MESSAGE FROM THE CHAIRMAN

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 5 

February 22, 2024

The FDIC marked its 90th anniversary since 

President Franklin D. Roosevelt signed the 

Banking Act of 1933, establishing the FDIC as 

the first national deposit insurance system. 

Against the backdrop of the Great Depression 

and the failure of thousands of banks, the 

FDIC was created to maintain financial 

stability and public confidence in our nation’s 

banks. This mission took on heightened 

importance in 2023, which saw the agency 

manage three of the largest FDIC-insured 

bank failures in its history. 

Throughout this challenging year, the FDIC 

workforce carried out its mission-essential 

functions—insuring deposits; supervising 

and examining financial institutions for 

safety, soundness, and consumer protection; making large firms resolvable; and managing 

failed bank receiverships—with the professionalism, proficiency, integrity, and resilience that 

has characterized its history. 

Following is an overview of developments in a number of critical areas over the past year, as 

well as the current economic and financial outlook, and the FDIC’s operational status. 

Ensuring a Safe, Fair, and Inclusive Work Environment

FDIC’s mission success this year and over the last 90 years is because of our people. Ensuring 

that the FDIC workplace and culture align with our core values and that our employees feel 

safe, valued, and respected is my highest priority as Chairman. And, maintaining a strong 

workplace culture is essential to effectively carrying out our mission.

Since November 2023, following news reports about sexual harassment at the FDIC, we 

have developed and begun to implement an Action Plan for a Safe, Fair, and Inclusive Work 

Environment that describes how the FDIC will support victims of sexual harassment and 

discrimination. The plan, incorporating feedback from our employees, specifies a number of 

action items related to identifying and correcting existing problems, repercussions for those 

engaged in sexual harassment or other serious misconduct, leadership accountability, review 

of policies and procedures, training programs, communication and outreach strategies, and 

cultural transformation. 

In addition, the FDIC Board of Directors established a Special Committee to oversee an 

independent third-party review of the agency’s workplace culture. Directors Jonathan 

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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 6 

McKernan and Michael J. Hsu, Acting Comptroller of the Currency, are co-chairs of the 

special committee. In December, the committee selected the law firm of Cleary Gottlieb 

Steen & Hamilton LLP to conduct the independent review, which will cover allegations 

of sexual harassment and interpersonal misconduct at the FDIC, including allegations of 

hostile, abusive, unprofessional, or inappropriate conduct, and management’s response 

to that harassment and misconduct. The review will also assess the FDIC’s workplace 

culture, including any practices that might discourage or otherwise deter the reporting of, or 

appropriate response to, harassment and interpersonal misconduct. 

The findings and recommendations of the third-party review will be incorporated into the 

Action Plan as appropriate.

The Current Outlook for the Banking System

At the end of September 2023, the FDIC insured deposits of $10.6 trillion in approximately 720 

million accounts at 4,623 institutions and supervised 2,952 institutions. As of December 31, 

2023, the FDIC is managing 74 active receiverships with total assets of nearly $84.6 billion. 

The banking industry has proven to be quite resilient despite the period of stress in early 

2023. Net income was high by historical measures, asset quality measures were favorable, 

and the industry remained well capitalized. However, funding pressures continue to challenge 

the industry, particularly for small and mid-sized banks. Nine new banks opened through 

December 2023, and five banks failed. 

The FDIC will continue to monitor the significant downside risks from the effects of inflation, 

elevated market interest rates, and geopolitical uncertainty. Moreover, the economic outlook 

remains uncertain, despite relatively solid growth and low unemployment. These risks could 

cause credit quality and profitability to weaken, loan growth to slow, provision expenses to 

rise, and liquidity to become more constrained. 

In addition, commercial real estate (CRE) loan portfolios, particularly loans backed by office 

properties, face challenges when loans mature as demand for office space remains weak and 

property values continue to soften. Banks have tightened underwriting standards over the 

past year across a range of household and business loans, and they may continue to tighten 

further this year.

These will be matters of continued supervisory attention by the FDIC.

The Failures of Silicon Valley Bank, Signature Bank, 

and First Republic Bank

In the first half of the year, three large regional banks failed. Actions taken by the FDIC, Board 

of Governors of the Federal Reserve System (Federal Reserve or FRB), and the Secretary of the 

Treasury in consultation with the President stabilized the banking system, stemmed potential 

contagion from the failures, and ensured that depositors continued to have access to their 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 7 

savings, that small businesses and other employers could continue to make payrolls, and that 

other banks could continue to extend credit to borrowers and serve as a source of support. 

Throughout this particularly challenging time, the FDIC workforce demonstrated a high degree 

of proficiency, readiness, and fortitude and effectively carried out its mission for the American 

public. 

