ANNUAL

REPORT

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ANNUAL

REPORT

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CONTENTS 

Mission, Vision, and Values..........................................................................................4 

Message from the Chairman ........................................................................................5 

Message from the Chief Financial Officer.................................................................... 11 

Continuing to Address the Impact of COVID-19 ........................................................... 13 

Diversity, Equity, Inclusion, and Accessibility ............................................................. 15 

I. Management’s Discussion and Analysis ............................................................. 25 

Overview................................................................................................................................27 

Deposit Insurance .................................................................................................................27 

Supervision ...........................................................................................................................28 

Research ................................................................................................................................49 

Innovation/Financial Technology ........................................................................................52 

Community Banking ............................................................................................................57 

Activities Related to Large and Complex Financial Institutions, including 

Systemically Important Financial Institutions ....................................................................60 

Depositor and Consumer Protection ...................................................................................67 

Failure Resolution and Receivership Management.............................................................78 

Information Technology .......................................................................................................81 

International Outreach .........................................................................................................83 

Effective Management of Strategic Resources....................................................................85 

II. Performance Results Summary ........................................................................ 89 

Summary of 2021 Performance Results by Program ..........................................................91 

Performance Results by Program and Strategic Goal ........................................................91 

Prior Years’ Performance Results.......................................................................................101 

III. Financial Highlights ....................................................................................... 115 

Deposit Insurance Fund Performance ...............................................................................117 

IV. Budget and Spending..................................................................................... 121 

FDIC Operating Budget ...................................................................................................... 123 

2021 Budget and Expenditures by Program .....................................................................124 

Investment Spending......................................................................................................... 125 

V. Financial Section ........................................................................................... 127 

Deposit Insurance Fund (DIF) .............................................................................................128 

FSLIC Resolution Fund (FRF) ..............................................................................................143 

Government Accountability Office Auditor’s Report ....................................................... 150 

Management’s Report on Internal Control over Financial Reporting..............................157 

Management’s Response to the Auditor’s Report............................................................ 158 

VI. Risk Management and Internal Controls.......................................................... 159 

Statement of Assurance......................................................................................................160 

Program Evaluation ............................................................................................................161 

Fraud Reduction and Data Analytics Act of 2015 ..............................................................163 

Management Report on Final Actions ...............................................................................163 

VII. Appendices ................................................................................................... 179 

A. Key Statistics...................................................................................................................181 

B. More About the FDIC.......................................................................................................192 

C. Office of Inspector General’s Assessment of the Top Management and 

Performance Challenges Facing the FDIC .....................................................................203 

D. Acronyms ........................................................................................................................248 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MISSION, VISION, AND VALUES 

MISSION 

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created 

by the Congress to maintain stability and public confidence in the nation’s financial 

system by: 

 Insuring deposits,

 Examining and supervising financial institutions for safety and soundness

and consumer protection,

 Making large and complex financial institutions resolvable, and

 Managing receiverships. 

VISION 

The FDIC is a recognized leader in promoting sound public policies; addressing risks 

in the nation’s financial system; and carrying out its insurance, supervisory, consumer 

protection, resolution planning, and receivership management responsibilities. 

VALUES 

The FDIC and its employees have a tradition of distinguished public service. Six core 

values guide us in accomplishing our mission: 

Integrity We adhere to the highest ethical and professional standards. 

Competence We are a highly skilled, dedicated, and diverse workforce that is 

empowered to achieve outstanding results. 

Teamwork We communicate and collaborate effectively with one another and 

with other regulatory agencies. 

Effectiveness We respond quickly and successfully to risks in insured depository 

institutions and the financial system. 

Accountability We are accountable to each other and to our stakeholders to operate in 

a financially responsible and operationally effective manner. 

Fairness We respect individual viewpoints and treat one another and our 

stakeholders with impartiality, dignity, and trust. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
MESSAGE FROM THE CHAIRMAN 

MESSAGE FROM 

THE CHAIRMAN 

Communities across the United 

States and our banking system 

have weathered enormous 

challenges over the course of 

the continuing global pandemic. 

In response to the economic 

and market volatility that 

ensued, the FDIC undertook a 

broad array of swift actions to 

maintain stability and public 

confidence in the nation’s 

banking system. We focused on 

providing necessary flexibility to 

both banks and their customers 

– particularly the most heavily

affected individuals and

businesses – while maintaining 

the safety and soundness of the 

banking system. Throughout 

this period, the FDIC’s 

supervisory activities and other 

essential functions continued.

Our nation’s banks manifested 

resilience despite the persistent 

challenges of the pandemic. They have continued to support individuals and businesses 

through lending and other financial intermediation and by distributing financial support 

provided by the federal government. 

During 2021, the FDIC continued to respond to the economic risks related to the pandemic in 

order to support our banking system’s ability to serve as a source of strength for Americans 

and to meet their financial needs. This Annual Report discusses these efforts in detail, 

describing our supervision and consumer protection activities, efforts to grow the deposit 

insurance fund and enhance our resolution readiness, in addition to providing information 

about FDIC finances, budget, and spending. 

This Annual Report also provides a brief view into the forward-looking initiatives we have 

undertaken in 2021, many of which have been a focus of my chairmanship from the beginning. 

Top among these have been the FDIC’s focus on novel ways to tackle the issues of broadening 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHAIRMAN 

financial inclusion and enhancing the competitiveness of our community banks. In addressing 

both of these goals, we have pushed ourselves to think outside the box regarding how the 

FDIC can use its authorities and platform to create a regulatory system that will help achieve 

these goals. 

Reaching the “Last Mile” 

of Unbanked Americans 

Expanding economic inclusion has been a priority during my tenure as Chairman. The 

pandemic further exacerbated the urgency of expanding access to banking products among 

the most vulnerable Americans. 

The FDIC has seen meaningful improvements in recent years in reaching the “last mile” 

of unbanked households in this country. Based on the results of our biennial survey of 

households, the proportion of U.S. households that were banked in 2019 – 94.6 percent – was 

the highest since the survey began in 2009. 

Notwithstanding these improvements, we recognize that much remains to be done. Our 

survey also showed that 7 million households do not have a banking relationship with which 

to deposit their checks or to save for unexpected expenses. Also noteworthy is that the 

proportion of Black and Hispanic households who do not have a checking or savings account 

at a bank remains substantially higher than the overall “unbanked” percentage. 

As the FDIC considers additional ways to facilitate a more inclusive banking system, we 

recognize the tremendous benefits that financial innovation can deliver to consumers, 

including in the areas of payments and credit. When responsibly managed and regulated, new 

technologies have the potential to bring more people into the banking system, provide access 

to new products and services, and lower the cost of credit. 

To address these challenges, the FDIC is taking a multi-pronged, novel approach. In 2021, our 

Office of Innovation – FDITECH – announced a tech sprint to explore new technologies and 

techniques that would help expand the capabilities of community banks to meet the needs of 

unbanked households. This tech sprint was a public challenge to banks, non-profits, private 

companies, and others to help us reach that “last mile” of unbanked Americans. Specifically, 

the FDIC asked participants to answer the following question: “Which data, tools, and other 

resources could help community banks meet the needs of the unbanked in a cost-effective 

manner, and how might the impact of this work be measured?” Teams came together for a 

demonstration day and presented their proposed solutions in September. 

Alongside our fellow regulators, in 2021 we issued an interagency request for information 

on financial institutions’ use of artificial intelligence, asking whether additional regulatory 

clarity would be helpful. Alternative data and artificial intelligence can be especially useful 

for small businesses, such as sole proprietorships and smaller companies owned by 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHAIRMAN 

women and minorities, which often do not have a long credit history. Novel measures 

of creditworthiness, like income streams, can help to provide critical access to capital, 

particularly in difficult times. 

We continued to leverage our Money Smart financial education curriculum during this past 

year and the 1,500-plus organizations that are part of our Money Smart Alliance to empower 

consumers with information about personal finance. 

We further conducted a targeted public awareness pilot campaign, #GetBanked, in Atlanta 

and Houston to inform consumers about the benefits of developing a relationship with a 

bank. Having a basic checking account can be an important first step to becoming part of 

the financial fabric of this country and we are pleased that an increasing number of banks are 

offering low-cost and no-fee accounts that work for people with limited means. 

Minority Depository Institutions 

One of our most recent achievements is the launch of the Mission-Driven Bank Fund, which 

we announced in September. Based on my conversations with many Minority Depository 

Institutions (MDIs) and Community Development Financial Institutions (CDFIs) early in my 

tenure, I learned that what these institutions need most is capital. I challenged the FDIC to 

come up with a framework that would match these banks with investors interested in the 

particular challenges and opportunities facing those banks and their communities. We are 

pleased that Microsoft and Truist Financial Corporation are the anchor investors in this new 

fund, and Discovery, Inc. will become a founding investor. Combined, these investors are 

pledging $120 million to support mission-driven banks and the communities they serve, with 

additional investments expected in the coming months. The fund will support MDIs and CDFIs 

to build size, scale, and capacity that will, in turn, allow them to provide affordable financial 

products and services to individuals and businesses. The FDIC will not manage the fund, 

contribute capital to the fund, or be involved in the fund’s investment decisions. 

Our longstanding support for MDIs has also included technical assistance, banker roundtables, 

and facilitating partnerships. In more recent years, the FDIC has increased MDI representation 

on our Community Bank Advisory Committee (CBAC), established a new MDI subcommittee 

of the CBAC to highlight the work of MDIs in their communities and to provide a platform 

for MDIs to exchange best practices, and enabled MDIs to review potential purchases of a 

failing MDI before non-MDI institutions are given this opportunity. These efforts were further 

incorporated in a Statement of Policy issued in June 2021 to update, strengthen, and clarify 

the agency’s policies and procedures related to MDIs. 

In November 2021, we created the Office of Minority and Community Development Banking – 

a new Office that will further support the agency’s ongoing strategic and direct engagement 

with MDIs, CDFIs, and other mission-driven banks. The new office will further promote private 

sector investments in low- and moderate-income (LMI) communities. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHAIRMAN 

Promoting the Competitivenes 

of Our Community Banks 

Financial inclusion goes hand-in-hand with supporting the competitiveness of our community 

banks. At the FDIC, we observe in our daily work the vital role that community banks play 

in their local communities and in the U.S. economy overall. Despite their notable lending 

strengths and presence throughout our country, we know that many community banks 

struggle to remain competitive given the rapid pace of technological changes and the 

demands of increasingly tech-savvy consumers. 

