Many nations have a series of mechanisms and institutions in charge of ensuring the most adequate functioning of their economy. In the United States context, there are several specific organisms that contribute to strengthen financial stability of the state. Like the Federal Reserve, the FDIC it performs a fundamental task, of which we will talk in more detail.
Article content
- What does the FDIC stand for?
- Importance of the Federal Deposit Insurance Corporation
- What is the role of the FDIC
- What does it cover?
- How to check if the bank is a member of the FDIC?
- Major banks that are members of the FDIC
What does the FDIC stand for?
The Federal Corporation for Deposit Insurance o FDIC in English, is an independent governmental entity created in 1933 as a protective measure. Given the multiple bankruptcies of banking entities during the financial crises in the 1920s and 1930s, this solution was implemented so that no depositor would suffer the loss of their funds again.
The FDIC can be considered as a compensatory mechanism that has the purpose of maintaining the economic stability of the institutions, promoting good financial practices and keep the trust of the people. Typically, this agency offers an assurance of up to $ 250,000 per account, provided that banks or savings entities are associated with it.
This federal agency is headquartered in Washington DC and has a wide variety of regional offices. The direction of the FDIC is managed by a board of 5 directors, who are appointed by the president and ratified by the Senate. This entity does not receive congressional appropriations, but rather premiums paid by institutions for coverage of deposits and earnings on their investments in US Treasury assets.
Importance of the Federal Deposit Insurance Corporation
Although banks use a conservative approach, they have no guarantee that they will always make a profit. When investments lose too much money for some reason, the bank could become illiquid, preventing clients from withdrawing or using their money. The moment you fail financially, the FDIC comes to the rescue to protect your savings.
What is the role of the FDIC
Insured institutions that run out of capital or file for bankruptcy are assisted by the Federal Deposit Insurance Corporation. As we already said, each account holder is entitled to receive up to $ 250,000 per bank. This amount may vary depending on the ownership, since joint or retirement accounts may receive higher compensation.
In addition to ensuring confidence in the American banking system, the FDIC also takes care of:
- Protect the consumer. This federal body ensures that these entities comply with the legal provisions that protect people’s rights. This includes complying with the provisions of regulations such as: Fair Credit Billing Act, the Fair Credit Reporting Act, the Truth-In-Lending Act, and the Fair Debt Collection Practices Act, to name a few.
- Surveillance work. On the other hand, it exercises the function of monitoring more than half of the banks and savings institutions that make up the system, which are 4 thousand. The FDIC is in charge of reviewing the security of the procedures, the good operation and is the first regulator of the banks assigned by the state that does not belong to the Federal Reserve.
What does it cover?
This agency responds immediately when a savings entity or bank stops meeting its clients. When we talk about protection, it is important to know that not all financial instruments are insured. This body is in charge of deposits, which is why it includes:
- Money market accounts.
- Savings and checking accounts.
- Time deposits, such as CDs.
- Official payments issued by affiliated banks, such as money orders and cashier’s checks.
Conversely, there are other assets that do not receive the protection of this agency. In this category we find stocks, bonds, mutual funds, municipal securities, annual products, exchange-traded funds (ETFs), life insurance or the contents of safe deposit boxes.
How to check if the bank is a member of the FDIC?
In case you are comparing institutions in Hispanic Business Blog and you want to verify this information, it is a simple procedure. You just have to visit the Federal Deposit Insurance Corporation website and use the search function. You enter the name, address and other relevant information. Typically, insured entities have the FDIC logo somewhere on their website and offices and have a certificate number, which they give you if you ask.
If you want to know more about this and other federal institutions, you can consult us in the search engine / comparator of Hispanic Business Blog.
Major banks that are members of the FDIC
The vast majority of banks in the United States are members of the FDIC, which gives them customer confidence. Here we collect some of the most important, by volume of assets and by number of clients in the United States:
- Ally bank
- American Express National Bank
- Ameriprise Banc, FSB
- Bank of America
- BNY Mellon
- BB&T Company
- BBVA USA
- BMO Harris Bank
- Capital One Bank
- Charles Schwab Bank
- CIT Bank
- Citibank
- Comerica Bank
- Deutsche Bank Trust Corp
- Discover Bank
- E * Trade Financial Corp
- Fifth Third Bank
- Goldman sachs
- HSBC Bank USA
- Huntington Bank
- JPMorgan Chase & Co
- KeyBank
- M&T Bank
- Morgan stanley
- Northern Bank
- PNC Bank
- Principal Financial Group
- Regions Bank
- Santander Bank
- State Street Corp
- Suntrust Bank
- TD Bank
- US Bank
- Union Bank
- USAA
- Wells fargo
- Zions Bank