On March 10, 2023, the California Department of Financial Protection and Innovation closed 

Silicon Valley Bank (SVB) of Santa Clara, California. This action followed two days after SVB 

announced that it had sold securities at a loss to meet deposit withdrawals since the second 

quarter of 2022 and planned to raise capital. This prompted a run on the bank’s uninsured 

deposits, on which it was 90 percent reliant. In a period of less than 24 hours, depositors 

withdrew or sought to withdraw nearly all of SVB’s deposits.

Contagion effects from SVB’s failure began to spread to other banks with perceived similar 

risk characteristics, including heavy reliance on uninsured deposits. For two of these banks 

— Signature Bank, New York, New York and First Republic Bank, San Francisco, California 

— deposit outflows became deposit runs and exposed other weaknesses that could not 

be overcome, leading to their failures. Signature Bank was closed by the New York State 

Department of Financial Services on March 12, 2023. Seven weeks later, First Republic Bank 

was closed by the California Department of Financial Protection and Innovation on May 1. The 

FDIC was appointed as receiver for all three institutions.

The contagion effect through uninsured deposits threatened additional bank failures and 

posed genuine financial stability risk. A significant number of the uninsured depositors at SVB 

and Signature Bank were small and medium-sized businesses. As a result, there were concerns 

that losses to these depositors would put them at risk of not being able to make payroll and 

pay suppliers. Moreover, with the liquidity of banking organizations further reduced and their 

funding costs increased, banking organizations could become even less willing to lend to 

businesses and households. These effects would contribute to weaker economic performance, 

further damage financial markets, and have other material negative effects.

Faced with these risks, the FDIC Board voted unanimously on March 12, to recommend 

that the Secretary of the Treasury, in consultation with the President, make a systemic risk 

determination under the Federal Deposit Insurance (FDI) Act with regard to the resolutions of 

SVB and Signature Bank. That same day, the Board of the Federal Reserve unanimously made 

a similar recommendation. Thereafter, the Secretary of the Treasury, in consultation with 

the President, determined that complying with the least-cost requirements in the FDI Act 

would have serious adverse effects on economic conditions or financial stability, and any 

action or assistance taken under the systemic risk exception would avoid or mitigate such 

adverse effects.

This determination enabled the FDIC to extend deposit insurance protection to all of the 

depositors of SVB and Signature Bank, including uninsured depositors, in winding down the 

two failed banks. The senior management and boards of the failed banks were removed, the 

shareholders lost their investments, and creditors took losses in accordance with the losses 

of these banks. The cost to the Deposit Insurance Fund of protecting the uninsured 

depositors will be paid for through a special assessment on the banking industry, consistent 

with the statute.
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 8 

Subsequently, when the failing First Republic Bank was resolved on May 1, 2023, the acquiring 

bank assumed all of the deposits and substantially all of the assets of First Republic Bank in a 

transaction that met the least cost requirements of the FDI Act.

At my request, the FDIC’s Chief Risk Officer conducted thorough internal reviews of the 

agency’s supervision of Signature Bank and First Republic Bank. The Signature Bank review 

clearly identified the root cause of Signature Bank’s failure as poor management. In the 

case of First Republic Bank, the primary cause of failure was found to be a loss of market 

and depositor confidence, resulting in a bank run. Attributes of the bank’s business model 

and management strategies, concentrated in long-term jumbo mortgages, made it more 

vulnerable to interest rate changes and the contagion that ensued following the failure of SVB.

In both cases, the FDIC reviews identified areas where its supervisory efforts could have been 

more timely and forward looking, and identified lessons learned affecting a range of safety 

and soundness and supervisory issues for further consideration, including interest rate risk, 

unrealized losses on securities and loans, concentrations of uninsured deposits, rapid growth, 

and escalation of supervisory attention and compelling compliance if necessary. 

Managing the Deposit Insurance Fund (DIF)

The DIF balance declined to $121.8 billion as of December 31, 2023, primarily due to loss 

provisions for the five bank failures during the year. Following the failure of two large banks in 

March 2023, the banking industry experienced outflows of total deposits, but also experienced 

strong insured deposit growth. This growth in insured deposits, coupled with the decline in 

the DIF balance, resulted in a decline in the fund reserve ratio from 1.23 percent at September 

30, 2022 to 1.13 percent as of September 30, 2023. The reserve ratio is the ratio of the DIF 

balance to total insured deposits in the United States. 

