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The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply
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 a ...
to depositors in American depository institutions, the other being the
National Credit Union Administration The National Credit Union Administration (NCUA) is a government-backed insurer of credit unions in the United States, one of two agencies that provide deposit insurance to depositors in U.S. depository institutions, the other being the Federa ...
, which regulates and insures
credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including deposit accounts, provision ...
s. The FDIC is a United States government corporation supplying deposit insurance to depositors in American commercial banks and
savings bank A savings bank is a financial institution whose primary purpose is accepting savings deposits and paying interest on those deposits. They originated in Europe during the 18th century with the aim of providing access to savings products to all ...
s. The FDIC was created by the
Banking Act of 1933 The Banking Act of 1933 () was a statute enacted by the United States Congress that established the Federal Deposit Insurance Corporation (FDIC) and imposed various other banking reforms. The entire law is often referred to as the Glass–Stea ...
, enacted 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 ...
to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this was increased several times over the years. Since the enactment of the
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Recess ...
in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States of America, and since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds. The FDIC and its reserves are not funded by public funds; member banks' insurance dues are the FDIC's primary source of funding. The FDIC also has a US$100 billion line of credit with the
United States Department of the Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing an ...
. , the FDIC provided deposit insurance at 5,256 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages receiverships of failed banks.


Ownership categories

Each ownership category of a depositor's money is insured separately up to the insurance limit, and separately at each bank. Thus a depositor with $250,000 in each of three ownership categories at each of two banks would have six different insurance limits of $250,000, for total insurance coverage of 6 × $250,000 = $1,500,000. The distinct ownership categories are * Single accounts (accounts not falling into any other category) * Certain retirement accounts (including
Individual Retirement Account An individual retirement account (IRA) in the United States is a form of pension provided by many financial institutions that provides tax advantages for retirement savings. It is a trust that holds investment assets purchased with a taxpayer's e ...
s (IRAs)) * Joint accounts (accounts with more than one owner with equal rights to withdraw) * Revocable trust accounts (containing the words "Payable on death", "In trust for", etc.) * Irrevocable trust accounts * Employee Benefit Plan accounts (deposits of a pension plan) * Corporation/Partnership/Unincorporated Association accounts * Government accounts All amounts that a particular depositor has in accounts in any particular ownership category at a particular bank are added together and are insured up to $250,000. For joint accounts, each co-owner is assumed (unless the account specifically states otherwise) to own the same fraction of the account as does each other co-owner (even though each co-owner may be eligible to withdraw all funds from the account). Thus if three people jointly own a $750,000 account, the entire account balance is insured because each depositor's $250,000 share of the account is insured. The owner of a revocable trust account is generally insured up to $250,000 for each unique beneficiary (subject to special rules if there are more than five of them). Thus if there is a single owner of an account that is specified as in trust for (payable on death to, etc.) three different beneficiaries, the funds in the account are insured up to $750,000. On January 21, 2022, the Board of Directors passed a Final Rule to simplify the Ownership Categories by combining Revocable and Irrevocable Trusts into a single ownership category. The policy came into effect on April 4, 2022.


Former Chairpersons


Board of directors

The Board of Directors of the FDIC is the governing body of the FDIC. The board is composed of five members, three appointed by the
president of the United States The president of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United Stat ...
with the consent of the
United States Senate The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and pow ...
and two
ex officio An ''ex officio'' member is a member of a body (notably a board, committee, council) who is part of it by virtue of holding another office. The term '' ex officio'' is Latin, meaning literally 'from the office', and the sense intended is 'by right ...
members. The three appointed members each serve six-year terms. No more than three members of the board may be of the same political affiliation. The president, with the consent of the Senate, also designates one of the appointed members as chairman of the board, to serve a five-year term, and one of the appointed members as vice chairman of the board. The two ex officio members are the Comptroller of the Currency and the director of the Consumer Financial Protection Bureau (CFPB). As of December 2022, the members of the Board of Directors of the Federal Deposit Insurance Corporation were: * Martin J. Gruenberg – Chairman of the Board * Travis Hill – Vice Chairman * Jonathan McKernan – Board Member * Michael J. Hsu – Acting Comptroller of the Currency *
Rohit Chopra Rohit ( Devanagri: रोहित), ) is a given name, typically male, used among Indian people. It is also used in some parts of Nepal. It is mostly used by Jains, Hindus, and Sikhs. The word "rohit" signifies the color red. It is derived f ...
– Director,
Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mortg ...


