A moment's reflection suggests that the British government could not really guarantee £1.3 trillion of consumer deposits either.
Bank of America, for instance, has been improving its share of consumer deposits, "largely due to taking a page out of the small-bank book," he said.
As for the safety of consumer deposits (6, above), there are several misconceptions the public seems to be embracing.
Originally adopted in 1977, Congress designed the CRA to combat two practices thought to undermine the financial health of low- and moderate-income communities: redlining, the practice of refusing to bring services to certain communities; and capital exportation, the failure to use consumer deposits from a community to provide access to credit to customers in that same community.
The final price will be based on the value of the consumer deposits when the deal closes by the end of the year.
Banks today are involved in many lines of business: from taking consumer deposits and lending to investment banking and trading.
Commercial banks perform some of the most critical functions in the economy, accepting consumer deposits and extending loans that keep society moving.
So, consumer deposits are equally safe in either type (global or community bank) of FDIC-insured bank (currently up to $250,000 per depositor).
Mr. Hallock said that his company, like other community banks, cannot rely on long-term consumer deposits to finance products like a 30-year mortgage, "because consumers today don't want to take out longer-term certificates of deposit".
Consumer deposits are now insured up to $250,000 per account, and the F.D.I.C. offers unlimited coverage on noninterest payroll accounts used by businesses.
