FEDERAL DEPOSIT INSURANCE CORPORATION
The Federal Deposit Insurance Corporation
(FDIC) was created on June 16, 1933, under the
authority of the Federal Reserve Act, section 12B
(12 U.S.C.A. § 264(s)). It was signed into law by
President FRANKLIN D. ROOSEVELT to promote
and preserve public confidence in banks at the
time of the most severe banking crisis in U.S.
history. From the STOCK MARKET crash of 1929
to the beginning of Roosevelt’s tenure as presi-
dent in 1933, over 9,000 banks closed their
doors, resulting in losses to depositors of $1.3
billion. The FDIC was established in order to
provide insurance coverage for bank deposits,
thereby maintaining financial stability through-
out the United States.
The FDIC is an independent agency of the
federal government. Its management was estab-
lished by the Banking Act of 1933. It consists of
a board of directors numbering three members,
one the comptroller of the currency, and two
appointed by the president with approval of the
Senate. The two appointed members serve six-
year terms, and one is elected by the members to
serve as chair of the board. The headquarters of
the FDIC is located in Washington,D.C., and the
corporation has 13 regional offices. Most of its
employees are bank examiners.
The FDIC does not operate on funds from
Congress. The capital necessary to start the cor-
poration back in 1933 was provided by the U.S.
Treasury and the 12 Federal Reserve banks. Since
then, its major sources of income have been
assessments on deposits held by insured banks