From the earliest days of my chairmanship, I have emphasized how important recognizing, 

and adapting to, changes in technology and evolving consumer demands would be to our 

community banks’ survival and their ability to thrive. Today, as we think about the regulatory 

system we want to build coming out of the pandemic, innovation will be even more critical 

to fostering financial inclusion and the competitiveness of our community banks. The FDIC 

worked hard in 2021 on several novel initiatives to do its part to build this future. 

Among other things, we continued our groundbreaking work on the “rapid phased prototyping 

competition.” Through this competition, we sought to tackle the burdens that the current 

call reports place on supervised institutions and to enhance their value to the FDIC. Although 

these reports provide critical data to the FDIC, they do so with several months’ delay, thereby 

reducing the utility of the reporting. More than 30 technology firms were invited to participate 

in this rapid phased prototyping competition, to develop tools for providing more timely and 

granular data to the FDIC on the health of the banking sector while also making such reporting 

less burdensome for banks. Of those 30 firms, we asked four participants to move forward in 

the competition by proposing a proof of concept for their technologies – either independently 

or jointly. 

In 2021, we also actively pursued a groundbreaking approach to facilitate technology 

partnerships by developing the concept for a public/private standard-development 

organization to establish standards for due diligence of vendors and for the technologies they 

develop. Our goal is to standardize the due diligence process in such a way that fundamentally 

improves the ability of banks to partner with technology firms. At the same time, we hope it 

will strengthen compliance with consumer protection laws and regulations, and better allow 

the FDIC to engage in a horizontal review of the products, services, and risk-management 

practices of third-party service providers. We received many supportive comments in 

response to the request for information. We are pursuing the concept actively and will begin 

to engage our fellow regulators and the private sector more closely in order to bring this 

proposal to fruition. 

For our community banks – and our financial system more broadly – innovation is no longer 

a question of “shall we; shall we not” but “how can we do it because we must.” It has been 

my goal as Chairman that the FDIC lay the foundation for the next chapter of banking by 

encouraging innovation that meets consumer demand, promotes community banking, 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
ANNUAL REPORT  9


MESSAGE FROM THE CHAIRMAN 

reduces compliance burdens, and modernizes our supervision while increasing access 

to banking services. The upheaval caused by the pandemic has only underscored the 

importance of these goals. 

Looking Ahead to 

Our “New Normal” 

Though we continue to be encouraged by the state of the banking sector as we enter our 

“new normal,” uncertainty remains, and the FDIC will continue monitoring several industries 

and markets that have been directly impacted by the pandemic and the related economic 

shutdowns. The FDIC remains vigilant about the uneven impact of the pandemic and its 

recovery on different populations throughout the United States. As they have throughout this 

unprecedented time, the FDIC’s 5,694 dedicated employees remain committed to the agency’s 

mission and the financial stability of the United States, as well as its role in supporting a 

financial system that serves all Americans. 

When I stepped into my role at the FDIC, I knew that to address the gap in financial belonging 

and support the competitiveness of our nation’s community banks, we – public and private 

sector entities alike – would have to break the mold. The FDIC staff has been working hard to 

do just that, and as my tenure ends, I want to express my gratitude for their efforts to join me 

on this journey. 

Sincerely, 

Jelena McWilliams 

FEDERAL DEPOSIT INSURANCE CORPORATION 
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MESSAGE FROM THE CHIEF FINANCIAL OFFICER 

MESSAGE FROM 

THE CHIEF 

FINANCIAL OFFICER 

I am pleased to present the FDIC’s 2021 Annual Report, which 

covers financial and program performance information and 

summarizes our successes for the year. 

For 30 consecutive years, the U.S. Government Accountability 

Office has issued unmodified audit opinions for the two funds 

administered by the FDIC: the Deposit Insurance Fund (DIF) and 

the Federal Savings and Loan Insurance Corporation (FSLIC) 

Resolution Fund (FRF). We take pride in our accomplishments 

and continue to consistently demonstrate discipline and 

accountability as stewards of these funds. We remain proactive 

in the execution of sound financial management by providing reliable and timely financial data 

to enhance decision-making and employing tools and strategies to improve the effectiveness 

and efficiency of our financial management operations and reporting. 

2021 Financial and 

Program Results 

Despite continued economic uncertainties related to the pandemic, the resilience of the 

banking industry is reflected in the continued increase in the DIF balance. The DIF balance 

rose to a record $123.1 billion as of December 31, 2021, compared to the year-end 2020 

balance of $117.9 billion. The Fund balance increase was primarily due to assessment revenue, 

offset by a small increase in expenses. No insured financial institutions failed in 2021 and the 

contingent liability for anticipated failures declined to $20.8 million as of December 31, 2021, 

compared to $78.9 million as of December 31, 2020. 

The DIF U.S. Treasury securities investment portfolio balance was $114.6 billion as of 

December 31, 2021, an increase of $4.1 billion over the year-end 2020 portfolio balance 

of $110.5 billion. Record low rates drove a decrease of $730 million in interest revenue on 

DIF investments which totaled nearly $1 billion for 2021, compared to $1.7 billion for 2020. 

Additionally, the DIF balance reflects an unrealized loss on U.S. Treasury securities of $1.2 

billion in 2021, compared to a modest unrealized gain of $483 million in 2020. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MESSAGE FROM THE CHIEF FINANCIAL OFFICER 

FDIC expenditures remained relatively unchanged compared to 2020. Spending totaled 

approximately $1.89 billion—$422 million (or 18.2 percent) less than the 2021 FDIC Operating 

Budget of $2.31 billion and just $15 million (or 0.8 percent) more than 2020 actual spending 

of $1.88 billion. The FDIC Board of Directors recently approved a 2022 FDIC Operating Budget 

totaling $2.26 billion, down $16 million (or 0.7 percent) from the 2021 budget. 

The FDIC’s authorized full-time equivalent staffing rose from 5,728 in 2020 to 5,853 in 2021, a 

2.2 percent increase. Authorized staffing for 2022 is 5,897 full-time equivalent positions, 44 

positions (or approximately 0.8 percent) higher than 2021. 

During 2021, the FDIC completed an agency-wide effort to raise risk awareness and continued 

to mature the enterprise risk management (ERM) program and associated Risk Profile and 

Risk Inventory. The FDIC also enhanced contract administration and oversight management 

controls and increased independent testing of contract invoices and compliance with FDIC 

acquisition policies. In 2022, we will continue to enhance the ERM program, strengthen 

acquisition-related controls, and expand internal control testing efforts. 

I appreciate the FDIC professionals who plan, execute, and account for the agency’s resources. 

As evidenced by three decades of unmodified audit opinions, their commitment to ensuring 

sound financial management provides the foundation for our strong stewardship and ensures 

that reliable financial information is available to our stakeholders. 

Sincerely, 

Bret D. Edwards 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
CONTINUING 

TO ADDRESS THE 

IMPACT OF COVID- ̨ 

Throughout 2021, the FDIC continued to respond to economic disruptions and global financial 

market volatility as a result of the COVID-19 global pandemic. Following the declaration 

of a global pandemic by the World Health Organization in March 2020, the FDIC quickly 

implemented strategies to address challenges related to COVID-19 and focused on providing 

necessary flexibility to both banks and their customers — particularly the most heavily 

affected individuals and businesses — while maintaining the overall safety and soundness of 

the banking system. The FDIC also undertook a robust policy response to ensure that financial 

institutions could continue to serve the needs of households and small businesses. These 

efforts continued throughout 2021. 

In January 2021, the FDIC, Board of Governors of the Federal Reserve System (FRB), Office of 

the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA) and the 

Conference of State Bank Supervisors (CSBS) hosted a webinar for bankers to discuss recent 

changes to the Paycheck Protection Program (PPP). As part of the webinar, officials from the 

Small Business Administration (SBA) 

and the U.S. Department of Treasury 

(Treasury) provided an overview of the 

new features of the PPP associated 

with the recently passed Economic 

Aid to Hard-Hit Small Business, NonProfits and Venues Act. 

During 2021, the FDIC developed a 

Return to the Office Plan (RTO) in 

conjunction with guidelines released 

by the Centers for Disease Control 

and Prevention. The RTO is a threephased approach to ensure employees 

remain safe and healthy when 

returning to physical offices and facilities. FDIC employees remained in a mandatory telework 

status throughout 2021, with only designated, essential personnel returning to FDIC facilities 

on a voluntary, as-needed basis. 

The FDIC also created an intranet website dedicated to COVID-19 to keep employees abreast of 

the latest developments internally and externally related to the pandemic. The site includes 

information on FDIC Guidelines, Prevention/Treatment, the RTO Plan, FDIC Resources, FAQs, 

and other resources. 

FDIC developed a Return to the O⁄ce Plan. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 14 

DIVERSITY AND INCLUSION
 

DIVERSITY AND INCLUSION 

DIVERSITY, EQUITY,

INCLUSION, AND

ACCESSIBILITY 

Diversity, equity, inclusion, and accessibility (DEIA) are fundamental aspects of the work at the 

FDIC. Our ability to meet our mission of preserving and promoting public confidence in the 

U.S. financial system requires that we understand the increasingly diverse U.S. population. 

Establishing and maintaining an equitable, inclusive, and accessible workplace that is as 

diverse as the communities we serve helps us to effectively respond to the needs of those who 

participate in the banking system. 

The Office of Minority and Women Inclusion (OMWI) supports this commitment by ensuring 

equal employment opportunity and evaluating and addressing issues related to the racial, 

ethnic, and gender diversity of the FDIC workforce. OMWI, through its outreach efforts, 

works to ensure the fair inclusion and utilization of minority- and women-owned businesses 

(MWOBs), law firms (MWOLFs), and investors in contracting and investment opportunities. 

OMWI is also responsible for assessing the diversity policies and practices of FDIC-regulated 

financial institutions. 

Workforce Diversity and 

Workplace Inclusion and 

Accessibility at the FDIC 

The FDIC published a new Diversity, Equity, and Inclusion (DEI) Strategic Plan for 2021-23. 

