Whats the Latest on U.S. Bank Failures?
On the bright side, the deposits of most failed banks were assumed by other banks in transactions that were basically seamless, with the assuming banks opening for business either immediately or very shortly after the closure of the failed bank. Depositors of insured accounts were not affected by the transition. As most people are aware, checking and savings accounts in banks and thrift institutions are insured by the FDIC up to $250,000 per depositor, per insured bank, for each account ownership category.
The FDIC, an independent agency of the federal government, began operating on January 1, 1934, following the thousands of bank failures that occurred in the 1920s and early 1930s. The agency was created for the purpose of promoting confidence in the financial system. Today, the FDIC insures more than $7 trillion of deposits in virtually every bank and thrift in the U.S. No depositor of insured funds has lost a single cent since the FDIC began operations.
Funding for the FDIC is not provided by taxpayer dollars. Rather, it is funded by premiums that banks and thrift associations pay for deposit insurance coverage and from earnings from investments in U.S. Treasury securities. A five-person board of directors is appointed by the President and confirmed by the Senate. No more than three directors can be from the same political party.