[Boomer]

Today was the first time I have run into Blue Sky when buying brokered CDs.

I looked up what they are but I am still not clear.

The bank was Third Federal and I wanted a 3 month.

Call protected? Check
FDIC? Check

But when I submitted “Buy” Blue Sky popped up for Ohio, TX and FL.

I tend to buy the brokered CDs from banks I have actually seen as bricks and mortar and I have seen Third Federal.

But what happened that I cannot buy a CD from them?

I bought the CD from a different bank after the Blue Sky blocking appeared but I want to know specifically why that happened.

Third Federal has been around for a while and I have never heard of any issues with them.

Boomer

[Jayhawk]

Originally Posted by Boomer

Today was the first time I have run into Blue Sky when buying brokered CDs.

I looked up what they are but I am still not clear.

The bank was Third Federal and I wanted a 3 month.

Call protected? Check
FDIC? Check

But when I submitted “Buy” Blue Sky popped up for Ohio, TX and FL.

I tend to buy the brokered CDs from banks I have actually seen as bricks and mortar and I have seen Third Federal.

But what happened that I cannot buy a CD from them?

I bought the CD from a different bank after the Blue Sky blocking appeared but I want to know specifically why that happened.

Third Federal has been around for a while and I have never heard of any issues with them.

Boomer

Not all CDs are available in every state. Each state has its own set of laws to offer securities for sale in its state, and those laws are referred to as Blue Sky laws. As a result, a state restriction is known as a Blue Sky restriction and will vary by the issuing bank and offering.

As long as your full amount is FDIC insured, bricks and mortar or digital are no different.

[Altavia]

Learn something every day!

[Boomer]

Thanks but why would a state slap a blue sky on a particular bank?

I have been buying short term brokered CDs since the rates have been going up, but this is the first time I have run into the Blue Sky law.

Boomer

[Carla B]

Yes, I've run into that on Fidelity's site. In a discussion on TOTV several months ago, it was suggested that a good idea might be to buy CD's issued by very large banks. So Truist seemed to quality, listed as 7th largest in U.S. in asset size. But they are restricted in FL by Blue Sky Laws.

[Ecuadog]

Originally Posted by Boomer

Thanks but why would a state slap a blue sky on a particular bank?
...

It might be as simple as the bank choosing not to register and explain its offering to that state, for whatever reason. It doesn't mean the bank was slapped.

[Boomer]

Originally Posted by Ecuadog

It might be as simple as the bank choosing not to register and explain its offering to that state, for whatever reason. It doesn't mean the bank was slapped.

But, but, Ecuadog, I do so love a good verb. Although you’re right with what you said about the choice of the bank not “to register and explain” probably being the reason for the Blue Sky showing up, I wondered why.

I did not know what Blue Sky meant, so I had to find out. There was a lot of info on the Investopedia site, and my reading of it was cursory because I could not buy the CD from that bank anyway. It is a long article, but well organized with good sub-headings.

I usually start with Investopedia as my first go-to when I want a simple explanation of a financial term. The opening paragraph of the article says that Blue Sky laws started for consumer protection.

I was also curious about why the laws were called “Blue Sky.” Investopedia said that the name goes back to the early 1900s when a Kansas Supreme Court justice wanted to protect investors from speculative ventures — about which he is quoted as having said, “had no more basis than so many feet of ‘blue sky.’”

The bricks and mortars of the bank are throughout Ohio and there are some in Florida, too, so obviously they do business inside those states and have been for a while.

If the bank chose not to “register and explain” the details of their investment of the money “loaned” to them by CD buyers — why?

I am not saying there was anything wrong. . .could have been a number of things, like maybe the bank wanted only institutional investors for that particular CD. . . Or maybe the fact that the term was only for 3 months and a quick turnaround of profit was tentatively in the making, so the risk might be more of an issue. (The CD was covered by the FDIC, of course. I would not buy without that.. .but. . .still. . .what was it?)

Whatever it was, it surprised me when I was all set to buy their 3 month CD, but OH, TX, and FL showed up to say “Blue Sky.”

In 2018 there was a rollback of some of the banking regulations that had been put in place in July of 2010 when the fiasco that brought the collapse of the housing market and the hit on the stock market were still fresh in the minds of Americans.