History


Panics of 1893 and 1907 and the Great Depression: 1893–1933

During the Panics of 1893 and 1907, many banks filed bankruptcy due to bank runs caused by contagion. Both of the panics renewed discussion on deposit insurance. In 1893,
William Jennings Bryan William Jennings Bryan (March 19, 1860 – July 26, 1925) was an American lawyer, orator and politician. Beginning in 1896, he emerged as a dominant force in the History of the Democratic Party (United States), Democratic Party, running ...
presented a bill to Congress proposing a national deposit insurance fund. No action was taken, as the legislature paid more attention to the agricultural depression at the time. After 1907, eight states established deposit insurance funds. Due to the lax regulation of banks and the widespread inability of banks to branch, small, local unit banks—often with poor financial health—grew in numbers, especially in the western and southern states. In 1921, there were about 31,000 banks in the US. The
Federal Reserve Act The Federal Reserve Act was passed by the 63rd United States Congress and signed into law by President Woodrow Wilson on December 23, 1913. The law created the Federal Reserve System, the central banking system of the United States. The Panic ...
initially included a provision for nationwide deposit insurance, but it was removed from the bill by the House of Representatives. From 1893 to the FDIC's creation in 1933, 150 bills were submitted in Congress proposing deposit insurance. During the Great Depression there was widespread panic again over the American banking system due to fears over the strength of many banks; more than one-third of all U.S. banks were closed by bank runs. Bank runs, sudden demands by large numbers of customers to withdraw all their funds at almost the same time, brought down many bank companies as depositors attempted to withdraw more money than the bank had available as cash. Small banks in rural areas were especially affected. Written and publicly announced reassurances and tightened regulations by the government failed to assuage depositors' fears.


Establishment of the FDIC: 1933

President
Franklin D. Roosevelt Franklin Delano Roosevelt (; ; January 30, 1882April 12, 1945), often referred to by his initials FDR, was an American politician and attorney who served as the 32nd president of the United States from 1933 until his death in 1945. As the ...
himself was dubious about insuring bank deposits, saying, "We do not wish to make the United States Government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future." But public support was overwhelmingly in favor, and the number of bank failures dropped to near zero. On June 16, 1933, Roosevelt signed the 1933 Banking Act into law, creating the FDIC. The initial plan set by Congress in 1934 was to insure deposits up to $2,500 ($ today) adopting of a more generous, long-term plan after six months. However, the latter plan was abandoned for an increase of the insurance limit to $5,000 ($ today). The 1933 Banking Act: * Established the FDIC as a temporary government corporation. * Gave the FDIC authority to provide deposit insurance to banks * Gave the FDIC the authority to regulate and supervise state non-member banks * Funded the FDIC with loans in the form of
stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
contributions from the Treasury and the
Federal Reserve Bank A Federal Reserve Bank is a regional bank of the Federal Reserve System, the central banking system of the United States. There are twelve in total, one for each of the twelve Federal Reserve Districts that were created by the Federal Reserve A ...
s * Extended federal oversight to all commercial banks for the first time * Separated commercial and investment banking ( Glass–Steagall Act) * Prohibited banks from paying interest on checking accounts * Allowed national banks to branch statewide, if allowed by state law. The Banking Act of 1935 made the FDIC a permanent agency of the government and provided permanent deposit insurance maintained at the $5,000 level.


Historical insurance limits

The per-depositor insurance limit has increased over time to accommodate
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
. * 1934 – $2,500 * 1935 – $5,000 * 1950 – $10,000 * 1966 – $15,000 * 1969 – $20,000 * 1974 – $40,000 * 1980 – $100,000 * 2008 – $250,000 Congress approved a temporary increase in the deposit insurance limit from $100,000 to $250,000, which was effective from October 3, 2008, through December 31, 2010. On May 20, 2009, the temporary increase was extended through December 31, 2013. The
Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Recess ...
(P.L.111-203), which was signed into law on July 21, 2010, made the $250,000 insurance limit permanent. In addition, the Federal Deposit Insurance Reform Act of 2005 (P.L.109-171) allows for the boards of the FDIC and the National Credit Union Administration (NCUA) to consider inflation and other factors every five years beginning in 2010 and, if warranted, to adjust the amounts under a specified formula. FDIC-insured institutions are permitted to display a sign stating the terms of its insurance — that is, the per-depositor limit and the guarantee of the United States government. The FDIC describes this sign as a symbol of confidence for depositors. As part of a 1987 legislative enactment, Congress passed a measure stating "it is the sense of the Congress that it should reaffirm that deposits up to the statutorily prescribed amount in federally insured depository institutions are backed by the full faith and credit of the United States."