A total of five banks failed in 2023, resulting in a combined estimated loss at December 31 of 

$40.4 billion. As of December 2023, the FDIC estimated the cost for the failures of SVB and 

Signature Bank to total $23.6 billion. Of that estimated total cost, the FDIC estimates that 

approximately $20.4 billion was attributable to the cost of covering uninsured deposits as a 

result of the systemic risk determinations, following the closures of SVB and Signature Bank. 

These loss estimates will be periodically adjusted as assets are sold, liabilities are satisfied, 

and receivership expenses are incurred. The final cost will be determined when the FDIC 

terminates the receivership.

By statute, the FDIC is required to recover the $20.4 billion estimated loss arising from the 

use of a systemic risk determination through one or more special assessments. Accordingly, 

in November 2023, the FDIC Board approved a final rule under which the FDIC will collect the 

special assessment at an annual rate of 13.4 basis points beginning with the first quarterly 

assessment period of 2024 (i.e., January 1 through March 31, 2024) with an invoice payment 

date of June 28, 2024, and will continue to collect special assessments for an anticipated 

total of eight quarterly assessment periods. The special assessment amount and collection 

period may change as the estimated loss is periodically adjusted or if the amount collected 

each quarter changes. The base for the special assessment is equal to an insured depository 

institution’s (IDI’s) estimated uninsured deposits for the December 31, 2022 reporting period.
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 9 

The FDIC estimates that a total of 114 banking organizations will be subject to the special 

assessment. No banking organizations with total assets under $5 billion will pay the special 

assessment. Banks with assets over $50 billion will pay 95 percent of the special assessment.

The remaining estimated loss from the failures of SVB and Signature Bank of $3.2 billion, as 

well as, estimated losses of $16.7 billion from the May 2023 closure of First Republic Bank, 

directly impacted the DIF balance.

As required by the Federal Deposit Insurance Act, the FDIC has been operating under a 

Restoration Plan since September 15, 2020, which aims to restore the DIF to the statutory 

minimum reserve ratio of 1.35 percent within eight years. Notwithstanding the recent 

losses due to bank failures and growth in insured deposits, the DIF remains on track to 

meet the statutory minimum reserve ratio of 1.35 percent by the eight-year deadline of 

September 30, 2028.

Exploring Deposit Insurance System Reform

The failures of SVB and Signature Bank, and the approval of the two recommendations for 

Systemic Risk Exceptions to the Least Cost Test, raised fundamental questions about the role 

of deposit insurance in the U.S. banking system. The events of March 2023 further suggest 

that the banking system has evolved in ways that could increase its exposure to deposit runs. 

To address the broader questions about the role of deposit insurance to promote financial 

stability and prevent bank runs, the FDIC initiated a comprehensive review to examine the role 

of deposit insurance and a range of potential changes, as well as additional policies and tools 

that may complement changes to deposit insurance coverage.

The resulting report, Options for Deposit Insurance Reform,

1

 evaluated three options to reform 

the deposit insurance system: 1) Limited Coverage, which maintains the current structure 

of deposit insurance in which there is a finite deposit insurance limit (possibly higher than 

the current $250,000 limit) by ownership rights and capacities; 2) Unlimited Coverage, which 

extends unlimited deposit insurance to all depositors; and 3) Targeted Coverage, which allows 

for different levels of deposit insurance coverage across different types of accounts and 

focuses on higher coverage for business payment accounts. 

Although each option has strengths and weaknesses, Targeted Coverage for business payment 

accounts captures many of the financial stability benefits of expanded coverage while 

mitigating many of the undesirable consequences. However, there are significant unresolved 

practical challenges to Targeted Coverage, including defining accounts for additional coverage 

and preventing depositors and banks from circumventing differences in coverage.

The report also underscores the important role that supervision and regulation play in limiting 

the risks to the deposit insurance system. 

1 Options for Deposit Insurance Reform is available at https://www.fdic.gov/analysis/options-deposit-insurancereforms/index.html. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 10 

Any option to expand deposit insurance coverage would require Congressional action. 

The FDIC remains committed to engaging with the public, as well as with stakeholders in 

the industry and with policymakers in the Congress as policies to strengthen the deposit 

insurance system and meet emerging challenges are considered.

Strengthening the Community Reinvestment Act

In October, the FDIC, Federal Reserve, and Office of the Comptroller of the Currency (OCC) 

adopted a final rule to strengthen and modernize the Community Reinvestment Act (CRA). The 

final rule represents an ambitious effort to adapt CRA to the dramatically changed nature of 

the banking business since the law’s enactment in 1977 and the last major rule change in 1995. 

Most of the rule’s requirements will be applicable beginning January 1, 2026. The remaining 

requirements will be applicable on January 1, 2027.

