Legal Profile of Financial Agencies

Federal Deposit Insurance Corporation

• Created by Congress in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s.
• Insures all deposits at insured banks up to the current limit of $250,000 per depositor per insured bank. This limit is a temporary increase from the previous $100,000 limit. It was authorized by Congress and executed by the President on October 3, 2008 with a sunset date of December 31, 2009 to return to the previous limit. More on coverage limits.
• Historically does not receive Congressional appropriations, but instead is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. The Economic Stabilization Act of 2008 temporarily authorizes the FDIC to borrow without limit from the US Treasury.
• Managed by a 5 member Board of Directors, all appointed by the President and confirmed by the Senate, with no more than three being from the same political party. The current Chairman is Sheila C. Bair.