S&L and bank crisis of the 1980s

Federal deposit insurance received its first large-scale test since the Great Depression in the late 1980s and early 1990s during the savings and loan crisis (which also affected commercial banks and savings banks). The Federal Savings and Loan Insurance Corporation (FSLIC) had been created to insure deposits held by savings and loan institutions ("S&Ls", or "thrifts"). Because of a confluence of events, much of the S&L industry was insolvent, and many large banks were in trouble as well. FSLIC's reserves were insufficient to pay off the depositors of all of the failing thrifts, and fell into insolvency. FSLIC was abolished in August 1989 and replaced by the Resolution Trust Corporation (RTC). On December 31, 1995, the RTC was merged into the FDIC, and the FDIC became responsible for resolving failed thrifts. Supervision of thrifts became the responsibility of a new agency, the Office of Thrift Supervision (
credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including deposit accounts, provision ...
s remained insured by the
National Credit Union Administration The National Credit Union Administration (NCUA) is a government-backed insurer of credit unions in the United States, one of two agencies that provide deposit insurance to depositors in U.S. depository institutions, the other being the Federa ...
). The primary legislative responses to the crisis were the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), and the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). Federally chartered thrifts are now regulated by the
Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all nation ...
(OCC), and state-chartered thrifts by the FDIC. Final combined total for all direct and indirect losses of FSLIC and RTC resolutions was an estimated $152.9 billion. Of this total amount, U.S. taxpayer losses amounted to approximately $123.8 billion (81% of the total costs.) No taxpayer money was used to resolve FDIC-insured institutions.


2008–2010 financial crisis


2008

In 2008, twenty-five U.S. banks became
insolvent In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet ins ...
and were closed by their respective chartering authorities. The largest bank failure in terms of dollar value occurred on September 26, 2008, when Washington Mutual, with $307 billion in assets, experienced a 10-day
bank run A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...
on its deposits. Washington Mutual's collapse prompted a run on
Wachovia Wachovia was a diversified financial services company based in Charlotte, North Carolina. Before its acquisition by Wells Fargo and Company in 2008, Wachovia was the fourth-largest bank holding company in the United States, based on total ass ...
, another large and troubled bank, as depositors drew their accounts below the $100,000 insurance limit. To avoid a panic and a drain on its insurance fund, the FDIC used exceptional authority to arrange a noncompetitive acquisition of Wachovia. It then established the Temporary Liquidity Guarantee Program (TLGP), which guaranteed deposits and unsecured debt instruments used for day-to-day payments. Congress temporarily raised the insurance limit to $250,000 to promote depositor confidence.


2009

On August 21, 2009, Guaranty Bank, in Texas, became insolvent and was taken over by BBVA Compass, the U.S. division of
Banco Bilbao Vizcaya Argentaria Banco Bilbao Vizcaya Argentaria, S.A. (), better known by its initialism BBVA, is a Spanish multinational financial services company based in Madrid and Bilbao, Spain. It is one of the largest financial institutions in the world, and is present ...
, the second-largest bank in
Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = '' Plus ultra'' ( Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , ...
. This was the first foreign company to buy a failed bank during the financial crisis. In addition, the FDIC agreed to share losses with BBVA on about $11 billion of Guaranty Bank's loans and other assets. This transaction alone cost the FDIC Deposit Insurance Fund $3 billion. At the end of the year, a total of 140 banks had become
insolvent In accounting, insolvency is the state of being unable to pay the debts, by a person or company (debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet ins ...
. Although most of the failures were resolved through merger or acquisition, the FDIC's insurance fund was exhausted by late 2009. To continue meeting its obligations, it demanded three years of advance premiums from its members and operated the fund with a negative net balance.


2010 and beyond

In 2010, a new division within the FDIC, the Office of Complex Financial Institutions, was created to focus on the expanded responsibilities of the FDIC by the Dodd-Frank Act for the assessment of risk in the largest, systemically important financial institutions, or SIFIs. A total of 157 banks with approximately $92 billion in total assets failed during the year. The Deposit Insurance Fund returned to a positive net balance near the start of 2011. The Dodd-Frank Act required the FDIC to increase it to 1.35% of total insured deposits, a goal that was reached in 2018. That year also saw no bank failures for the first time since the crisis.


