The Massachusetts Depositors Insurance Fund is a
deposit insurance
Deposit insurance or deposit protection is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of ...
scheme that protects depositors at Massachusetts savings
bank
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Because ...
s. It was created in 1934
by the
state
State may refer to:
Arts, entertainment, and media Literature
* ''State Magazine'', a monthly magazine published by the U.S. Department of State
* ''The State'' (newspaper), a daily newspaper in Columbia, South Carolina, United States
* ''Our S ...
government of Massachusetts
The Commonwealth of Massachusetts is governed by a set of political tenets laid down in its state constitution. Legislative power is held by the bicameral General Court, which is composed of the Senate and House of Representatives. The governo ...
in response to the large number of Massachusetts bank failures during the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
of the 1930s. This fund was the inspiration for the formation of the
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures cred ...
(FDIC). After the FDIC was created, the state fund was modified to cover all amounts not covered by the FDIC. Typically the FDIC covers the first $250,000;
[https://secure.umassfive.org/news/250000_ncua_share_insurance.html] the Massachusetts fund will cover any amount above that. As a result, account holders in Massachusetts savings banks (and Massachusetts co-operative banks, whose excess deposits are similarly insured by the Share Insurance Fund of The Co-operative Central Bank) generally have all of their deposits insured by the combination of the state fund and the FDIC.
This fund is related to, but not the same as, the national Deposit Insurance Fund (DIF) administered at the U.S. national level by the
FDIC
The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures credi ...
.
External links
Depositors Insurance Fund
References
{{Reflist
Government agencies established in 1934
1934 establishments in Massachusetts
Deposit insurance in the United States