First, banks today no longer serve their customers exclusively through a branch-based 

network around which CRA assessment areas are currently drawn. They increasingly interact 

with customers either online or through mobile phones in areas in which the bank may not 

have a physical presence, including so-called “banking deserts,” which include rural and other 

underserved areas, Native Land areas, and low- and moderate-income communities. Lending 

by banks in such areas has not been subject to a CRA evaluation.

The final rule adapts to this new banking reality by requiring large banks to establish Retail 

Lending Assessment Areas (RLAAs) in those geographies outside of their physical footprint 

where they originate significant numbers of closed-end mortgage loans or small business 

loans.

Under the final rule, the loans in these new assessment areas will be subject to CRA review and 

evaluation for the first time, ensuring that large banks serve all segments of the communities 

in which they are chartered to do business. This represents a critically important adaptation of 

CRA to the changing nature of the business of banking.

Second, the final rule establishes a series of metrics and benchmarks against which banks 

will be measured for CRA performance for lending and community development. This will 

allow the banking agencies to establish specific standards for bank performance to achieve 

a particular CRA rating that will provide an incentive for increased lending to underserved 

communities. It will also provide greater clarity, transparency, and predictability for the banks 

and the public, as well as consistency among the agencies.

Third, the final rule tailors CRA evaluations and data collection to bank size, complexity, and 

business type. For instance, small banks would continue to be evaluated under the existing 

regulatory framework but would have the option to be evaluated under aspects of the new 

regulation. However, large banks with assets over $2 billion will have to collect and report 

community development data, and large banks over $10 billion in assets will have additional 

data collection and reporting requirements relating to deposits and retail banking products.

Fourth, the final rule recognizes the importance of minority depository institutions (MDIs), 

Treasury Department-certified Community Development Financial Institutions (CDFIs), 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 11 

Women’s Depository Institutions (WDIs), and Low Income Credit Unions (LICUs) in providing 

financial access to underserved consumers and communities.

For example, the final rule creates a specific community development definition for eligible 

activities, such as investments, loan participations, and other ventures conducted by all 

banks with these institutions, including by other MDIs, WDIs, or CDFI banks. All community 

development activities conducted by banks with these entities will get CRA credit under the 

final rule.

Fifth, in order to promote transparency, the final rule will require large banks to disclose 

the distribution of home mortgage loan originations and applications in each of the bank’s 

assessment areas by income, race and ethnicity. This aspect of the final rule is intended to 

provide transparent information to the public in regard to the bank’s lending to communities 

of color. Although the data disclosed would not have an impact on the CRA ratings of the 

bank, it would allow the public to compare lending by a bank in those communities to other 

communities, as well as allow comparisons to other banks.

Sixth, while we know that technology has led to significant changes in the provision of bank 

services, bank branches continue to play a crucial role for consumers and communities. For 

example, just over three-quarters of closed-end mortgages originated by large banks in recent 

years were located in branch-based assessment areas. These branch-based assessment areas 

remain a foundation of CRA. Under the final rule, each banking agency will be required to 

evaluate a bank’s record of opening and closing branches to inform the degree of accessibility 

of banking services to low- and moderate-income communities.

Further, the final rule will provide positive CRA consideration to large banks for the offering 

and demonstrated consumer usage of low-cost transaction accounts—accounts with low or no 

minimum balance requirements and no overdraft fees—such as Bank On Certified accounts.

Finally, the rule gives credit to community development activities designed to strengthen 

disaster preparedness and weather resiliency in low- and moderate-income communities. 

These activities may include supporting the establishment of flood control systems in a flood 

prone area, and retrofitting affordable housing to better withstand future disasters or climaterelated events.

The new rule will significantly expand the scope and rigor of CRA and will assure its continued 

relevance for the next generation.

Finalizing the Basel III Capital Rules

Finalizing the Basel III reforms is critical for the safety and soundness of the U.S. banking 

system, financial stability, and the performance of the U.S. economy.

In July, the FDIC, with the FRB and OCC, issued a proposed rulemaking that would modify large 

bank capital requirements to better reflect underlying risks and increase the transparency and 

consistency of the regulatory capital framework. Specifically, the proposal would revise the 

capital framework for banks with total assets of $100 billion or more in four areas: credit risk, 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 12 

market risk, operational risk, and credit valuation adjustment risk. Community banks would 

not be impacted by the proposal.

The proposal also takes into account lessons from the banking turmoil in March of this year 

by seeking to apply a consistent set of capital requirements across large banks. Banks with 

total assets of $100 billion or more would be required to include unrealized gains and losses 

from certain securities in their capital ratios; comply with the supplementary leverage ratio 

requirement; and comply with the counter cyclical capital buffer, if activated. 

