOW THE FDIC WORKS
WATCH: VELSHI REMINDS US WHY THE SCENE FROM IT’S A WONDERFUL LIFE CAN’T HAPPEN TODAY
