The FDIC (Federal Deposit Insurance Corporation) is an independent agency created by Congress that maintains the stability and public confidence in the United States’ financial system by insuring deposits, examining and supervising financial institutions, and managing receiverships. Congress created FDIC in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. The corporation identifies, monitors, and addresses risks to the deposit insurance funds when a bank or thrift institution fails.
The Bank Insurance Fund and the Savings Association Insurance Fund were established as FDIC responsibilities under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which sought to reform, recapitalize, and consolidate the federal deposit insurance system. The act also designated FDIC as the administrator of the Federal Savings & Loan Insurance Corporation Resolution Fund, which was created to complete the affairs of the former Federal Savings & Loan Insurance Corporation and liquidate the assets and liabilities transferred from the former Resolution Trust Corporation.
The Bank Insurance Fund and the Savings Association Insurance Fund merged into the Deposit Insurance Fund on February 8, 2006, as a result of the President signing the Federal Deposit Insurance Reform Act of 2005 into law. With the congressional approval of the Federal Deposit Insurance Reform Act of 2005, FDIC was required to ensure that approximately 7,400 eligible member institutions received a one-time assessment credit totaling $4.7 billion.
FDIC insures deposits in excess of $4 trillion for its 8,571 member institutions. It had a budget of about $1.1 billion for calendar year 2007 to support its activities in managing the funds. For that year, it processed almost 16.4 million financial transactions.
FDIC relies extensively on computerized systems to support its financial operations and store the sensitive information that it collects. Its local and wide area networks interconnect these systems. To support its financial management functions, the corporation relies on many systems including the New Financial Environment (NFE) Project, a corporate-wide effort focused on implementing an enterprise-wide, integrated software system. In addition, the corporation relies on the Assessment Information Management System (AIMS) to calculate and collect FDIC deposit insurance premiums and Financing Corporation bond principal and interest amounts from insured financial institutions. FDIC financial systems also process and track financial transactions such as disbursements made to support operations.
Other FDIC systems include:
- FFIEC Central Data Repository (FFIEC-CDR)
- Legal Integrated Management System (LIMS)
- Receivership Liability System (RLS)
- Risk-Related Premium System (RRPS), and
- Virtual Supervisory Information on the Net (ViSION)
- Federal Deposit Insurance Corporation Act, June 16, 1933, Ch. 89, § 8.
- FDIC is considered an independent agency of the federal government and receives no congressional appropriations — it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities.
- Pub. L. No. 101-73, §211, 103 Stat. 183, 218-22 (Aug. 9, 1989).
- Pub. L. No. 109-171, tit. II, Subtitle B, § 2102, 120 Stat. 9 (Feb. 8, 2006).
- The Financing Corporation, established by the Competitive Equality Banking Act of 1987, is a mixed-ownership government corporation whose primary purpose was to function as a financing vehicle for the Federal Savings & Loan Insurance Corporation. Effective December 12, 1991, as provided by the Resolution Trust Corporation Refinancing, Restructuring and Improvement Act of 1991, the Financing Corporation’s ability to issue new debt was terminated. Outstanding Financing Corporation bonds, which are 30-year non-callable bonds with a principal amount of approximately $8.1 billion, mature in 2017 through 2019.
- The Assessment Information Management System (AIMS) has several purposes. The main purpose is the calculation of FDIC insured institutions’ insurance assessments and Financing Corporation payments on a quarterly basis. In addition, AIMS has the functionality to gather the deposit and other data needed to calculate the assessments and Financing Corporation payments; allow FDIC Assessment Operation Section and Assessment Management Section staff to make necessary adjustments/amendments to financial institution demographic and financial data; produce invoices; produce Automated Clearing House files; create assessment entries to post to the NFE-General Ledger; monitor financial institution changes (e.g., new institutions, terminated institutions, mergers, branch sales) and produce management reports.
- FDIC Cyber Fraud and Financial Crimes Section