The comment period on the proposal closed on January 16, 2024. I look forward to carefully 

considering the comments received and working with the other federal banking agencies to 

finalize and implement Basel III. These important changes to the regulatory capital framework 

will enhance the financial resilience and stability of the banking system, better enabling it to 

serve the U.S. economy.

Addressing Financial Risks Posed by Climate Change

Climate-related trends, including rising sea levels, increases in the frequency and severity of 

extreme weather events, and other natural disasters, as well as the transition to lower carbon 

emitting sources of energy, continue to present challenges for the future resiliency of the 

financial system and banking industry and may pose safety and soundness risks to individual 

banks. Throughout 2023, the FDIC continued its work to ensure that the financial system 

remains resilient despite these rising risks. 

In October, the FDIC, Federal Reserve, and OCC adopted interagency guidance for large 

financial institutions that includes a high-level framework for the safe and sound management 

of exposures to climate-related financial risks. The guidance provides general principles with 

respect to governance; policies, procedures, and limits; strategic planning; risk management; 

data, risk measurement, and reporting; and scenario analysis. It also provides guidance on 

how climate-related financial risks can be addressed in the management of traditional risk 

areas, i.e., credit, liquidity, operational risk, and legal and compliance risks.

Although all financial institutions, regardless of size, may have material exposures to climaterelated financial risks, these principles are intended for the largest financial institutions, 

those with over $100 billion in total consolidated assets. We understand smaller institutions, 

including community banks, may have limited resources and may experience the impacts of 

climate-related financial risks in a manner that differs from large financial institutions.

The FDIC does not make environmental policy, nor does it determine firms or sectors with 

which financial institutions should do business. Financial institutions should fully consider 

climate-related financial risks—as they do all other risks—and continue to take a risk-based 

approach in assessing individual credit and investment decisions. The FDIC expects financial 

institutions to manage climate-related financial risks in a manner that will allow them to 

continue to prudently meet the financial services needs of their communities, including lowand moderate-income and other underserved consumers and communities.
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 13 

Providing Regulatory Relief in Disaster Areas

In 2023, the FDIC provided flexibility to financial institutions in 16 states and territories, where 

communities were affected by severe storms, flooding, tornadoes, wildfires, mudslides, 

typhoons, hurricanes, and other disasters. The FDIC supported financial institutions’ efforts 

to meet customers’ cash and other financial needs by providing flexibility on lending and 

credit policies and more. As these areas continue to recover, the FDIC encourages depository 

institutions to consider all reasonable and prudent steps to assist their customers, consistent 

with safe and sound banking practices. 

Reviewing the Bank Merger Process

The FDIC also continues its efforts to evaluate the effectiveness of the regulatory framework 

for implementing the Bank Merger Act (BMA) of 1960. That framework generally requires 

approval by the FDIC, Federal Reserve, or OCC, as appropriate, for bank mergers after 

consideration of certain specific statutory factors. FDIC approval is also required for a bank 

merger with a non-insured entity. 

Although there has been a significant amount of consolidation in the banking sector over the 

last 30 years, facilitated in part by mergers and acquisitions—and the prospect for continued 

consolidation among both large and small IDIs remains significant—there has not been a 

significant review of the implementation of the BMA in that time. 

The FDIC continues to evaluate and consider comments received in response to a Request 

for Information and Comment on Rules, Regulations, Guidance, and Statements of Policy 

Regarding Bank Merger Transactions published in March 2022. 

In addition, the FDIC is coordinating with the Federal Reserve, OCC, and Department of Justice 

regarding an interagency review of the existing laws, regulations, guidance, and processes 

used by the federal banking agencies under the BMA. These discussions, which are ongoing, 

are consistent with the Presidential Executive Order on Promoting Competition in the 

American Economy. 

Evaluating and Addressing Crypto-Asset Risks to the 

Banking System

The risks associated with crypto-asset activities by banks are novel and complex, and may 

involve safety and soundness, consumer protection, anti-money laundering and the Bank 

Secrecy Act, and potentially financial stability issues. As a result, the FDIC, in coordination 

with the other federal banking agencies, has taken steps to closely monitor crypto-assetrelated activities of banking organizations. For example, the FDIC has issued statements to 

assist banking organizations in ensuring that they have put in place appropriate measures and 

controls to identify and manage risks and comply with all relevant laws.
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 14 

The FDIC requested that all supervised institutions that are considering engaging in, or are 

already engaged in, crypto-asset-related activities notify the FDIC and provide all necessary 

information that would allow the FDIC to assess the safety and soundness, consumer 

protection, anti-money laundering/countering the financing of terrorism, and financial 

stability risks in order to provide supervisory feedback to the institution.