Funds

Between 1989 and 2006, there were two separate FDIC funds – the Bank Insurance Fund (BIF), and the Savings Association Insurance Fund (SAIF). The latter was established after the savings and loans crisis of the 1980s. The existence of two separate funds for the same purpose led to banks' attempting to shift from one fund to another, depending on the benefits each could provide. In the 1990s, SAIF premiums were, at one point, five times higher than BIF premiums; several banks attempted to qualify for the BIF, with some merging with institutions qualified for the BIF to avoid the higher premiums of the SAIF. This drove up the BIF premiums as well, resulting in a situation where both funds were charging higher premiums than necessary. Then Chairman of the
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
Alan Greenspan Alan Greenspan (born March 6, 1926) is an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He works as a private adviser and provides consulting for firms through his company, Greenspan Associates LLC. ...
was a critic of the system, saying, "We are, in effect, attempting to use government to enforce two different prices for the same itemnamely, government-mandated deposit insurance. Such price differences only create efforts by market participants to
arbitrage In economics and finance, arbitrage (, ) is the practice of taking advantage of a difference in prices in two or more markets; striking a combination of matching deals to capitalise on the difference, the profit being the difference between th ...
the difference." Greenspan proposed "to end this game and merge SAIF and BIF". In February 2006, President George W. Bush signed into law the Federal Deposit Insurance Reform Act of 2005 (FDIRA). The FDIRA contains technical and conforming changes to implement deposit insurance reform, as well as a number of study and survey requirements. Among the highlights of this law was merging the Bank Insurance Fund and Savings Association Insurance Fund into a single fund, the Deposit Insurance Fund. This change was made effective March 31, 2006. The FDIC maintains the insurance fund by assessing a premium on member institutions. The amount each institution is assessed is based both on the balance of insured
deposits A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts, current accounts or any of several other types of accounts explained below. ...
as well as on the degree of
risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environme ...
the institution poses to the fund. When the FDIC assumes control of a failed institution, it uses the insurance fund to pay depositors their insured balances. This results in a loss to the fund that must be replenished from the assets of the failed bank or from member bank premiums. In the event that the FDIC exhausts the insurance fund and cannot meet obligations with advances from member banks, it has a statutory $100 billion line of credit from the federal Treasury.


Insurance requirements

To receive this benefit, member banks must follow certain liquidity and reserve requirements. Banks are classified in five groups according to their risk-based capital ratio: * Well capitalized: 10% or higher * Adequately capitalized: 8% or higher * Undercapitalized: less than 8% * Significantly undercapitalized: less than 6% * Critically undercapitalized: less than 2% When a bank becomes undercapitalized, the institution's primary regulator issues a warning to the bank. When the number drops below 6%, the primary regulator can change management and force the bank to take other corrective action. When the bank becomes critically undercapitalized the chartering authority closes the institution and appoints the FDIC as receiver of the bank. At Q4 2010, 884 banks had very low capital cushions against risk and were on the FDIC's " problem list".


Resolution of insolvent banks

Upon a determination that a bank is insolvent, its chartering authority—either a state banking department or the U.S. Office of the Comptroller of the Currency—closes it and appoints the FDIC as receiver. In its role as a receiver the FDIC is tasked with protecting the depositors and maximizing the recoveries for the creditors of the failed institution. The FDIC as receiver is functionally and legally separate from the FDIC acting in its corporate role as deposit insurer. Courts have long recognized these dual and separate capacities as having distinct rights, duties and obligations. The goals of receivership are to market the assets of a failed institution, liquidate them, and distribute the proceeds to the institution's creditors. The FDIC as receiver succeeds to the rights, powers, and privileges of the institution and its stockholders, officers, and directors. It may collect all obligations and money due to the institution, preserve or liquidate its assets and property, and perform any other function of the institution consistent with its appointment. It also has the power to merge a failed institution with another insured depository institution and to transfer its assets and liabilities without the consent or approval of any other agency, court, or party with contractual rights. It may form a new institution, such as a bridge bank, to take over the assets and liabilities of the failed institution, or it may sell or pledge the assets of the failed institution to the FDIC in its corporate capacity. The two most common ways for the FDIC to resolve a closed institution and fulfill its role as a receiver are: * Purchase and Assumption Agreement (P&A), in which deposits (liabilities) are assumed by an open bank, which also purchases some or all of the failed bank's loans (assets). The bank's assets that convey to the FDIC as receiver are sold and auctioned through various methods, including online, and using contractors. * Deposit Payoff, as soon as the appropriate chartering authority closes the bank or thrift, the FDIC is appointed receiver. The FDIC as insurer pays all of the failed institution's depositors with insured funds the full amount of their insured deposits. Depositors with uninsured funds and other general creditors (such as suppliers and service providers) of the failed institution do not receive either immediate or full reimbursement; instead, the FDIC as receiver issues them receivership certificates. A receivership certificate entitles its holder to a portion of the receiver's collections on the failed institution's assets. In 1991, to comply with legislation, the FDIC amended its failure resolution procedures to decrease the costs to the deposit insurance funds. The procedures require the FDIC to choose the resolution alternative that is least costly to the deposit insurance fund of all possible methods for resolving the failed institution. Bids are submitted to the FDIC where they are reviewed and the least cost determination is made.


