So, legally speaking what authority does the Treasury Department have to make depositors whole beyond the legally guaranteed $250,000 insured and an equal share up to the amount of their deposits of the auctioned and liquidated assets?
The question I have is do some of the proceeds of the liquidation get used for $250,000 insurance payout first? Or do the tax payers get to help?
> The question I have is do some of the proceeds of the liquidation get used for $250,000 insurance payout first?
Yup. FDIC gets the bank, and has to pay the insured amount. Then, the remainder must be managed for the benefit of depositors, other creditors, and shareholders. Any shortfall of the insured amount can be paid from the deposit insurance fund.
> Or do the tax payers get to help?
The FDIC deposit insurance fund is paid for by banks.
The question I have is do some of the proceeds of the liquidation get used for $250,000 insurance payout first? Or do the tax payers get to help?