The FDIC also advised all FDIC-insured institutions of the risks of consumer confusion or harm 

arising from crypto-assets offered by, through, or in connection with insured depository 

institutions. These concerns were elevated as a result of certain misrepresentations about 

FDIC deposit insurance by some crypto companies. Inaccurate representations about deposit 

insurance by non-banks, including crypto companies, may confuse consumers and cause 

them to mistakenly believe that these investments are protected by deposit insurance. To 

counter this confusion, the FDIC released consumer education materials advising the public 

that crypto-assets are not deposits insured by the FDIC. In addition, over the course of 

2023, the FDIC issued several cease and desist letters that resulted in companies removing 

misrepresentations about the insured status of crypto products. 

In early 2023, the FDIC, along with the Federal Reserve and the OCC, issued two joint 

statements on crypto-assets. The first, issued in January 2023, addressed several risks posed 

by crypto-assets, including significant volatility in crypto-asset markets; risk management and 

governance practices in the crypto-asset sector exhibiting a lack of maturity and robustness; 

and inaccurate or misleading representations or disclosures by crypto-asset companies; 

among others. Our second joint statement, issued in February 2023, highlighted key liquidity 

risks associated with certain sources of funding from crypto-asset-related entities. 

The agencies continue to emphasize that banking organizations are neither prohibited nor 

discouraged from providing banking services to customers of any specific class or type, as 

permitted by law or regulation. 

Supporting Diversity, Equity, Inclusion, and Accessibility 

Supporting diversity, equity, inclusion, and accessibility (DEIA) enhances the FDIC’s ability to 

carry out its core mission. It is essential that the FDIC’s workforce reflect the diversity and 

experiences of the public it serves. 

Throughout 2023, the FDIC made further progress in implementing corporate DEIA initiatives 

as outlined in our DEI Strategic Plan, including launching empathy training for all employees. 

We also focused on enhancing our recruitment and retention of Hispanic employees and 

addressing female workforce participation. The FDIC remains committed to recruiting 

strategically to reach all available talent in the labor market, providing advancement 

opportunities to current employees, and enhancing employee engagement at all levels.

The FDIC’s commitment to DEIA in the broader financial industry is reflected through our 

Financial Institution Diversity Self-Assessment program. This program supports the efforts 

of supervised institutions to create and grow their diversity programs, allowing them to build 

strong relationships with their clients and communities, maximize workforce representation, 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 15 

and develop and implement inclusion efforts. In 2023, we continued our outreach to 

community banks and trade associations to increase awareness and participation in the 

assessment program, and we launched “office hours,” an initiative to provide more hands-on 

technical assistance to the financial institutions and to increase voluntary participation. 

Supporting Minority Depository Institutions (MDIs) and

Community Development Financial Institutions (CDFIs)

The preservation and promotion of MDIs and CDFIs remains a long-standing priority for the 

FDIC, due to the vital role they play in providing mortgage credit, small business lending, and 

other banking services to minority and low- and moderate-income communities. Similarly, 

banks designated as CDFIs by the Treasury’s CDFI Fund provide financial services in lowincome communities and to individuals and businesses that have traditionally lacked access 

to credit. 

The FDIC supervises approximately two-thirds of the 312 FDIC-insured MDIs and CDFIs. 

In addition to its supervisory activities, the FDIC’s Office of Minority and Community 

Development Banking supports the agency’s ongoing strategic and direct engagement with 

MDIs and CDFIs. 

Over the past five years, six de novo MDIs opened their doors (two Asian, one Native American, 

one African American, and two Multi–racial) and 17 existing institutions became newly 

designated MDIs due to changes in control or in board composition. These additions to the MDI 

list mostly offset removals from the list due to mergers, changes in control, or other events 

that caused institutions to lose their MDI eligibility. 

As significant new sources of private and public funding have become available to support 

FDIC–insured MDIs and CDFIs, the FDIC has supported these institutions access to this funding 

through regulatory changes and technical assistance training.

In addition, in November, the FDIC hosted an interagency conference with the OCC and the 

Federal Reserve to facilitate potential partnerships among FDIC-insured MDIs and CDFIs and 

large and regional banks supervised by the FDIC, Federal Reserve, and OCC. The conference 

featured an overview of the new CRA rule and benefits for partnering with mission-driven 

banks. More than 100 FDIC-insured MDIs and CDFI banks participated, in addition to more than 

65 FDIC-insured large and regional banks.

Expanding Access to Banking Services and 

Understanding of Deposit Insurance

Helping Americans understand the benefits of deposit insurance and expanding their access 

to mainstream banking services help strengthen confidence in the nation’s financial system—

the FDIC’s core mission. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 16 

Last year, our National Survey of Unbanked and Underbanked Households found that, despite 

the economic challenges posed by the COVID-19 global pandemic, nearly 96 percent of U.S. 

households are banked. Approximately 4.5 percent of households lacked a bank or credit 

union account, which is the lowest national unbanked rate since the survey began in 2009. 