This plan outlines strategies to promote workforce and workplace inclusion and sustainability 

of diversity and inclusion efforts. The plan also calls for the FDIC’s Divisions and Offices 

to establish their own DEIA operational plans, cascading the corporate goals throughout 

the agency. 

In 2021, the FDIC also implemented several new initiatives to increase DEIA throughout the 

agency, including by establishing: 

 A DEIA FDIC Performance Goal. The FDIC implemented a new corporate

performance goal that encompasses promoting DEIA in our workforce and 

business operations. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
DIVERSITY AND INCLUSION 

 Enhanced Recruitment Initiatives. The FDIC participated in various activities 

with the White House Initiative on Advancing Educational Equity, Excellence and 

Economic Opportunity for Historically Black Colleges and Universities (HBCUs) 

and the White House Initiative on Advancing Educational Equity, Excellence, 

and Economic Opportunity for Hispanics to develop and cultivate stronger 

relationships that will ultimately expand our talent pool. 

 New Leadership Development Programs. The FDIC launched two new 

leadership development programs, which are designed to develop the next 

generation of leaders with a corporate-succession management focus to increase 

DEIA in the FDIC’s leadership. 

 “Celebrating our Uniqueness” National Listening Tour. All FDIC employees 

were invited to share their life experiences and discuss how these perspectives 

impact them in the workplace. The sessions focused on: Rural Communities, 

LGBTQ+, Economically Disadvantaged, First Generation Professionals, Persons 

with Disabilities, Veterans, Generations in the Workforce, Religious Beliefs, 

and Caregivers. 

 First Generation (FirstGen) Professionals Program. The FDIC developed and 

implemented a FirstGen initiative to support first generation professionals in 

the workplace. 

 Barrier Analysis. To improve our ability to recruit, retain, and develop 

employees, the FDIC engaged an independent consultant to help us identify 

and develop strategies to address any potential barriers to our DEIA success. 

 Pay Adjustment Review. As a result of a pay equity review in 2020, the FDIC 

implemented a new system for setting incoming employees’ pay. Related to the 

implementation of the new pay system, current employees were afforded the 

opportunity to request a pay adjustment review to ensure that they are paid in 

accordance with the principles underlying the new pay-setting system. 

 Equal Access for People with Disabilities. The FDIC hosted a series of 

educational events as part of a Mission Accessible campaign. The campaign 

promoted awareness of the need for equal access to information for people with 

disabilities. 

As a result of past and current efforts, we continue to make progress to achieve our DEIA goals. 

At the end of 2021, minorities represent 32 percent of the permanent workforce and women 

account for more than 44 percent. Individuals with disabilities account for 14 percent of the 

workforce, above the 12 percent federal benchmark. Further, the FDIC has increased diversity 

across leadership: minorities hold 25 percent of the management-level positions at the FDIC, 

and women hold 41 percent. Almost 13 percent of new FDIC hires in fiscal year 2021 were 

veterans. As a result, we increased onboard representation of veterans, including veterans 

with disabilities. 

Despite these gains, we know there is much more to do, and we remain committed to 

achieving all of the goals outlined in our DEI Strategic Plan. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

DIVERSITY AND INCLUSION 

ACHIEVING FDIC WORKFORCE DEIA GOALS IN ‚TM‚f 

Minorities 

represent 32% 

Women account 

for more than 44% 

Individuals 

with disabilities 

account for 14% 

Almost 13% of 

new FDIC hires in 

fscal year 2021 

were veterans, 

including 

veterans with 

disabilities. 

FDIC has increased diversity across leadership: 

minorities hold 25 percent of the management-level 

positions at the FDIC, and women hold 41 percent. 

Minority- and Women-Owned 

Business Outreach 

Due to COVID-19, many of the events the FDIC typically attends to engage with MWOBs 

were cancelled or postponed in 2021. Instead, the FDIC participated in virtual procurement 

outreach events and attended webinars to connect with MWOBs. The FDIC also targeted 

diverse publications and utilized social media platforms to market its own virtual procurement 

events. Additionally, the FDIC uses its website to raise and improve public awareness about 

the agency’s procurement process and initiatives. 

The FDIC’s staff also served as panelists and participated in 10 procurement events, including 

events hosted by the U.S. Pan Asian American Chamber of Commerce and the U.S. Women’s 

Chamber of Commerce. At these events, the FDIC’s staff provided essential education and 

information about procurement opportunities at the FDIC, and responded to inquiries about 

business opportunities for MWOBs, strategies for connecting with other MWOBs and prime 

contractors for potential teaming and subcontracting opportunities, and challenges MWOBs 

face in the contracting process. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
DIVERSITY AND INCLUSION 

The FDIC also hosted three Pitch Day sessions and two free virtual Technical Assistance 

Events. The Pitch Day events allowed MWOBs to market their business capabilities to the 

FDIC for potential agency contracting opportunities. OMWI also worked with the FDIC’s 

Acquisition Services Branch to host a series of virtual events that highlighted resources 

to enhance networking connections and best practices. These efforts better positioned 

companies for potential partnerships. 

These events also allowed for sharing In 2021, the FDIC firsthand knowledge for responding 

to the FDIC’s request for proposals, paid $130.0 million 

and included recommendations on of its total contract how companies could articulate 

their added-value to the proposal. payments (27 percent) Additionally, FDIC demonstrated a 

mock session of the four phases of to MWOBs, under 

the contracting process to enhance 226 MWOB contracts. the firms’ understanding of our 

acquisition business model. 

In 2021, the FDIC awarded 135 contracts (33 percent) to MWOBs out of a total of 404 issued. 

The FDIC awarded contracts with a combined value of $845.5 million in 2021, of which 49 

percent ($416.4 million) was awarded to MWOBs. By comparison, in 2020, 117 of 409 contracts 

(29 percent) and $90.0 million of $426.7 million (21 percent) was awarded to MWOBs. In 2021, 

the FDIC paid $130.0 million of its total contract payments (27 percent) to MWOBs, under 226 

MWOB contracts. 

MWOB CONTRACTS AWARDED 

In 2021 In 2020 

33% 

135 out of 404 issued 

awarded to MWOBs 

49% 

of combined value 

of contracts awarded 

to MWOBs 

21% 

of combined value 

of contracts awarded 

to MWOBs 

29% 

117 out of 409 issued 

awarded to MWOBs 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
ANNUAL REPORT  9


DIVERSITY AND INCLUSION 

Minority- and Women-Owned 

Law Firm Outreach 

The Legal Division’s outside contracting outreach faced two major challenges in 2021—the 

continued decline in the need for outside counsel services and the COVID-19 pandemic. 

Notwithstanding the decline in bank resolution activity, the FDIC paid $385,000 in legal fees 

to MWOLFs and paid $3.2 million to diverse attorneys in 2021. Taken together, the FDIC paid 

$3.56 million to MWOLFs and diverse attorneys out of a total of $19.56 million spent on outside 

counsel services, for an aggregate 18 percent diversity and inclusion participation rate in 

outside legal contracting in 2021. The FDIC made 11 referrals to MWOLFs, which accounted for 

29 percent of all legal referrals. 

The Legal Division undertook several efforts in 2021 in order to offset the impact of the 

COVID-19 pandemic on legal contracting outreach. First, the Legal Division continued a legal 

contracting advertising campaign for its supplier diversity program in a well-regarded group 

of diversity-related publications. In addition, the Legal Division organized regular virtual 

meetings with current diverse legal services providers (DLSPs) on the FDIC List of Counsel 

Available (LCA) in order to maintain relationships with firms that are currently working with the 

Corporation. Lastly, the Legal Division, in cooperation with OMWI, created the Legal Division 

Virtual Pitch Day. This virtual event provided DLSPs a platform to present their firm’s legal 

expertise to FDIC in-house attorneys. The FDIC Legal Division participated in seven minority 

bar association conferences and three stakeholder events, all of which were virtual programs. 

This included the Legal Division’s participation in a National Association of Minority and 

Women Owned Law Firms (NAMWOLF) webinar about opportunities to perform work for failed 

bank receiverships. Each of the events provided vital networking opportunities, allowing the 

FDIC to maintain a seamless outreach experience and engagement with our stakeholders. 

In 2021, the Legal Division partnered with NAMWOLF to interview and recruit 14 new MWOLFs 

in various geographic areas in the event of an increase in bank resolution activities, and 

increased the percentage of MWOLFs on the LCA from 30 percent to 40 percent. This step 

will ensure an equitable competition for all available legal contracting opportunities, and the 

Legal Division will continue to foster relationships between DLSPs and FDIC in-house counsel. 

Financial Institution Diversity 

Financial Institution Diversity (FID) is a program for assessing the diversity policies and 

practices of FDIC-regulated financial institutions. Financial institutions are encouraged to 

conduct a self-assessment annually, and share results with OMWI. In 2021, the FDIC released 

an automated Form 2710/05, Diversity Self-Assessment of FDIC Regulated Financial Institutions, 

which was designed to make the completion of the assessment more user-friendly and secure 

for financial institutions. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 

DIVERSITY AND INCLUSION 

The FDIC received 148 self-assessments 

from 773 regulated institutions having 100 SELF-ASSESSMENT OF or more employees for the 2020 reporting REGULATED INSTITUTIONS period, representing 19 percent of all 

regulated institutions. 

Analysis of the self-assessment data allows 

OMWI to identify exemplary practices that 

financial institutions have implemented 

as part of their workforce recruitment, 

supplier diversity procurement, and training 

practices. 

19.% 

Minority 773 19%

Regulated institutions FDIC received Depository having 100 or more 148 Self-Assements 

employees Institutions 

Activities 

The preservation and promotion of MDIs remains a long-standing, top priority for the FDIC. 

The FDIC’s research study, Minority Depository Institutions: Structure, Performance, and Social 

Impact, published in 2019, found that MDIs have played a vital role in providing mortgage 

credit, small business lending, and other banking services to minority and low- and moderateincome (LMI) communities. MDIs are anchor institutions in their communities and play a key 

role in building a more inclusive financial system. 

In 2021, significant new sources of private and public funding became available to support 

FDIC-insured MDIs and Community Development Financial Institutions (CDFIs), collectively 

known as “mission-driven banks.” This includes up to $9 billion in funding from Treasury 

through the Emergency Capital Investment Program, as well as $3 billion in new grant funding 

for CDFIs, including $1.2 billion set aside for minority lending institutions. The FDIC initiated 

additional capital support for MDIs and CDFIs through the standup of the Mission-Driven Bank 

Fund (discussed below). 

