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Federal Deposit Insurance Corporation

Overview#

Federal Deposit Insurance Corporation (FDIC) is a United States federal government corporation providing deposit insurance to depositors in United States Banks.

Federal Deposit Insurance Corporation was created by the 1933 National Bank Act during the Great Depression (June 16 1933) 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. Since the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2011, the Federal Deposit Insurance Corporation insures deposits in member banks up to US $250,000 per ownership category.[3]

Federal Deposit Insurance Corporation and its reserves are not funded by public funds; member banks' insurance dues are the Federal Deposit Insurance Corporation's primary source of funding. The FDIC also has a US$100 billion line of credit with the United States Department of the Treasury.

Only banks are insured by the Federal Deposit Insurance Corporation; credit unions are insured up to the same insurance limit by the National Credit Union Administration, which is also a government agency.

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