These results are encouraging, but significant work remains to be done to address large 

disparities that exist in the United States with regard to access to the banking system: 

11.3 percent of Black households and 9.3 percent of Hispanic households were unbanked, 

according to the most recent survey, compared to 2.1 percent of White households. Other 

populations also have lower levels of bank engagement, including lower-income households, 

households with lower levels of formal education, single mothers, and households headed by

a working-age individual with a disability. 

These populations can be reached by taking advantage of bankable moments and by ensuring 

that consumers are aware of, and able to locate and open, bank accounts that can meet their 

needs. We continue to host events, including webinars, workshops, and roundtables, across 

the country that aim to highlight opportunities for local organizations to reach unbanked 

populations.

In addition, in October, we launched a public awareness campaign—“Know Your Risk. Protect 

Your Money.”—that aims to reach consumers who may have lower confidence in the banking 

system or who are unbanked, as well as those who use mobile payment systems, alternative 

banking services, and financial products that may appear to be FDIC-insured but are not.

Following the failure of SVB, Signature Bank, and First Republic Bank earlier this year, a Gallup 

poll found nearly half of Americans surveyed are worried about the safety of their money 

deposited into banks and other financial institutions. We recognized this opportunity to reach 

out to the public and ensure that more consumers understand deposit insurance and how 

it protects their money. Our public awareness campaign addresses that knowledge gap by 

referring consumers to educational material offered in English and Spanish. 

The campaign also responds to an increase in instances of firms or individuals misusing the 

FDIC’s name or logo, or making false or misleading representations about deposit insurance, 

raising confusion among consumers about the insurability of nonbanks and crypto-assets.

We will continue the campaign into 2024 to coincide with the start of traditional tax filing 

season, when many consumers receive refund payments—a key opportunity to open an 

account and realize the benefits of deposit insurance. 

Cybersecurity Threats from malicious cyber actors continue to be a significant and evolving risk for banks 

and their service providers. Evaluating cybersecurity practices continues to be a highpriority focus of the FDIC’s supervision program. During 2023, the FDIC conducted 1,243 IT 

examinations at state nonmember institutions and issued four formal enforcement actions. 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 17 

The FDIC also examines the IT services provided to institutions by bank service providers. 

In addition to routine examination procedures, in 2023, the FDIC, Federal Reserve, and OCC 

horizontally reviewed the supply chain risk of the most significant service providers. 

The FDIC actively engages with both the public and private sectors to assess emerging 

cybersecurity threats and other operational risk issues. In October, the FDIC hosted on 

behalf of the Federal Financial Institutions Examination Council (FFIEC) a national banker 

webinar covering cybersecurity awareness with guest speakers from the Federal Bureau of 

Investigation. We also released cybersecurity informational videos for bank directors, bank 

officers, and staff.

Internally, in 2023, the FDIC made significant progress towards adopting the Zero Trust 

Cybersecurity Principles to safeguard its operations and the critical data it manages. This 

progress represents continuous improvement in the agency’s enterprise security posture and 

enhancements in our ability to provide secure and accurate data access. 

Emerging Technology

The FDIC continues to dedicate significant resources to identifying and understanding 

emerging technologies and the implications for financial institutions and their customers 

to ensure the FDIC is prepared to address the changing landscape in financial products 

and services. Since 2016, these efforts have been led by the FDIC’s Emerging Technology 

Steering Committee, which is supported by two staff-level working groups. The committee is 

composed of the Directors of the Divisions of Risk Management Supervision (RMS), Depositor 

and Consumer Protection (DCP), Insurance and Research, Resolutions and Receiverships, 

and Complex Institution Supervision and Resolution, as well as the General Counsel, Chief 

Financial Officer, Chief Innovation Officer, Chief Risk Officer, and Chief Information Officer. The 

Steering Committee met eight times during 2023, and discussed a number of topics, including 

the Executive Order on Artificial Intelligence, various crypto-asset scams used by fraudsters, 

Fed Now, various technology offerings and use cases, and various aspects of distributed 

ledger technology, including oracles and smart contracts. For example, throughout 2023, the 

Steering Committee helped formulate strategies to respond to opportunities and challenges 

presented by emerging technology and to ensure developments align with regulatory and 

supervisory goals. 