During 2021, the FDIC pursued several strategies to support MDIs. These included increasing 

engagement and representation, facilitating partnerships to provide new capital and other 

tools and resources, updating policies, and promoting the MDI sector through advocacy, as 

well as by providing outreach, technical assistance, and education and training for MDIs. 

ENGAGEMENT AND REPRESENTATION 

The FDIC’s MDI Subcommittee of the Advisory Committee on Community Banking (CBAC) 

held three virtual meetings in 2021. The subcommittee is comprised of nine MDI executives 

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DIVERSITY AND INCLUSION 

representing all types of MDIs and provides a venue for minority bankers to discuss key issues, 

share feedback on program initiatives, and showcase MDI best practices. 

In addition, representatives from three MDIs serve on the 18-member CBAC to further bring 

MDI perspectives and issues to the table. During 2021, the FDIC also engaged in deeper 

relationships with mission-driven bank trade groups to facilitate effective implementation of 

some of the new resources becoming available to mission-driven banks. 

In November 2021, the FDIC created a new permanent organization, the Office of Minority 

and Community Development Banking, to support the agency’s ongoing strategic and direct 

engagement with MDIs and CDFIs. The new office will advise the Chairman and other senior 

leaders on FDIC activities that support mission-driven banks. It will also engage with these 

institutions to promote financial inclusion; encourage development and investments in LMI 

communities; and support FDIC-insured MDIs, CDFIs, and other financial institutions that 

serve LMI communities. The new office will, among other things, partner with government 

and private-sector organizations to build capacity in the mission-driven banking sector; 

expand FDIC research on mission-driven banks; develop strategies to encourage the creation 

of new MDIs and CDFIs; provide technical assistance that supports innovation and technology 

solutions for mission-driven banks; and promote partnerships between mission-driven banks, 

other financial institutions, and the private sector. 

PARTNERSHIPS 

In September 2021, the FDIC launched the Mission-Driven Bank Fund, a collaborative 

investment framework to drive capital investment and other funding to FDIC-insured MDIs and 

CDFIs that support LMI, minority, and rural communities. This new capital investment vehicle 

was designed to help these institutions build size, scale, and capacity, which, in turn, would 

allow them to: 

 Provide affordable financial products and services to individuals and businesses; 

 Stimulate economic and community development; and 

 Build opportunity and prosperity. 

The fund is a unique publicprivate partnership with the 

FDIC creating the design, 

mission orientation, and 

founding documents. As 

anchor investors, Microsoft 

and Truist Financial 

Corporation will lead the 

investment fund. In addition, 

Discovery, Inc. joined as 

a founding investor in the 

fund, bringing the combined 

initial commitment to $120 Launched by the FDIC. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
DIVERSITY AND INCLUSION 

million, with additional investments expected. An independent fund manager will be hired 

to underwrite investments and manage the fund, with oversight from an advisory council 

comprised of community and business leaders and other stakeholders. The FDIC will retain an 

advisory role to support the fund’s mission focus, but will not contribute capital to, manage, or 

be involved in the fund manager selection process or investment decisions of the fund. 

The FDIC also partnered with Treasury and the Community Development Financial Institutions 

Fund (CDFI Fund) to support new sources of funding made available to MDIs and CDFIs. 

For example, the FDIC developed a Capital Estimator Tool for mission-driven banks and a 

Regulatory Capital Guide. These offerings enabled mission-driven banks to approximate the 

impact of additional capital on regulatory capital ratios through various “what-if” scenarios 

and inform decisions on the types of capital they sought. The FDIC also co-sponsored an 

interagency webinar to demonstrate use of the tool and guide. In addition, the FDIC cosponsored a webinar with the CDFI Fund and MDI and CDFI trade groups to enable institutions 

to learn about the benefits of CDFI designation, especially given new grant funding for 

minority lending institutions. 

POLICIES 

In June 2021, the FDIC’s Board of Directors updated and strengthened its Statement of Policy 

Regarding Minority Depository Institutions. The revised policy includes updates responsive to 

the public notice-and-comment process conducted in the fourth quarter of 2020. The policy 

statement reflects the agency’s enduring commitment to fulfilling the five statutory goals to 

preserve and promote MDIs and outlines the framework for the MDI program across the FDIC. 

Key changes include emphasis on engagement with MDIs, enhanced technical assistance, and 

a description of how examiners apply examination standards to the unique business models 

of MDIs. 

In 2021, agency staff also developed training modules that will be launched in 2022 to train 

examiners and other staff supporting the MDI program. 

ADVOCACY 

It is important to promote the visibility of MDIs, to tell their stories, and showcase the 

important role they play in their communities. In 2021, the FDIC began planning a 2022 

relaunch of its initiative to record and publish videos of MDI executives sharing their 

institutions’ “origin stories,” highlighting the reasons their institutions were formed, and 

describing how they have served their communities over time. In addition, senior agency 

leaders emphasized the significance of mission-driven banks in numerous external speaking 

engagements and through posts on a number of FDIC social media channels and websites. 

OUTREACH, TECHNICAL ASSISTANCE, AND EDUCATION 

The FDIC co-sponsored the biennial interagency Minority Depository Institution and CDFI Bank 

Conference in September 2021, along with the OCC and Federal Reserve. The conference, 

Navigating the Economy with Resilience and Reinvention, featured the agency principals 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
DIVERSITY AND INCLUSION 

discussing their initiatives to support mission-driven banks, panels led by MDI and CDFI 

CEOs sharing their perspectives, and senior agency leaders discussing current supervisory 

and policy issues. The conference also highlighted key points for building business 

relationships with corporate America, MDIs, and CDFIs; sessions on economic inclusion, 

innovation, and fintech; and breakout sessions during which bankers could speak with their 

primary federal supervisor. 

During the year, the FDIC also continuously pursued efforts to improve communication 

and interaction with MDIs and to respond to the concerns of minority bankers. The agency 

maintains active outreach with MDI trade groups and offers to arrange annual meetings 

between FDIC regional management and each MDI’s Board of Directors to discuss issues of 

interest. The FDIC conducts an annual survey to obtain feedback from MDIs and to help assess 

the effectiveness of the MDI program. 

At the conclusion of each examination of an MDI supervised by the FDIC, the staff is available 

to return to the institution to provide technical assistance by reviewing areas of concern or 

topics of interest to the institution. The purpose of return visits is to assist management 

in understanding and implementing examination recommendations, not to identify new 

problems. 

Through its public website (www.fdic.gov), the FDIC invites inquiries and provides contact 

information for any MDI to request technical assistance at any time. 

In 2021, the FDIC provided 137 individual technical assistance sessions on approximately 

29 risk management, consumer compliance, and resolution topics, including: 

 Accounting, 

 Applications for branch openings and closures, 

 Bank Secrecy Act (BSA) and Anti-Money Laundering (AML), 

 Community Reinvestment Act (CRA), 

 Compliance management, 

 Corporate planning, 

 Current Expected Credit Losses (CECL) accounting methodology, 

 Funding and liquidity, 

 Information technology risk management and cybersecurity, 

 Internal audit, and 

 Loan modifications and Troubled Debt Restructuring. 

The FDIC also held outreach, training, and educational programs for MDIs through conference 

calls and regional banker roundtables. In 2021, topics of discussion for these sessions 

included many of those listed above, as well as strategic and management succession 

planning, FDIC economic inclusion initiatives, emerging risks and areas of concern, IT vendor 

management, and innovation and emerging technology. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
DIVERSITY AND INCLUSION 

EMERGENCY CAPITAL INVESTMENT PROGRAM 

The Emergency Capital Investment Program (ECIP) was established by Treasury pursuant 

to the Consolidated Appropriations Act, 2021. The Act authorizes Treasury to purchase 

up to $9 billion of preferred stock and other financial instruments from LMI community 

financial institutions determined by Treasury to be eligible for the investment. The ECIP is 

designed to promote lending, grants, and forbearance for small businesses, minority-owned 

businesses, and consumers, especially in low-income and underserved communities that 

may be disproportionately impacted by the economic effects of COVID-19, by making capital 

investments in operating MDIs and CDFIs. 

The Act requires Treasury to consult with the appropriate federal banking agency before 

making a capital investment pursuant to the ECIP. Accordingly, Treasury requested that the 

FDIC provide specific information for each FDIC-supervised institution that applied to Treasury 

for an ECIP investment or is a subsidiary of a bank holding company that applied for an ECIP 

investment. The FDIC provided information to Treasury for 79 institutions for which Treasury 

requested information. On December 14, 2021, Treasury announced the deployment of more 

than $8.7 billion in ECIP investments in 186 MDIs and CDFIs. 

On March 9, 2021, the FDIC issued a Financial Institution Letter to alert institutions to the 

availability of the ECIP and to provide sources of information to potential applicants. In 

addition, to facilitate the implementation of ECIP, the FDIC, along with the OCC and FRB, 

issued an interim final rule to revise applicable capital rules to provide that Treasury’s 

investments under the ECIP would qualify as regulatory capital for insured depository 

institutions (IDIs) and holding companies. 

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I 

MANAGEMENT’S 

DISCUSSION AND 

ANALYSIS 
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MANAGEMENT’S DISCUSSION AND ANALYSIS 

Overview 

During 2021, the FDIC continued to fulfill its mission-critical responsibilities, while addressing 

challenges related to the COVID-19 pandemic. In addition, the agency worked to further 

strengthen the banking system, modernize its approach to supervision, and increase 

transparency surrounding its programs. The FDIC also continued to engage in several 

community banking and community development initiatives. 

Cybersecurity remained a high priority for the FDIC in 2021; the agency worked to strengthen 

its infrastructure resiliency, manage information security risks, enhance data governance, 

and modernize information technology. This Annual Report highlights these and other 

accomplishments achieved during the year. 

Deposit Insurance 

As insurer of bank and savings association deposits, the FDIC must continually evaluate and 

effectively manage how changes in the economy, financial markets, and banking system affect 

the adequacy and the viability of the Deposit Insurance Fund (DIF). 

