The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress, in response to the thousands of bank failures that occurred in the 1920s and early 1930s, to maintain stability and public confidence in the nation’s financial system. To advance this goal, the FDIC insures deposits in banks and thrift institutions for amounts up to $250,000; examines and supervises financial institutions for safety, soundness, and consumer protection; and manages receiverships when banks fail. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure.
The President appoints and the Senate confirms a five-person Board of Directors at the FDIC – no more than three directors can be from the same political party – to manage the supervision of more than 4,500 banks and savings banks for operational safety and soundness. This is more than half of the institutions in the banking system. Generally, banks can be chartered by the states or by the federal government, but banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states, but they do not join the Federal Reserve System. In addition, the FDIC is the back-up authority for the remaining insured banks and thrift institutions.
When a bank or thrift institution fails, the FDIC responds immediately to protect insured depositors, which typically involves the chartering authority – the state regulator or Office of the Comptroller of the Currency – closing the troubled institution. The FDIC has several options for resolving institution failures; most commonly, it sells deposits and loans of the failed institution to other institutions, hence, the process of bank mergers and acquisitions. Most of the time, the transition for customers is relatively easy, since those of the failed institution automatically become customers of the assuming institution.
Every consumer who has established a deposit account with any insured banking institution will benefit from being up-to-date on the information provided by this website. The FDIC provides resources to educate and protect consumers, revitalize communities, and promote compliance with the Community Reinvestment Act and fair lending laws. The website has a page dedicated to Consumer News & Information, which are free publications to help consumers be better informed. The Consumer Assistance Online Form gives consumers the opportunity to submit comments and bank complaints. There is also a traditional search box for research queries of the website’s resources and information.
The website makes navigating easy by providing a section dedicated specifically to first-time users. To access the First-Time Users webpage, click the link “Help for First Time Users” located under the “Quick Links” tab on the homepage. The quick links to the most popular materials on the FDIC’s website make navigation seamless because they are categorized by “types of users” and customized to meet the needs of a particular user. Additionally, the main navigation drop-down tab, located on the homepage, provides links to materials in the following categories: Deposit Insurance, Consumer Protection, Industry Analysis, Regulation & Examinations, Asset Sales, News & Events, and About FDIC. Below is a short description of the scope and purpose of each category:
- Deposit Insurance consists of information on insured institutions, deposit insurance coverage of individual accounts, and the deposit insurance premium system.
- Consumer Protection includes resources that are used to educate and protect consumers, revitalize communities, and promote compliance with the Community Reinvestment Act and fair lending laws.
- Industry Analysis offers financial information on specific banks, as well as analysis of the banking industry and economic trends.
- Regulations & Examinations provides information on banking laws and regulations and applicable policies and procedures used by the FDIC in examining financial institutions.
- Asset Sales involves information concerning loans, real estate, and other assets for sale by the FDIC in its role as receiver for failed institutions.
- News & Events offers FDIC announcements and provides a schedule of FDIC-sponsored events.
- About FDIC provides explanations of what the FDIC is and what it does, as well as the corporation’s plan and reports, current job openings, and business opportunities with the FDIC.
~ Courtney Clark, L’15 ~
Class Advisor – Cory M. Lenz, Esq.