On July 16, 2007, the House passed the FDIC Enforcement Enhancement Act, H.R. 2547, which will impose penalties on companies that falsely claim to be Federal Deposit Insurance Corporation (FDIC) insured. The bill protects the reputation of the FDIC as well as the millions of consumers that trust the financial regulatory institutions.
Recently, the FDIC has become aware of various schemes that defraud consumers by misrepresenting the insurance corporation. Often these scams target older Americans. Criminals use the FDIC's name, logo, or abbreviation to suggest that the products they sell are insured by the FDIC. The FDIC is currently powerless against perpetrators that operate outside the deposit insurance system. This legislation will strengthen the FDIC's enforcement powers by allowing it to enter cease and desist orders against scammers and impose fines of up to $1,000,000 per day on any person who falsely represents the insurance corporation. The FDIC Enforcement Enhancement Act would also allow the FDIC to file an injunction against the people or companies misrepresenting it under the rules of any federal, state, foreign court or competent jurisdiction.
This legislation protects seniors, savers, and investors--ensuring their hard-earned money is safe and secure. It is necessary to preserve the FDIC's trusted name, maintaining its guarantee as a marker of public confidence.