Long-Term Comprehensive Fund Management Plan 

In 2010, the FDIC developed a comprehensive, long-term DIF management plan to reduce the 

effects of cyclicality and achieve moderate, steady assessment rates throughout economic 

and credit cycles, while also maintaining a positive fund balance, even during a banking crisis. 

Under this plan, to increase the probability that the fund reserve ratio (the ratio of the fund 

balance to estimated insured deposits) would reach a level sufficient to withstand a future 

crisis, the FDIC Board set the Designated Reserve Ratio of the DIF at 2.0 percent. The FDIC 

views the 2.0 percent Designated Reserve Ratio as a long-term goal and the minimum level 

needed to withstand future crises of the magnitude of past crises. In December 2021, the 

Board voted to maintain the 2.0 percent ratio for 2022. 

Additionally, as part of the long-term DIF management plan, the FDIC suspended dividends 

indefinitely when the fund reserve ratio exceeds 1.5 percent. In lieu of dividends, the plan 

prescribes progressively lower assessment rates that will become effective when the reserve 

ratio exceeds 2.0 percent and 2.5 percent. 

State of the Deposit Insurance Fund 

The DIF balance continued to grow through 2021, as it has every quarter since the end of 2009, 

driven primarily by assessment revenue. Growth in the fund balance was offset by strong 

growth in insured deposits due to additional fiscal stimulus. The fund reserve ratio was 1.27 

percent at September 30, 2021, three basis points lower than the previous year. 

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Restoration Plan 

Extraordinary growth in insured deposits during the first and second quarters of 2020 

caused the DIF reserve ratio to decline below the statutory minimum of 1.35 percent as of 

June 30, 2020. In September 2020, the FDIC Board of Directors adopted a Restoration Plan 

to restore the reserve ratio to at least 1.35 percent within eight years, absent extraordinary 

circumstances, as required by the Federal Deposit Insurance (FDI) Act. The Restoration Plan 

requires the FDIC to update its analysis and projections for the DIF balance and reserve ratio at 

least semiannually. 

In 2021, insured deposit growth decelerated compared to the extraordinary growth 

experienced in the first half of 2020, but remained above average in the first quarter of 2021 

due to subsequent additional fiscal stimulus and continued elevated savings rates. During 

the second and third quarters of 2021, insured deposits grew in line with recent historical 

averages. In its June and December 2021 semiannual updates, the FDIC continued to project 

that the reserve ratio, while subject to uncertainty, would return to the statutory minimum 

level of 1.35 percent by September 30, 2028. 

Supervision 

Supervision and consumer protection are cornerstones of the FDIC’s efforts to ensure the 

stability of, and public confidence in, the nation’s financial system. The FDIC’s supervision 

program promotes the safety and soundness of FDIC-supervised financial institutions, 

protects consumers’ rights, and promotes community investment initiatives. 

EXAMINATION PROGRAM 

The FDIC’s bank examination efforts are at the core of its supervisory program. As of 

December 31, 2021, the FDIC was the primary federal regulator for 3,135 FDIC-insured, statechartered institutions that were not members of the Federal Reserve System (generally 

referred to as “state nonmember” institutions). Through risk management (safety and 

soundness), consumer compliance, CRA, and other specialty examinations, the FDIC assesses 

an institution’s operating condition, management practices and policies, and compliance with 

applicable laws and regulations. 

The table on the following page illustrates the number of examinations by type, conducted 

from 2019 through 2021. 

During the course of 2021, the FDIC conducted 1,268 statutorily required risk management 

examinations, and conducted all required follow-up examinations for FDIC-supervised 

problem institutions, within prescribed time frames. The FDIC also conducted 1,100 

statutorily required CRA/consumer compliance examinations (740 joint CRA/consumer 

compliance examinations, 358 consumer compliance-only examinations, and two CRA-only 

examinations). In addition, the FDIC performed 2,831 specialty examinations, including 

statutorily required reviews of compliance with Bank Secrecy Act (BSA) and Anti-Money 

Laundering (AML) requirements, within prescribed time frames. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

FDIC Examinations 

2021 2020 2019 

Risk Management (Safety and Soundness): 

State Nonmember Banks 1,139 1,219 1,310 

Savings Banks 129 125 148 

State Member Banks 0 0 0 

Savings Associations 0 0 0 

National Banks 0 1 0 

Subtotal Risk Management Examinations 1,268 1,345 1,458 

CRA/Consumer Compliance Examinations: 

Consumer Compliance/Community 

Reinvestment Act 740 805 933 

Consumer Compliance-only 358 221 210 

CRA-only 2 3 4 

Subtotal—CRA/Compliance Examinations 1,100 1,029 1,147 

Specialty Examinations: 

Trust Departments 275 308 313 

Information Technology and Operations 1,271 1,345 1,466 

Bank Secrecy Act 1,285 1,372 1,491 

Subtotal—Specialty Examinations 2,831 3,025 3,270 

TOTAL 5,199 5,399 5,875 

Risk Management 

All risk management examinations have been conducted in accordance with statutorily 

established time frames. As of September 30, 2021, 46 insured institutions with total assets 

of $50.6 billion were designated as problem institutions (i.e., institutions with a composite 

CAMELS1

 rating of 4 or 5) for safety and soundness purposes. By comparison, on September 

30, 2020, there were 56 problem institutions with total assets of $53.9 billion. This represents 

an 18 percent decrease in the number of problem institutions and a 6 percent decline in 

problem institution assets. 

For the 12 months ended September 30, 2021, 19 institutions with aggregate assets of $2.6 

billion were removed from the list of problem financial institutions, while 9 institutions 

with aggregate assets of $1.7 billion were added to the list. The FDIC is the primary federal 

regulator for 27 of the 46 problem institutions, with total assets of $3.5 billion. 

1

 The CAMELS composite rating represents an institution’s adequacy of Capital, quality of Assets, capability of 

Management, quality and level of Earnings, adequacy of Liquidity, and Sensitivity to market risk, and ranges from 

“1” (strongest) to “5” (weakest). 

FEDERAL DEPOSIT INSURANCE CORPORATION 
MANAGEMENT’S DISCUSSION AND ANALYSIS 

In 2021, the FDIC’s Division of Risk Management Supervision (RMS) initiated 78 formal 

enforcement actions and 60 informal enforcement actions.® Enforcement actions against 

institutions included, but were not limited®to, seven actions under Section 8(b) of the FDI 

Act, one of which was a notice of charges, and 60 memoranda of understanding (MOUs). No 

civil money penalties or Section 39 Compliance Plans were issued. Of these enforcement 

actions against institutions, 13 MOUs were based, in whole or in part, on apparent violations 

of BSA/AML laws and regulations. In addition, enforcement actions were also initiated against 

individuals. These actions included, but were not limited to, 25 removal and prohibition 

actions under Section 8(e) of the FDI Act (21 consent orders and four notices of intention to 

remove/prohibit), one action under Section 8(b) of the FDI Act, and 12 civil money penalties 

(CMPs) (eight orders to pay and four notices of assessment). 

The FDIC continues its risk-focused, forward-looking supervision program by assessing risk 

management practices during the examination process to address risks before they lead to 

financial deterioration. Examiners make supervisory recommendations, including Matters 

Requiring Board Attention (MRBA), in Reports of Examination to address these risks. RMS met 

its goal of following up on at least 90 percent of MRBAs within six months of transmittal of the 

Report of Examination. In addition, RMS implemented a new tracking system to gather more 

information about the subject of MRBAs, which will aid supervisory planning going forward. 

During the COVID-19 pandemic, the FDIC adapted existing processes for virtual operations 

and created new processes and capabilities to address emerging needs. The agency is 

currently identifying and further promoting efficient and cost-effective business processes 

by documenting lessons learned and best practices from virtual examinations, as well as 

internal processes adapted to complete and process work, train and manage personnel, and 

communicate effectively across all levels remotely. These review activities include both an 

internal project to gather feedback from FDIC personnel and a Request for Information (RFI) 

that obtained information and comments from financial institutions for which the FDIC is the 

primary federal regulator. 

EXAMINATION PROGRAMS 

Well-managed banks engaged in traditional, non-complex activities receive periodic, point-intime safety and soundness and consumer protection examinations that are carried out over 

a few weeks, while the very largest FDIC-supervised institutions (generally, those with total 

assets of $10 billion or greater) are subject to continuous safety-and-soundness supervision 

and ongoing examination carried out through targeted reviews during the course of an 

examination cycle. 

Point-in-Time Examinations 

Approximately 98 percent of all FDIC-supervised institutions are examined under the pointin-time examination program. Risk management point-in-time examinations are conducted 

every 12 to 18 months, generally on an alternating basis with the appropriate State banking 

department. Prior to the pandemic, point-in-time examinations began with the examinerin-charge conducting an examination planning process on an off-site basis, followed by an 

on-site component with the examination team traveling to the institution and engaging 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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with bank management. Examiners then completed their work off-site and submitted their 

findings to their Regional Office case manager for review, finalization, and presentation to 

institution management. Since March 16, 2020, nearly all examination activity has occurred 

off-site. The FDIC is planning for a resumption of regular on-site examination activity as health 

conditions allow. It sought feedback during the year from financial institution management 

and examiners about lessons learned from off-site work that could be leveraged going forward 

to allow examiners to conduct a greater amount of examination activity off-site than the prepandemic period. 

Continuous Examination Programs 

Risk management continuous examinations are conducted throughout an annual examination 

cycle by a dedicated team of examiners working jointly with the appropriate State banking 

department. The examination team produces examination findings throughout the cycle 

after the completion of various targeted reviews of specific risk areas and a roll-up report of 

examination at the end of the annual examination cycle. Prior to the pandemic, dedicated 

examination teams typically worked on-site at the financial institution while conducting 

targeted reviews and off-site while reviewing materials or conducting ongoing supervision. As 

with the point-in-time examination program, dedicated examination teams have completed 

nearly all continuous examinations off-site since March 16, 2020. The FDIC is planning for a 

resumption of on-site examination activity as health conditions allow. 

The number of institutions subject to continuous examinations has grown over the past few 

years as a result of both organic growth and merger-related activity. Given changes in industry 

structure and the number of large institutions supervised, RMS conducted a holistic review of 

its continuous examination program during 2021, focusing on thresholds, staffing, knowledge 

transfer, and supervisory planning. RMS will implement changes to the program over the 

course of 2022 based on this review. 

