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These latter functions have played an important role in the FDICs 50-year history. The Banking Act of 1933 authorized the FDIC to pay up to $2,500 to depositors in insured banks that failed.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system.
The Banking Act of 1933 is signed into law by President Franklin D. Roosevelt. This law creates the Federal Deposit Insurance Corporation (FDIC), by far the most controversial element of the statute. The law puts in place a Temporary Fund that would be effective January 1, 1934, with a basic coverage level of $2,500.
Federal deposit insurance became effective on January 1, 1934, providing depositors with $2,500 in coverage, and by any measure it was an immediate success in restoring public confidence and stability to the banking system. Only nine banks failed in 1934, compared to more than 9,000 in the preceding four years.
Sources: FDIC and Bureau of Labor Statistics (Haver Analytics). Note: The deposit insurance limit was increased temporarily to $250,000 in 2008; the increase was made permanent in 2010. to $10,000, 75 percent coverage on deposits from $10,000 to $50,000, and 50 percent coverage on deposits over $50,000.
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As 60 Minutes reported in 2009, there are three ways the FDIC can take over a bank: It can close it and pay off depositors; run the bank itself; or try to find a buyer.
The FDIC protects depositors of insured banks located in the United States against the loss of their deposits if an insured bank fails. Any person or entity can have FDIC insurance coverage in an insured bank.
What is pass-through deposit insurance coverage? ❑ When funds are deposited by a fiduciary or custodian on behalf of one or more. actual owners of the funds, the FDIC will insure the funds as if the actual owners. had established the deposit in the IDI.

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