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DIFS Promotes Insured, Secure MI Open Accounts Following Consumer Financial Protection Bureau Advisory
July 10, 2023
FOR IMMEDIATE RELEASE: July 10, 2023
(LANSING, MICH) The Michigan Department of Insurance and Financial Services (DIFS) is reminding consumers about the importance of using federally insured bank and credit union accounts following a consumer advisory from the Consumer Financial Protection Bureau (CFPB) about increased risk when holding money in a nonbank payment app like PayPal, Venmo, and Cash App. All deposits in Michigan’s banks and credit unions are insured up to $250,000 according to federal guidelines.
“Peer-to-peer payment apps can be convenient, but should only be used for transferring funds or making payments, not storing funds. Money stored in these apps is not insured, so your money is safer in a bank or credit union account, where deposits are federally insured for up to $250,000 per accountholder,” said DIFS Director Anita Fox. “If you are currently using these apps but do not have an account at a financial institution, MI Open Accounts are available at 30 banks and credit unions across Michigan and you can find them at Michigan.gov/DIFSOpenAccount.”
The Federal Deposit Insurance Corporation (FDIC) insures accounts at national- and state-chartered banks, and the National Credit Union Administration (NCUA) insures accounts at national- and state-chartered credit unions up to $250,000 in the unlikely event of the financial institution failing. If a nonbank payment company fails, such as PayPal, Venmo, and Cash App, deposit insurance does not apply.
Michiganders who do not currently have an account at a bank or credit union can find federally insured low- and no-cost accounts without unexpected fees through the Michigan Open Account Coalition (MOAC). The MOAC is a partnership between DIFS, the Michigan Bankers Association, the Michigan Credit Union League, and community organizations to encourage relationships between financial institutions and historically underserved communications, to educate consumers about the importance of having a relationship with a financial institution, and to ensure that consumers have access to low- and no-cost accounts.
To learn more about MOAC, visit Michigan.gov/DIFSOpenAccount. For more information or if you have questions or concerns about a financial institution, call DIFS Monday through Friday 8 a.m. to 5 p.m. at 877-999-6442 or visit Michigan.gov/DIFScomplaints to file a complaint.
The mission of the Michigan Department of Insurance and Financial Services is to ensure access to safe and secure insurance and financial services fundamental for the opportunity, security, and success of Michigan residents, while fostering economic growth and sustainability in both industries. In addition, the Department provides consumer protection, outreach, and financial literacy and education services to Michigan residents. For more information, visit Michigan.gov/DIFS or follow the Department on Facebook, Twitter, or LinkedIn.