Covered Insured Depository Institutions Resolution Plans

To assist the FDIC in resolving an insolvent bank, the FDIC requires plans including the required submission of a resolution plan by covered institutions requirement under the Dodd Frank Act. In addition to the Bank Holding Company ("BHC") resolution plans required under the Dodd Frank Act under Section 165(d), the FDIC requires a separate Covered Insured Depository Institution ("CIDI") resolution plan for US insured depositories with assets of $50 billion or more. Most of the largest, most complex BHCs are subject to both rules, requiring them to file a 165(d) resolution plan for the BHC that includes the BHC's core businesses and its most significant subsidiaries (i.e., "material entities"), as well as one or more CIDI plans depending on the number of US bank subsidiaries of the BHC that meet the $50 billion asset threshold. On December 17, the FDIC issued guidance for the 2015 resolution plans of CIDIs of large bank holding companies (BHCs). The guidance provides clarity on the assumptions that are to be made in the CIDI resolution plans and what must be addressed and analyzed in the 2015 CIDI resolution plans including: * The assumption that the CIDI must fail. * The cause of CIDI failure must be a core business loss or impairment. * At least one "multiple acquirer strategy" is required in the plan. * A deep level of granularity is expected in the plan. * Sales strategies must be feasible and supported by considerable acquirer detail. * A detailed financial and liquidity analysis is needed. * Key legal issues must be considered. * Resolution obstacles must be addressed. * The CIDI must be insolvent at the start of resolution.


Insured products

FDIC deposit insurance covers
deposit account A deposit account is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be savings accounts, current accounts or any of several other types of accounts explained below. ...
s, which, by the FDIC definition, include: * demand deposits (checking accounts of a type that formerly could not legally pay interest), and
negotiable order of withdrawal account In the United States, a negotiable order of withdrawal account (NOW account) is a deposit account that pays interest on which an unlimited number of checks may be written. A negotiable order of withdrawal is essentially identical to a check drawn ...
s (NOW accounts, i.e., savings accounts that have check-writing privileges) *
savings account A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transac ...
s and money market deposit accounts (MMDAs, i.e., higher-interest savings accounts subject to check-writing restrictions) * time deposits including certificates of deposit (CDs) * outstanding cashier's checks, interest checks, and other
negotiable instrument A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...
s drawn on the accounts of the bank * accounts denominated in foreign currencies Accounts at different banks are insured separately. All branches of a bank are considered to form a single bank. Also, an Internet bank that is part of a
brick and mortar Brick and mortar (also bricks and mortar or B&M) refers to a physical presence of an organization or business in a building or other structure. The term ''brick-and-mortar business'' is often used to refer to a company that possesses or leases r ...
bank is not considered to be a separate bank, even if the name differs. Non-US citizens are also covered by FDIC insurance as long as their deposits are in a domestic office of an FDIC-insured bank. The FDIC publishes a guide entitled "Your Insured Deposits", which sets forth the general characteristics of FDIC deposit insurance, and addresses common questions asked by bank customers about deposit insurance.


