Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that provides deposit insurance to depositors in U.S. banks and thrift institutions. The FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. The FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. The FDIC also examines and supervises certain financial institutions for safety and soundness, and consumer protection.
History of the FDIC
The FDIC was created by the Banking Act of 1933, also known as the Glass-Steagall Act, in response to the thousands of bank failures that occurred in the 1920s and early 1930s. The FDIC was established to restore public confidence in the banking system by insuring deposits and providing a mechanism for closing insolvent banks. The FDIC was initially funded by assessments on the banks it insured. In 1934, Congress passed the Federal Deposit Insurance Act, which established the FDIC as an independent agency of the federal government.
The FDIC has since grown to become the largest insurer of deposits in the United States. As of December 31, 2020, the FDIC insured deposits of $13.3 trillion in 5,541 insured banks and savings associations. The FDIC also provides deposit insurance coverage for more than 8 million depositors in more than 8,000 non-FDIC insured institutions.
FDIC Insurance Coverage
The FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. This means that if a depositor has more than $250,000 in an insured bank, the FDIC will only insure up to $250,000. The FDIC also provides deposit insurance coverage for more than 8 million depositors in more than 8,000 non-FDIC insured institutions.
FDIC Supervision and Regulation
In addition to providing deposit insurance, the FDIC also examines and supervises certain financial institutions for safety and soundness, and consumer protection. The FDIC has the authority to take corrective action against banks that are not in compliance with applicable laws and regulations. The FDIC also has the authority to close banks that are deemed to be insolvent.
Summary
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that provides deposit insurance to depositors in U.S. banks and thrift institutions. The FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. The FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. The FDIC also examines and supervises certain financial institutions for safety and soundness, and consumer protection. For more information about the FDIC, visit their website at https://www.fdic.gov/.
See Also
- Bank Regulation
- Bank Supervision
- Deposit Insurance
- Financial Institution
- Glass-Steagall Act
- Insolvency
- Savings and Loan Association
- Thrift Institution
- U.S. Banking System
- U.S. Treasury
