Federal Deposit Insurance Corporation (FDIC)

The other organization is the National Credit Union Administration, which manages and safeguards the interests of credit associations.

The Federal Deposit insurance Corporation meaning is an organization of the government of the United States that gives insurance to contributors in U.S. business banks and reserve banks.

History of the Federal Deposit Insurance Corporation

The FDIC was created with the help of the 1933 Banking Act, ordered during the Great Depression to re-establish trust in the American banking framework. More than 33% of banks fizzled in the years before the creation of the Federal Deposit Insurance Corporation, and Bank runs had become quite normal.

At first, the insurance limit was only U.S. Dollar 2,500 for each proprietorship category, and this was escalated many times throughout the years. Since the abandonment of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2011, the Federal Deposit Insurance Corporation safeguards the reserves in its banks up to U.S. Dollar 250,000 for each proprietorship category.

Roles and Responsibilities of the Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation and its funds are not financed by public assets. The member banks' dues of insurance are the Federal Deposit Insurance Corporation's main source of finance. The Federal Deposit Insurance Corporation has a U.S. Dollar 100 billion credit extension with the United States Department of the Treasury.

Until September 2019, the Federal Deposit Insurance Corporation gave out insurance to about 5,256 establishments. Along with that, the Federal Deposit Insurance Corporation monitors and directs certain money-related establishments for security, plays out consumer protection roles, and oversees the fizzled banks' liabilities.

Composition of the Federal Deposit Insurance Corporation

The Board of Directors of the Federal Deposit Insurance Corporation is the overseeing body. The board is made out of five individuals, three designated by the United States president, with the agreement of the United States Senate and two existing members of the office. The three selected individuals serve six-year terms each.

More than three individuals from the board cannot be of a similar political connection. The president, with the agreement of the Senate, additionally assigns one of the designated individuals as the Chairman of the board. The latter serves a five-year term and one of the delegated individuals as Vice Chairman of the board. The existing members of the office are the Comptroller of the Currency and the directors of the Consumer Financial Protection Bureau (CFPB).

The current board of directors (as of March 2019) comprises Jelena McWilliams in the Chairman's position. The position of the Vice-Chairman is still vacant. Martin J. Gruenberg serves as the Internal Director. Joseph Otting is the Comptroller of the Currency, and Kathy Kraninger is the Director of the Consumer Financial Protection Bureau.

Conclusion

The Federal Deposit Insurance Corporation works towards safeguarding the interests of investors who have their reserves in the banks of the United States. Along with that, the FDIC also monitors other financial activities and takes care of the banks' liabilities that are not able to recover their dues.