WASHINGTON, D.C.— Phillip Basil, Director of Economic Growth and Financial Stability for Better Markets, issued the following statement in response to the FDIC finalizing a rule implementing industry-friendly requirements for notices regarding FDIC insurance:

“For almost 100 years, FDIC deposit insurance has been the gold standard for trust, confidence, and protection. However, the Trump administration is undermining that trust, endangering depositor confidence, and threatening bank runs and financial instability.

“The FDIC just finalized a rule that will allow banks to potentially mislead hard-working savers about what products and services banks now offer FDIC insurance. That will leave all Americans vulnerable to fraud and losses on products that they thought were covered by insurance when in fact they are not, which will erode trust and confidence in the banking system – the trust and confidence that prevents bank runs.

“This risk is especially high now that the banking agencies are all-in on greenlighting banks to offer crypto products, which facilitate huge amounts of fraud and have caused tremendous losses. Just as with crypto companies like Voyager Digital and FTX, which misled their customers about deposit insurance and resulted in millions in customer losses, banks that offer crypto products will now have the flexibility to bury their disclaimers around deposit insurance and likely leave customers with a false sense of security, as Better Markets has detailed in the past.

“If the banking agencies are going to allow – and in fact incentivize – banks to engage in a host of nonbank products including crypto that are not covered by FDIC insurance, the FDIC at the very least must insist that there be complete clarity between what is and is not covered by FDIC insurance. The focus has to be on keeping the trust and confidence that has supported the stability of the banking system since the FDIC’s founding and its core mission of protecting the savings of hard-working Americans.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.