However, when Freedom National Bank of Harlem failed in 1990, the FDIC chose the unusual method of paying off insured depositors only up to the $100,000 maximum. In fact, the FDIC made the even more unusual decision to combine all accounts of a given depositor into one account and then applying the cap, which left many more depositors exposed to losses. Many depositors had purposefully opened several accounts in order to gain the protection of the FDIC, but the FDIC refused to insure those accounts, even though that had been their typical practice. This decision by the FDIC meant that the many
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