Off-Site Monitoring 

The FDIC utilizes off-site monitoring programs to supplement and guide the examination 

process. Off-site monitoring programs can provide an early indication that an institution’s 

risk profile may be changing. The FDIC has developed a number of off-site monitoring tools 

using key data from institutions’ quarterly Reports of Condition and Income, or Call Reports, 

to identify institutions that are experiencing rapid loan growth or reporting unusual levels 

or trends in problem loans, investment activities, funding strategies, earnings structure, or 

capital levels that merit further review. 

Off-site monitoring for banks with total assets greater than $10 billion includes the quarterly 

Large Insured Depository Institution (LIDI) program, which remains the primary instrument 

for off-site monitoring of the largest institutions supervised by the FDIC. The LIDI Program 

provides a comprehensive process to standardize data capture and reporting for large and 

complex institutions nationwide, allowing for quantitative and qualitative risk analysis. 

The LIDI Program focuses on institutions’ potential vulnerabilities to asset, funding, and 

operational stresses, and supports effective large bank supervision by using individual 

institution information to focus resources on higher-risk areas, determine the need for 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

supervisory action, and support insurance assessments and resolution planning. In 2021, the 

LIDI Program covered 113 institutions with total assets of $4.2 trillion. 

Shared National Credit Program In 2021, the 

The Shared National Credit (SNC) Program is an 

interagency initiative administered jointly by the FDIC, LIDI Program

OCC, and FRB to promote consistency in the regulatory covered 113 review of large, syndicated credits, as well as to identify 

risk in this market, which comprises a large volume of institutions 

domestic commercial lending. In 2021, outstanding with total credit commitments in the SNC Program totaled more 

than $5 trillion. The FDIC, OCC, and FRB report the results assets of 

of their review in an annual joint public statement. $4.2 trillion. 

Business Process Modernization 

RMS is also engaged in a business process modernization initiative to move its technology 

systems from an applications-based environment to a human-centered, business-process 

environment. This effort will reduce the amount of manual data entry surrounding 

supervisory activities and will also allow RMS to expand its use of machine learning 

(ML) technology to identify emerging trends from examination activities, among other

improvements. 

Consumer Compliance 

As of December 31, 2021, 26 insured state nonmember institutions (collectively, with 

total assets of $25 billion), about one percent of all supervised institutions, were problem 

institutions for consumer compliance, CRA, or both. All of the problem institutions for 

consumer compliance were rated “4” for consumer compliance purposes, with none rated 

“5”. For CRA purposes, the majority were rated “Needs to Improve”; only one was rated 

“Substantial Noncompliance”. As of December 31, 2021, all follow-up examinations for 

problem institutions were performed on schedule. 

As of December 31, 2021, the FDIC’s Division of Depositor and Consumer Protection 

(DCP) conducted and substantially achieved all required consumer compliance and 

CRA examinations and, when violations were identified, completed follow-up visits and 

implemented appropriate enforcement actions in accordance with FDIC policy. In completing 

these activities, DCP achieved its internally established time standards for the issuance of final 

examination reports and enforcement actions. 

As of December 31, 2021, DCP initiated 21 formal enforcement actions and 24 informal 

enforcement actions, such as Board Resolutions and Memoranda of Understanding, to 

address consumer compliance examination findings. This included two consent orders to 

strengthen consumer compliance management systems, and 18 CMPs. The CMPs were issued 

against institutions to address violations of the Flood Disaster Protection Act and Section 5 

of the Federal Trade Commission Act for Unfair or Deceptive Acts or Practices. CMPs totaled 

approximately $2.7 million. In addition to the consumer refunds resulting from the assistance 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

provided by the FDIC’s Consumer Response Unit (see discussion under the Consumer 

Complaints and Inquiries section), consumer compliance examination findings resulted 

in banks making voluntary restitution of approximately $3.2 million to 28,936 consumers 

and Truth in Lending Act reimbursements of approximately $575,000 to more than 

5,510 consumers. 

In terms of its examination function, DCP leveraged technology as FDIC deftly ventured 

into fully offsite examinations to ensure it conducted all planned examinations in a timely 

and effective manner.® In addition, DCP developed and implemented a targeted CARES 

Act assessment for FDIC-supervised institutions that have the most significant mortgage 

servicing portfolios.® These were diagnostic in approach and took into account a bank’s good 

faith efforts designed to support consumers and comply with consumer protection laws 

and regulations. The overall purpose of this targeted assessment was to provide financial 

institutions the opportunity to share their challenges, issues, and concerns related to the 

COVID-19 pandemic and the CARES Act; and to determine the extent to which financial 

institutions effectively implemented relevant CARES Act provisions. No significant issues 

were identified through these assessments. 

Pilot Complex Bank Supervision Program 

In 2021, the FDIC developed a pilot Complex Bank Supervision Program to ensure that 

enhanced supervision is provided to institutions with higher compliance risk. The program 

consists of a three-tiered, progressive supervisory approach based on an institution’s risk 

profile and includes elements such as ongoing monitoring, risk assessments, supervisory 

plans, targeted reviews, and dedicated staff. For each tier, examiners create a supervisory 

strategy tailored to the institution that recognizes the unique characteristics of the 

business model and product offerings. In addition, the program provides institutions with 

access to a designated point of contact or examiner in charge who responds to regulatory 

questions, provides feedback, and clarifies guidance, and works collaboratively with bank 

management to identify potential risks earlier than point-in-time examinations and provides 

recommendations for appropriate action. 

Specialty Examinations 

Trust/Registered Transfer Agent/Municipal Securities Dealer/Government Securities Dealer 

The FDIC examines trust, registered transfer agent (RTA), municipal securities dealer (MSD), 

and government securities dealer (GSD) risk management practices at institutions that engage 

in these activities. As of December 31, 2021, the FDIC performed 266 trust, seven RTA, one 

MSD, and one GSD examinations. Of the 266 trust examinations, 26 were related to entities in 

the continuous examination program. 

Examiners assign a trust rating using the FFIEC Uniform Trust Interagency Rating System. 

The five trust component ratings, or MOECA, are comprised of the following components: 

management (M); operations, internal controls, and audit (O); earnings (E); compliance (C); and 

asset management (A). An overall trust composite rating is also assigned based on a careful 

evaluation of the institution’s fiduciary activities. While earnings performance is evaluated at 

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each institution, the specific earnings component rating is only assigned for institutions that 

have total trust assets of more than $100 million at the time of the examination or at a nondeposit trust company. The trust rating is considered in the assignment of the management 

component of the CAMELS rating, in accordance with the FFIEC Uniform Financial Institutions 

Rating System. 

In an effort to provide ongoing information about trust evaluations, FDIC staff periodically 

participate in fiduciary-related industry conferences. These meetings allow industry and 

regulatory participants to share information regarding current fiduciary hot topics and 

proposals and serve as a forum for discussion of trust-related topics and participant-posed 

questions. In 2021, however, many of these events were canceled due to ongoing pandemic 

restrictions. 

Where applicable, FDIC examiners also conduct RTA, MSD, and GSD examinations using 

established work programs. The results of these examination activities are incorporated into 

the report of examination and considered in assigning the management component of the 

CAMELS rating, in accordance with the FFIEC Uniform Financial Institutions Rating System. 

Information Technology and Cybersecurity 

The FDIC examines information technology (IT) risk management practices, including 

cybersecurity, at each bank it supervises as part of the risk management examination. 

Examiners assign an IT rating using the FFIEC Uniform Rating System for Information 

Technology. The IT rating is incorporated into the management component of the CAMELS 

rating, in accordance with the FFIEC Uniform Financial Institutions Rating System. 

During 2021, the FDIC conducted 1,271 IT examinations at state nonmember institutions and 

issued one enforcement action. 

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

addition to routine examination procedures, in 2021, the FDIC, FRB, and OCC horizontally 

reviewed a sample of service providers’ controls to defend against advanced cyber threats. 

Cybersecurity is included in the scope of every service provider examination. The FDIC, FRB, 

and OCC use the Cybersecurity Examination Procedures, developed by the agencies, to ensure 

consistent evaluation of this risk. 

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

cybersecurity threats and other operational risk issues. The information obtained from these 

engagements is shared with financial institutions and examiners, when appropriate. FDIC 

staff meet regularly with the Financial and Banking Information Infrastructure Committee, 

the Financial Services Sector Coordinating Council for Critical Infrastructure Protection, the 

Department of Homeland Security, the Financial Services Information Sharing and Analysis 

Center, other regulatory agencies, and law enforcement to share information regarding 

emerging issues and to coordinate responses. For example, in 2021, the FDIC sent financial 

institutions alerts relating to the Solarwinds, Microsoft Exchange, Apache Log4J, and other 

vulnerabilities. 

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On October 20, 2021, the FFIEC presented an examiner webinar on the FFIEC IT Handbook 

Architecture, Infrastructure, and Operations (AIO) booklet that provided an overview of the 

changes and content of the new booklet. The booklet provides expanded guidance to 

help financial institution examiners assess the risk profile and adequacy of an entity’s IT 

architecture, infrastructure, and operations, and provides examiners with fundamental 

examination expectations regarding architecture and infrastructure planning, governance 

and risk management, and operations of regulated entities. On November 3, 2021, the FFIEC 

followed up with an industry outreach webinar on the FFIEC IT Handbook AIO booklet. FDIC 

staff presented at the event. The webinars are recorded and available on the FFIEC website. 

In August, the FFIEC published new FFIEC Guidance on Authentication and Access to Financial 

Institution Services and Systems, which sets forth examples of risk management principles 

and practices for effective authentication of financial institutions’ customers, employees, 

and other users. On August 3, 2021, as part of the FFIEC IT Conference, the FFIEC delivered 

a presentation to examiners regarding the background and key provisions of the new 

Authentication Guidance. On November 3, 2021, the FFIEC presented an industry outreach 

webinar that reviewed the new Authentication Guidance. FDIC staff presented at both events. 

The IT Conference presentation and the industry outreach webinar are recorded and are also 

available on the FFIEC website. 

Bank Secrecy Act/Anti-Money Laundering 

The FDIC examines institutions’ compliance with BSA/AML requirements as part of each 

risk management examination. The FDIC also examines for BSA/AML compliance during 

examinations conducted by state banking authorities if the state lacks the authority or 

resources to conduct the examination. In total, during 2021, the FDIC conducted 1,285 BSA/ 

AML examinations. 