Anyway, even though I am buying brokered CDs right now, I can’t say that I don’t worry about banks — not staying awake at night — but not an amnesiac either.

Oh well, enough over-thinking and typing exercise me this morning. I must get on with my real life.

(If you lasted this long reading my wondering, hey, thanks. If you would like to know more about Blue Sky laws, the Investopedia site will tell you far more than you probably ever wanted to know.)

Boomer

[dewilson58]

Originally Posted by ecuadog

it might be as simple as the bank choosing not to register and explain its offering to that state, for whatever reason. It doesn't mean the bank was slapped.

bingo.

[Boomer]

Originally Posted by dewilson58

bingo.

Aw, c’mon, wilson, I see you’re back in your old picking on posters mode lately. This morning, you seem to be after me. How dare a woman ask questions about a banking practice and want to know more, huh?

But, I will cut you a tiny bit of slack because the fact does remain that Ecuadog was right in his answer that it was likely the bank’s choice — that I get — but why that choice? (I doubt that you read my response, continuing the conversation, and I don’t care if you care or not, but it did explain a few things.)

That particular one-word snark looked innocent. It was subtle yet dismissive enough of my thinking while trying to stay under the radar. But why bother to try to snark up a thread? Btw, that’s a rhetorical question because……..

we both have been around this place for years, so we know how it goes sometimes with oil and water. Just wanted to dish it right back atcha……

That’s all. (I wish there were an emoji for a knowing smile.)

Boomer

[dewilson58]

Originally Posted by Boomer

Aw, c’mon, wilson, I see you’re back in your old picking on posters mode lately.

Not picking on anyone................I agreed with the Dog because he is right.

Nothing snarky about "Bingo".............I'm agreeing with him.

Wow.

[Boomer]

Originally Posted by dewilson58

Not picking on anyone................I agreed with the Dog because he is right.

Nothing snarky about "Bingo".............I'm agreeing with him.

Wow.

I know that. And I agreed with him, but then continued the conversation — which was probably too long to be considered by some — and that’s OK, too. I know I operate on a different wave length sometimes.

Therefore, I owe you a sliver of an apology, while saying you did not have the whole picture…..

.The “bingo” came off as one and done. I was not done. You missed that part, I guess……

This is not a homework assignment because it was your choice not to read my post with the explanation of my questioning. So I found your bingo a bit snit-worthy on my part.

I am sure I am not the only one who knew nothing about Blue Sky laws. I was just willing to admit it and started the conversation.

Oh my, I have now caused this thread to become more convoluted than even the Blue Sky laws. But it’s all theater here anyway.

Even though you have a history, a pattern sometimes, I know I do, too. Hello my name is Boomer and sometimes I wordsmith. I see now that it was just that my long post was probably skipped and that “bingo” was just a quick reaction to the initial part of the answer. Just a classic example of the usual way it goes around here when reading only parts of threads.

So? Truce.

Have a good day.

Boomer

PS: it is good to know about Blue Sky though, although knowing did contribute to my somewhat jaded look at bank practices and deregulation.

[Boomer]

Addendum: I need to add a Part II to my above semi-apology to dewilson.

Although sometimes he can snark a little, I now see that I was too sensitive to his “Bingo” and I must explain that although he can snark a little sometimes, that was not it….

I just happen to be a little sensitive because I am an “ old lady boomer” who has heard some dismissing or shock from some men because I know a little bit about money stuff, so I reacted from that standpoint and should not have.

We women of a certain age sometimes hear certain assumptions from some men. Wilson was not guilty as charged, so I am hereby reversing my conviction of him. He was not being one of those types.

I have freaked out a couple of wet-behind-the- ears “advisors” in my day and sadly, a few women, too — but that part is a story for another day.

Anyway, this is my mea culpa. Wilson did not deserve my response on this one.

Boomer

PS: Mr. Boomer likes that I like this money stuff.

[dewilson58]

Originally Posted by Boomer

Addendum: I need to add a Part II to my above semi-apology to dewilson.

Although sometimes he can snark a little,

HEY, I resemble that comment.

[Boomer]

Originally Posted by dewilson58

HEY, I resemble that comment.

I know.

And thanks for playing.

Boomer