Throughout 2023, the Emerging Technology Steering Committee continued work on its 

established objectives through its staff-level working groups to: 

 Comprehend, assess, and monitor the current emerging technology activities, 

risks, and trends; 

 Evaluate the projected impact of emerging technology on the banking system, the 

deposit insurance system, effective regulatory oversight, economic inclusion, and 

consumer protection; 

 Oversee internal working groups monitoring particular aspects of emerging 

technology; 
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 18 

 Recommend follow-up actions, as appropriate, and monitor implementation; and 

 Help formulate strategies to respond to opportunities and challenges presented 

by emerging technology and to ensure developments align with regulatory goals.

Building on the Steering Committee’s efforts, since 2020, the Emerging Technology & AML/

Cyber Fraud Policy Group within the Legal Division has focused on legal issues facing both the 

FDIC and the banking industry arising from emerging forms of technology, such as blockchain 

and artificial intelligence. In addition, in 2023, the FDIC established the Emerging Technology 

Section in RMS to provide examination support and lead policy development related to 

emerging technologies. Similarly, in 2023, the FDIC established the Technology Enterprise 

and Consumer Harm Risk and Innovation Section in DCP to expand technical knowledge and 

supervision capabilities. Separately, throughout the year, staff in RMS and DCP met with 

financial technology companies interested in doing business with financial institutions. 

In addition, the FDITECH group in the CIO organization serves a critical function supporting 

the identification, testing, and adoption of innovative technologies within the FDIC to 

improve the delivery of its core mission responsibilities. FDITECH engages with stakeholders 

throughout the FDIC to identify problems and challenges in programs and operations, and 

conducts proofs of concept aimed at removing barriers and building IT capabilities. This 

includes the evaluation and adoption of technologies that enable the FDIC to keep pace with 

developments within the banking industry. For example, FDITECH is providing Divisions and 

Offices access to unbiased expertise and assistance to collaboratively identify, refine and 

prioritize potential uses of distributed ledger technology (DLT). This effort enables the FDIC to 

identify and analyze risks that DLT can pose to regulated institutions, their customers, and the 

Deposit Insurance Fund, as well as the effects on resolution and receivership activities.

Furthermore, as data becomes more valuable over time, FDITECH is also focused on how to 

best utilize data and technology to meet the demands of the agency. 

In 2024, the FDIC will continue to explore the potential application of new and emerging 

technologies, automations, and process improvements by:

 Exploring the utility and application of robotic process automation and AI to 

reduce the time required to complete manual work; and

 Developing potential use cases that allow employees to learn about distributed 

ledger technologies through hands-on experience. 

Managing FDIC Resources and Operations 

As of March 2023, the FDIC has largely returned to pre-pandemic business operations, 

operating in a hybrid work posture that includes an in-person component for each safety and 

soundness and consumer compliance examination. We have announced that we will transition 

to an even greater on-site presence at our office facilities starting in July 2024.
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FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2023 19 

In December, the FDIC Board adopted a 2024 Operating Budget of $3.0 billion, which 

represents a 6.3 percent decrease from last year’s budget. The budget reflects a 57.5 percent 

decrease in the Receivership Funding component of the budget and an increase of 12 percent 

in the Ongoing Operations component. The budget also authorizes 189 new positions, many 

of which are being added to increase the monitoring and supervision of large banks to support 

early detection of emerging risks and quicker action to ensure that banks are taking the 

necessary steps to mitigate such risks. This increase will bring the 2024 authorized staffing 

total to 6,817. 

The budget provides additional resources to address potential risks to depositors and 

consumers of emerging technologies that are beginning to be used by banks, such as the use 

of artificial intelligence in credit underwriting models. It also includes funding to support 

planned efforts to educate the public about deposit insurance and to continue our multi–year 

IT Modernization Program and our multi–year Facilities Modernization effort. Both of these 

initiatives are critical to ensuring that the FDIC’s future workforce will have the tools and 

resources needed to continue fulfilling our important mission.

Conclusion

This has been a challenging year for the FDIC. However, despite the period of uncertainty 

earlier in 2023, the banking system has remained a source of strength for consumers, 

households, and businesses.

In 2024, the FDIC will carry out its mission to maintain public confidence and stability in 

the U.S. financial system and address risks faced by the banking system by maintaining a 

strong deposit insurance system, examining and supervising financial institutions for safety 

and soundness and consumer protection, making large and complex financial institutions 

resolvable, and managing receiverships. 

We will also be looking inward in 2024 to address the issues in our workplace culture that have 

come to light in recent months. None of the accomplishments outlined in this report would 

be possible without the hard work and commitment of the FDIC workforce. Our employees 

deserve a workplace where they feel safe and valued. 

I am committed to achieving this for our employees, and I remain grateful for their dedication 

to the mission of the FDIC. 

Sincerely,

Martin J. Gruenberg