Throughout 2021, the FDIC, FRB, OCC, National Credit Union Administration (NCUA), and 

Treasury, including the Financial Crimes Enforcement Network (FinCEN) (collectively, the AML 

Agencies), continued to focus on improving the efficiency and effectiveness of the BSA/AML 

regime. The Anti-Money Laundering (AML) Act of 2020, which Congress passed on January 1, 

2021, also contained many requirements with similar goals, and these requirements are also 

being addressed by the AML Agencies. 

The goals of the AML Act are to: 

 Improve coordination and information sharing among the agencies tasked with 

administering and examining AML and countering the financing of terrorism (CFT) 

requirements, federal law enforcement agencies, national security agencies, the 

intelligence community, and financial institutions; 

 Modernize AML/CFT laws to adapt the government and private sector response to 

new and emerging threats; 

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 Encourage technological innovation and the adoption of new technology by 

financial institutions to counter money laundering and the financing of terrorism 

more effectively; 

 Reinforce that the AML/CFT policies, procedures, and controls of financial 

institutions must be risk-based; 

 Establish uniform beneficial ownership information reporting requirements; and 

 Establish a secure, nonpublic database at FinCEN for beneficial ownership 

information. 

Time-sensitive sections of the Act require the establishment of National AML/CFT priorities, 

the promulgation of regulations to carry out those priorities, and the promulgation of 

beneficial ownership information reporting requirements. 

In June 2021, FinCEN formally established AML/CFT Priorities in an effort to help all covered 

institutions meet their obligations under laws and regulations designed to combat money 

laundering and counter terrorist financing. Specifically, FinCEN established the following 

AML/CFT Priorities: 

 Corruption; 

 Cybercrime, including relevant cybersecurity and virtual currency considerations; 

 Foreign and domestic terrorist financing; 

 Fraud; 

 Transnational criminal organization activity; 

 Drug trafficking organization activity; 

 Human trafficking and human smuggling; and 

 Proliferation financing (the risk of raising, moving, or making available funds, 

other assets or economic resources, or financing, in whole or in part, to persons or 

entities for purposes of weapons of mass destruction proliferation, including the 

proliferation of their means of delivery or related material (including both dualuse technologies and dual-use goods for non-legitimate purposes)). 

Once FinCEN promulgates a revised program rule, the FDIC and the other federal banking 

agencies plan to amend their BSA/AML compliance program rules to conform with changes to 

FinCEN’s bank program rule. 

In June 2021, the FDIC, the other federal banking agencies, and the state bank and credit 

union regulators issued a statement to confirm that examiners will not examine banks for the 

incorporation of the AML/CFT Priorities into their risk-based BSA/AML compliance programs 

until the effective date of final revised regulations. 

Separately, the FFIEC continued to update the BSA/AML Examination Manual in 2021. In 

February, updates were published to sections regarding BSA/AML regulatory requirements, 

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the Customer Identification Program requirements, currency transaction reporting, and 

transactions of exempt persons.

2

 In June, updates were published to sections related to 

the purchase and sale of monetary instruments recordkeeping, special measures, reports 

of foreign financial accounts, and international transportation of currency or monetary 

instruments reporting. In November, updates to four additional sections were released, 

including an introduction to customer risk, independent automated teller machine owners 

and operators, politically exposed persons, and charities and non-profit organizations. 

The FFIEC expects to release additional updates in 2022. Revised sections of the manual 

reinforce instructions to examiners regarding depository institutions’ reasonably designed 

policies, procedures, and processes to meet BSA/AML requirements and safeguard institutions 

from money laundering, terrorist financing, and other illicit financial activity. The manual 

emphasizes that examiners should tailor the BSA/AML examination scope and planned 

procedures consistent with the depository institution’s money laundering and terrorist 

financing risk profile. 

Cyber Fraud and Financial Crimes 

The FDIC has undertaken a number of initiatives in 2021 to protect the banking industry from 

criminal financial activities.® These include hosting, with the Department of Justice, a virtual 

financial crimes-focused conference in May for examiners, lawyers, and others from federal 

banking agencies and law enforcement; helping financial institutions identify and shut down 

“phishing” websites that attempt to fraudulently obtain an individual’s confidential personal 

or financial information; and publishing a Consumer News article that offers tips consumers 

can use to protect themselves from ransomware and imposter scams. 

EXAMINER TRAINING AND DEVELOPMENT 

In 2021, the FDIC continued to emphasize the importance of delivering timely and effective 

examiner training programs. While on-the-job training remained the most significant portion 

of developmental activities, the historical mix of classroom, virtual instructor-led, and 

asynchronous (such as computer-based) training was modified in 2020 in response to the 

pandemic. Throughout 2021, the FDIC continued to use this modified mix, and RMS and DCP, 

in partnership with the FDIC’s Corporate University, virtually delivered all pre-commissioned 

examiner core training. 

All training and development activities are overseen by senior and mid-level management 

to ensure that FDIC staff and state regulatory partners receive training that is effective, 

appropriate, and current. The FDIC works in collaboration with partners across the 

organization and at the FFIEC to ensure emerging risks and topics are incorporated and 

2

 A bank must electronically file a Currency Transaction Report (CTR) for each transaction in currency (deposit, 

withdrawal, exchange of currency, or other payment or transfer) of more than $10,000 by, through, or to the bank. 

However, banks may exempt certain types of customers from currency transaction reporting. Pursuant to the 

Money Laundering Suppression Act of 1994, FinCEN established a process for banks to designate certain customers 

(referred to as Phase I and Phase II exempt persons) as exempt from the requirement to report currency transactions 

and exempt certain types of customers from currency transaction reporting. 

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conveyed. Training and development activities are targeted for all levels of examination staff. 

FDIC courses are mostly developed internally and delivered by a tenured and knowledgeable 

examiner instructor pool, in recognition of the essential role that peer-to-peer knowledge 

transfer plays in skills enhancement and the preservation of institutional knowledge. 

IMPROVEMENTS TO REGULATORY FRAMEWORK 

The FDIC finalized a number of key rulemakings in 2021, and initiated others, to improve the 

regulatory framework applicable to insured banks. 

Final Rulemaking on Guidance 

On March 2, 2021, the FDIC, FRB, OCC, Consumer Financial Protection Bureau (CFPB), and 

NCUA issued a final rule describing the agencies’ use of supervisory guidance and codifying 

a 2018 statement, as amended, that, among other things, clarified the differences between 

regulations and guidance. The codified statement includes provisions stating that supervisory 

guidance does not create binding, enforceable legal obligations; stating that the agencies do 

not issue supervisory criticisms (which includes, in the FDIC’s case, matters requiring board 

attention) for “violations” of or “non-compliance” with supervisory guidance; and describing 

the appropriate use of supervisory guidance. The FDIC finalized the proposal on January 19, 

2021, codified as 12 CFR Part 302, and published in the Federal Register on March 2, 2021. 

Final Guidelines on Appeals of Material Supervisory Determinations 

On January 25, 2021, the FDIC finalized a proposal to establish a new Office of Supervisory 

Appeals to independently consider and decide appeals of material supervisory determinations 

made by examiners. The new appeals process is intended to help promote consistency among 

examiners across the country, ensure accountability at the agency, and ultimately, help 

maintain stability and public confidence in the nation’s financial system.® 

On December 6, 2021, the FDIC’s new Office of Supervisory Appeals became fully operational. 

The Office is fully independent of the Divisions that have authority to issue supervisory 

determinations and is staffed with individuals who have bank supervisory or examination 

experience (e.g., retired bank examiners).® These individuals are FDIC employees whose sole 

function is hearing appeals, ensuring they have the time and capacity for the proper attention 

and diligence. 

The FDIC continues to encourage institutions to make good-faith efforts to resolve 

disagreements with examiners and/or the appropriate Regional Office. If these efforts are not 

successful, the institution can submit a request for review to the appropriate Division Director. 

Upon receiving a request for review, the Division Director will have the option of issuing a 

written decision or sending the appeal directly to the Office of Supervisory Appeals. If the 

Division Director issues a decision, institutions that disagree with the decision can appeal to 

the Office. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

Proposed Rulemaking on Offering Circulars of State Nonmember Banks 

and Savings Associations 

On February 4, 2021, the FDIC proposed a rulemaking to rescind and remove Securities 

Offerings rules, which were transferred to the FDIC from the Office of Thrift Supervision (OTS) 

in July 2011, in connection with the implementation of Title III of the Dodd-Frank Wall Street 

Reform and Consumer Protection Act. The FDIC also proposed to rescind its Statement of 

Policy Regarding the Use of Offering Circulars in Connection with the Public Distribution of Bank 

Securities, which provides a guide for State nonmember banks and other institutions in the 

preparation of offering circulars. 

At the same time, the FDIC proposed a new regulation regarding securities disclosures 

to be made by State nonmember banks and State savings associations (FDIC-supervised 

institutions). In so doing, the FDIC would create a unified framework for securities disclosure 

requirements applicable to FDIC-supervised institutions. The proposal also included technical 

amendments to update related regulations to remove rules pertaining to securities offerings 

for state savings associations and to rescind definitions for regulations affecting state savings 

associations that have been removed. 

Upon finalization of these rulemakings, state savings associations would be subject to the 

same set of federal regulations as state nonmember banks. The regulation will replace the 

1996 policy statement on the use of offering circulars and certain OTS regulations that are 

part of the FDIC regulations. No comment letters were received in response to this proposed 

rulemaking, and a final rule is planned for issuance in 2022. 

Proposed Rule on Tax Allocation Agreements 

On May 10, 2021, the FDIC, OCC, and FRB issued a notice of proposed rulemaking that 

would set forth standards for tax allocation agreements (Tax Allocation NPR) applicable to 

institutions in a consolidated tax filing group. The Tax Allocation NPR is consistent with the 

agencies’ existing interagency policy statement guidance, including the 1998 Interagency 

Policy Statement on Income Tax Allocation and the 2014 Addendum to the Interagency Policy 

Statement on Income Tax Allocation in a Holding Company Structure. It also includes additional 

elements that would further enhance the preservation of an IDI’s ownership rights in, and 

timely receipt of, tax refunds and equitable allocation of tax liabilities within a holding 

company structure. 

