Federal Deposit Insurance Corporation Improvement Act

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Definition: Federal Deposit Insurance Corporation Improvement Act

Federal Deposit Insurance Corporation is a United States government owned independent agency. It was established under Banking Act of 1933. As in August 2014, the main responsibility of FDIC is to provide insurance to depositors of bank accounts. It has insured total 6638 institutions, which are associated with it. However, insurance limit varies with different ownership categories of depositors. This institution is mainly funded through insurance coverage that depositors pay and also earnings that are being generated through the sale of US Treasury Securities. As a mandatory rule institutions associated with FDIC need to place a sign board at their place for the same.

FDICIA is also referred to as Bank Enterprise Act of 1991 or Foreign Bank Supervision Enhancement Act of 1991 or Qualified Thrift Lender Reform of 1991.

This act was passed by 102nd United States Congress to further enhance the power of Federal Deposit Insurance Corporation. This act gave FDIC the power to borrow the required amount of money directly from the U.S Treasury department and dissolve the problem of failed banks with the help of using any least costly method. It also gave FDIC the power to charge insurance premium according to the amount of risk involved. This act was passed mainly to reform and recapitalize Insurance Deposit and its safety and to improve the supervision as well as regulation of various regulated entities of U.S. It was passed during savings and loan crisis in US during 1980s and 1990s. This crisis is commonly referred to as S&L crisis during which almost 1000 financial institutions failed in US.

Truth in savings Act was also passed on December 19, 1991 as a part of FDICIA 1991. This law mandated that the amount of fee that is going to be charged by bank and interest rates should be uniform while disclosing any kind of information related to opening of a savings account in bank.



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