Federal Deposit Insurance Corporation Facts

Federal Deposit Insurance Corporation Facts

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Federal Deposit Insurance Corporation FactsWhat is the Federal Deposit Insurance Corporation?

The Federal Deposit Insurance Corporation is a corporation within the United States Government formally created by the passing of the Glass-Steagall Act of 1933. The Federal Deposit Insurance Corporation provides deposit insurance, which formally guarantees the safety of deposits in member banks of up to $250,000 per deposit, for consumers and customers of the respective financial institutions. As of last year, the Federal Deposit Insurance Corporation, better known as the FDIC, insures deposits at over 7,700 financial institutions throughout the United States of America.

In addition to insuring deposits, the Federal Deposit Insurance Corporation also examines and supervises certain financials institutions for safety and soundness, as well as performs specific consumer-protection functions. Furthermore, the Federal Deposit Corporation will help construct and manage banks who have failed as a result of massive debts incurred.

To become insured, a financial institution must meet several insurance requirements established by the FDIC. Member banks must follow specific liquidity and reserve requirements; these levels are classified in five groups according to the specific risk-based capital ratio present: Well capitalized (10% or higher), adequately Capitalized (8% or higher), Undercapitalized (8% or lower), Significantly Undercapitalized (less than 6%) and critically undercapitalized (less than 2%).
When a bank becomes undercapitalized the FDIC will issue a warning to the bank; when the number drops below 6%, the FDIC can change management and force the bank to take corrective actions; when the bank becomes critically undercapitalized the FDIC will declare the bank involvement and assume management.

All institutions formally insured by the Federal Deposit Insurance Corporation are required to place signs at their respective place of business stating that “deposits are backed by the full faith and credit of the United States Government.” Since the establishment of the Federal Deposit Insurance Corporation, no depositor has lost any insured funds as a result of a bank failure.

Federal Deposit Insurance Corporation Quick Facts

The following details outline the administration of the Federal Deposit Insurance Corporation:
The Federal Deposit Insurance Corporation was formed on June 16, 1933
The headquarters of the Federal Deposit Insurance Corporation are located in Washington, D.C.
The Federal Deposit Insurance Corporation is responsible for the jurisdiction over the Federal Government of the United States
The head of the Federal Deposit Insurance Corporation is Sheila Blair
The Federal Deposit Insurance Corporation operates with approximately 5,400 employees


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