Federal Deposit Insurance Corporation(FDIC)

Agency

Legal Definition of Federal Deposit Insurance Corporation 

independent government corporation created in 1933 (after the disastrous collapse of the banking system) with the duty to insure bank deposits in eligible banks against loss in the event of a bank failure and to regulate certain banking practices. The FDIC's income is derived from assessments on insured banks and from interest on the required investment of its surplus funds in government securities. It also has authority to borrow up to $100 billion from the U.S. Treasury. The corporation insures bank deposits in eligible banks, and some savings and loan institutions, up to the statutory limit ($250,000, since the financial crisis of 2008, now made permanent). It also acts as receiver for all national banks placed in receivership and for designated state banks; performs periodic audits of banks for insurance purposes; approves or disapproves mergers, consolidations, and acquisitions in certain cases; issues cease-and-desist orders when it detects violations of approved practices; and performs other duties related to ensuring public confidence in banks and protecting the money supply.

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