Items not insured

Only the above types of accounts are insured. Some types of uninsured products, even if purchased through a covered financial institution, are: *
Stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...
s, bonds, and
mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV ...
s including money funds ** The
Securities Investor Protection Corporation The Securities Investor Protection Corporation (SIPC ) is a federally mandated, non-profit, member-funded, United States corporation created under the Securities Investor Protection Act (SIPA) of 1970 that mandates membership of most US-register ...
, a separate institution chartered by Congress, provides protection against the loss of many types of such securities in the event of a ''brokerage failure,'' but ''not'' against ''losses on the investments.'' ** Further, as of September 19, 2008, the
United States Treasury The Department of the Treasury (USDT) is the national treasury and finance department of the federal government of the United States, where it serves as an executive department. The department oversees the Bureau of Engraving and Printing an ...
is offering an ''optional'' insurance program for money market funds, which guarantees the value of the assets. ** Exceptions have occurred, such as the FDIC bailout of bondholders of Continental Illinois. * Investments backed by the U.S. government, such as Treasury securities * The contents of
safe deposit box A safe deposit box, also known as a safety deposit box, is an individually secured container, usually held within a larger safe or bank vault. Safe deposit boxes are generally located in banks, post offices or other institutions. Safe deposit ...
es. *: Even though the word deposit appears in the name, under federal law a safe deposit box is not a deposit account – it is merely a secured storage space rented by an institution to a customer. * Losses due to
theft Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for som ...
or
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...
at the institution. *: These situations are often covered by special insurance policies that banking institutions buy from private insurance companies. * Accounting errors. *: In these situations, there may be remedies for consumers under state contract law, the
Uniform Commercial Code The Uniform Commercial Code (UCC), first published in 1952, is one of a number of Uniform Acts that have been established as law with the goal of harmonizing the laws of sales and other commercial transactions across the United States through UC ...
, and some federal regulations, depending on the type of transaction. * Insurance and
annuity In investment, an annuity is a series of payments made at equal intervals.Kellison, Stephen G. (1970). ''The Theory of Interest''. Homewood, Illinois: Richard D. Irwin, Inc. p. 45 Examples of annuities are regular deposits to a savings account, m ...
products, such as
life Life is a quality that distinguishes matter that has biological processes, such as signaling and self-sustaining processes, from that which does not, and is defined by the capacity for growth, reaction to stimuli, metabolism, energy tra ...
, auto and homeowner's insurance.


See also

* List of bank failures in the United States (2008–present) *
FDIC problem bank list In American finance, the FDIC problem bank list is a confidential list created and maintained by the Federal Deposit Insurance Corporation which lists banks that are in jeopardy of failing. The list is closely monitored, and if problems continue wit ...
*
Banking Act of 1933 The Banking Act of 1933 () was a statute enacted by the United States Congress that established the Federal Deposit Insurance Corporation (FDIC) and imposed various other banking reforms. The entire law is often referred to as the Glass–Stea ...
* Call report * Federal Deposit Insurance Reform Act of 2005 * Title 12 of the Code of Federal Regulations *
Fractional-reserve banking Fractional-reserve banking is the system of banking operating in almost all countries worldwide, under which banks that take deposits from the public are required to hold a proportion of their deposit liabilities in liquid assets as a reserve ...


Related agencies and programs

* CAMELS Rating System – developed by the FDIC's Division of Risk Management Supervision (RMS) to rate each U.S. bank and credit union *
Canada Deposit Insurance Corporation The Canada Deposit Insurance Corporation (CDIC; french: Société d'assurance-dépôts du Canada) is a Canadian federal Crown Corporation created by Parliament in 1967 to provide deposit insurance to depositors in Canadian commercial banks and ...
– Canadian counterpart to FDIC * National Credit Union Share Insurance Fund – NCUA counterpart to FDIC


Notes


References


Bibliography

* * * * *


Further reading


"Your Bank Has Failed: What Happens Next?"
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60 Minutes ''60 Minutes'' is an American television news magazine broadcast on the CBS television network. Debuting in 1968, the program was created by Don Hewitt and Bill Leonard, who chose to set it apart from other news programs by using a unique sty ...
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History including Boards of Directors

"Federal Deposit Insurance for Banks and Credit Unions"
Congressional Research Service The Congressional Research Service (CRS) is a public policy research institute of the United States Congress. Operating within the Library of Congress, it works primarily and directly for members of Congress and their committees and staff on a ...


External links


Federal Deposit Insurance Corporation
(official website)
Federal Deposit Insurance Corporation
in the ''
Federal Register The ''Federal Register'' (FR or sometimes Fed. Reg.) is the official journal of the federal government of the United States that contains government agency rules, proposed rules, and public notices. It is published every weekday, except on fe ...
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FDIC Statistics at a Glance


{{Authority control Banks established in 1933 1933 establishments in Washington, D.C. Bank regulation in the United States Corporations chartered by the United States Congress Financial regulatory authorities of the United States Government agencies established in 1933 Government-owned companies of the United States Independent agencies of the United States government New Deal agencies Organizations based in Washington, D.C. Deposit insurance in the United States