The FDIC is like money in the bank, only better. The Federal Insurance Corporation (FDIC) insures deposits and retirement accounts in member accounts for up to $250,000, protecting depositors in the event of bank failure. It also supervises financial institutions and manages failed banks. The FDIC is funded by member bank premiums for deposit insurance coverage and from earnings on investments in US Treasury securities. It insures more than $9 trillion of deposits, covering virtually every bank in the country. (It does not cover mutual funds, securities, or related investments.) An independent federal agency, the FDIC was created in 1933 in response to bank runs during the Great Depression.
The FDIC examines and supervises more than 4,500 saving banks and is funded by premiums that member banks pay for deposit insurance coverage and from earnings on investments in US Treasury securities. The agency insures more than $9 trillion of deposits, covering virtually every bank in the country. The FDIC does not cover mutual funds, securities, or related investments.
The agency has six regional offices and three temporary satellite offices across the country, in addition to its headquarters in Washington, DC. Funded by premiums paid by member banks, the FDIC is managed by a five-person board of directors, all of whom are appointed by the US President and confirmed by the Senate.
Since FDIC insurance was introduced on January 1, 1934, not a single cent of insured funds has been lost as a result of a bank failure. Bank failures in fiscal 2013 totaled 24, down significantly from a peak of 157 in 2010 in the midest of the Great Recession. In addition, the number of banks on the problem bank list (banks rated "4" or "5" on the CELS rating scale) fell to 467 from a high of 888 in March 2011.
From 2012 to 2013, the FDIC's total revenue decreased 44% and its net income fell by 31%. The agency was was hurt by a decline in assessment revenues fueled by overall lower risk-based assessment rates resulting from continued improvements in the nation's banks’ ratings and financial conditions. In addition, in 2013 the bank refunded $5.9 billion in prepaid assessments to the 5,625 insured depository institutions that had remaining balances.
The FDIC divides its corporate operating budget and expenses into two components: ongoing operations and receivership funding. Receivership funding represents expenses resulting from financial institution failures and is, therefore, largely driven by external forces.
On the other hand, ongoing operations accounts for all other operating expenses and tends to be more controllable and estimable. The agency's corporate operating expenses totaled $2.39 billion in 2014, including $1.79 billion in ongoing operations and $600 million in receivership funding. For 2015 the board of directors approved a corporate operating budget of $2.32 billion, consisting of $1.79 billion for ongoing operations and $525 million for receivership funding.
During 2013 the FDIC launched a technical assistance video program designed to provide useful information to bank directors, officers, and employees on areas of supervisory focus and proposed regulatory changes. It is also focused on promoting household savings, reaching the under-served through mobile technology, examining financial education strategies for school-aged youth, and providing access to safe and affordable savings and transaction products.