The agencies proposed that these guidelines be included in, and would be rendered 

enforceable as, an appendix to the agencies’ standards for safety and soundness that 

implements Section 39 of the Federal Deposit Insurance Act or Appendix A to FDIC’s Part 364— 

Interagency Guidelines Establishing Standards for Safety and Soundness. If adopted as final 

by the agencies, these guidelines would replace the prior guidelines from 1998 and 2014. The 

agencies are reviewing comment letters received in response to the proposed rulemaking with 

a final rule planned for issuance in 2022. 

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Proposed Rulemaking to Permit Additional Exemptions to Suspicious 

Activity Report Requirements 

On January 22, 2021, the FDIC published in the Federal Register a proposed rulemaking that 

would amend its Suspicious Activity Report (SAR) regulation to permit the FDIC to issue 

additional, case-by-case exemptions from SAR filing requirements to FDIC-supervised 

institutions. While the FDIC’s current SAR regulation allows exemptions from SAR filing 

requirements for physical crimes (robberies and burglaries) and lost, missing, counterfeit, or 

stolen securities, the proposed rule would allow the FDIC, in conjunction with the Financial 

Crimes Enforcement Network, to grant exemptions to FDIC-supervised institutions that 

develop innovative solutions to otherwise meet anti-money laundering requirements more 

efficiently and effectively. The FDIC proposed this rule as a proactive measure to address the 

likelihood that FDIC-supervised institutions will leverage existing or future technologies to 

report, share, or disclose suspicious activity in a different manner. 

The FRB, NCUA, and OCC issued similar but independent proposed rulemakings to amend 

their respective SAR regulations to permit those agencies to issue additional, case-by-case 

exemptions from SAR filing requirements to their supervised financial institutions. The FDIC 

is working with the other federal banking agencies to harmonize the language of the final 

rules for consistency and, if possible, the publication timing. A final rule is planned for 

issuance in 2022. 

Final Rule Amending Real Estate Lending Standards 

In October 2021, after considering public comments, the FDIC approved a final rule to amend 

the Interagency Guidelines for Real Estate Lending Policies. The final rule incorporated 

consideration of the capital framework established in the community bank leverage ratio 

(CBLR) rule into the method for calculating the ratio of loans in excess of the supervisory loanto-value limits (LTV Limits). The CBLR rule does not require electing institutions to calculate 

tier 2 capital or total capital. Therefore, this amendment provides a consistent approach for 

calculating the ratio of loans in excess of the supervisory LTV Limits at all FDIC-supervised 

institutions without requiring the computation of total capital. The final rule calls for 

calculating the ratio of loans in excess of the supervisory LTV Limits using tier 1 capital plus the 

appropriate allowance for credit losses in the denominator. 

Interagency Statement on Issuance of National AML/CFT Priorities 

As previously discussed, in June 2021, the FDIC, the other federal banking agencies, and 

State bank and credit union regulators issued an Interagency Statement on the Issuance of 

the AML/CFT National Priorities. This statement provides clarity for banks on the AML/CFT 

Priorities. The publication of the AML/CFT Priorities did not create an immediate change 

to BSA/AML requirements or supervisory expectations for banks. The AML Act requires the 

establishment of the AML/CFT Priorities and the promulgation of regulations regarding the 

AML/CFT Priorities. The FDIC and other federal banking agencies plan to revise the BSA/AML 

compliance program rule with conforming changes once FinCEN issues its bank program rule. 

The statement noted that banks are not required to incorporate the AML/CFT Priorities into 

their risk-based BSA/AML compliance programs until the effective date of the final revised 

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FINCEN regulations. Nevertheless, banks could consider how they plan to incorporate the 

AML/CFT Priorities into their risk-based BSA/AML compliance programs by assessing the 

potential related risks associated with the products and services offered, the customers 

served, and the geographic areas in which banks operate. 

The AML Act requires that banks incorporate the AML/CFT Priorities, as appropriate, into 

their risk-based BSA/AML compliance programs and that the banking agencies include 

those priorities as a measure by which a bank is supervised and examined. The interagency 

statement clarifies that the FDIC, other federal banking agencies, and State bank and credit 

union regulators will not examine banks for the incorporation of the AML/CFT Priorities 

into depository institutions’ risk-based BSA/AML compliance programs until the effective 

date of final revised regulations. In addition, the FDIC and other agencies are committed 

to working with FinCEN to develop any corresponding guidance and examination procedures 

for examiners. 

Computer-Security Incident Notification Rule 

In November 2021, the federal banking agencies issued a joint final rule to improve the sharing 

of information about cyber incidents that may affect the U.S. banking system. The final 

rule requires a banking organization to notify its primary federal regulator of any significant 

computer-security incident as soon as possible and no later than 36 hours after the banking 

organization determines that a cyber incident has occurred. Notification is required for 

incidents that have materially affected—or are reasonably likely to materially affect—the 

viability of a banking organization’s operations, its ability to deliver banking products and 

services, or the stability of the financial sector. 

In addition, the final rule requires a bank service provider to notify affected banking 

organization customers as soon as possible when the provider determines that it has 

experienced a computer-security incident that has materially affected or is reasonably likely to 

materially affect banking organization customers for four or more hours. 

Compliance with the final rule is required by May 1, 2022. 

Final Basel III Standards 

The FDIC continues to work with the other federal banking agencies to develop a proposed 

rulemaking that would seek comment on the implementation of the revised Basel III standards 

in the U.S. and expects to issue the proposed rulemaking in 2022. 

The final Basel III standards to be implemented in the U.S. for the largest and most complex 

institutions would address concerns regarding excessive variability in the measurement of 

risk-weighted assets across large internationally active banking institutions. 

The revisions are designed to reduce risk-weighted asset variability by enhancing the 

robustness and risk sensitivity of the standardized approach for credit risk and operational 

risk and constraining the use of internal models. In addition, the Basel III revisions will 

enhance the market risk framework by introducing a clearer boundary between the trading 

book and the banking book, an internal models approach that relies upon the use of expected 

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shortfall models, separate capital requirements for risk factors that cannot be modeled, and a 

risk-sensitive standardized approach that is designed and calibrated to be a credible fallback 

to the internal models approach. 

Office of Thrift Supervision Regulations 

Throughout 2021, the FDIC continued to streamline FDIC regulations and eliminate 

unnecessary and duplicative regulations applicable to state savings associations in order 

to improve the public’s understanding of the rules, to improve the ease of reference, and to 

promote parity between state savings associations and state nonmember banks. 

The FDIC removed rules transferred from the OTS relating to application processing 

procedures, non-discrimination requirements, requirements for subordinate organizations, 

and directives to take prompt corrective action, and made conforming amendments to its 

existing regulations to reference state savings associations as appropriate. 

The FDIC proposed to remove and rescind two remaining rules that were transferred from the 

OTS entitled Definitions for Regulations Affecting All-State Savings Associations and Securities 

Offerings. At the same time, as described more fully above, the FDIC proposed new rules 

regarding securities disclosures to be made by all covered FDIC-supervised institutions, while 

rescinding the Statement of Policy Regarding the Use of Offering Circulars in Connection with 

the Public Distribution of Bank Securities, which provides guidance to State nonmember banks. 

Upon removal of these transferred regulations, all FDIC-supervised institutions would be 

subject to the same set of regulations. 

Brokered Deposits 

At its December 2020 meeting, the FDIC Board of Directors approved a final rule that makes 

significant revisions to the brokered deposit rules applicable to financial institutions that 

are less than well-capitalized. The final rule represents the first meaningful update to the 

brokered deposit regulations since the rules were first put in place approximately 30 years 

ago. The new framework reflects the dramatic changes in technology, law, business models, 

and financial products over that time period. 

The final rule creates a more transparent and consistent regulatory approach by establishing 

bright line tests for the “facilitation” component of the deposit broker definition and a formal 

process for the application of the primary purpose exception. The final rule is intended to 

encourage innovation in how banks offer services and products to customers by reducing 

obstacles to certain types of relationships.® It continues to protect the Deposit Insurance Fund 

by ensuring that certain types of funding, including the specific types of deposits Section 29 of 

the FDIC Act was intended to address, continue to be treated as brokered deposits. The final 

rule became effective April 1, 2021. 

The FDIC has implemented a number of steps to explain the revised rules. In March 2021, the 

FDIC held a webinar to discuss the changes and the new notice and application procedures 

for certain primary purpose exceptions and launched a new Brokered Deposit webpage as 

part of the FDIC’s online Banker Resource Center. The webpage includes links to Section 29 

(Brokered Deposits) of the Federal Deposit Insurance Act, Sections 337.6 and 337.7 of the FDIC 

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Rules and Regulations containing the brokered deposit and interest rate restrictions, and the 

Final Rule as published in the Federal Register (including the Preamble to the Final Rule, that 

provides detailed explanations of the rule changes), complete instructions for filing notices 

and applications, a secure email process for submitting filings, a list of entities that have filed 

primary purpose exception notices, and a Questions & Answers page. 

SUPERVISION POLICY 

The goal of the FDIC’s supervision policy is to provide clear, consistent, meaningful, and timely 

information to financial institutions and examiners. 

Risk Management Manual of Examination Policies 

In February 2021, the FDIC updated the Risk Management Manual of Examination Policies to 

provide instructions for tracking and following up on State-issued Matters Requiring Board 

Attention. In addition, various updates were made to enhance certain controls to mitigate the 

risk of regulatory capture, expand the discussions on dominant official and key person risks, 

and provide other updates related to strategic planning and selecting and retaining competent 

management. 

Heightened Monitoring Programs 

Economic recovery from the pandemic-driven recession was uneven across industry sectors 

in 2021. The FDIC continued to operate programs developed as the pandemic unfolded to 

provide a greater line of sight into financial institutions with exposure to impacted industries 

including, but not limited to, restaurants, retail, entertainment, travel and tourism, and 

commercial real estate. 

Heightened monitoring programs have allowed examination staff to engage with management 

at exposed institutions to learn how the unprecedented nature of the pandemic has affected 

operations, assess the overall direction and level of risk in these institutions, and determine 

appropriate follow-up plans and strategies for each institution. In addition, the plans have 

helped the FDIC identify and monitor emerging pandemic-related risks across the industry 

that may require changes in supervisory approaches or policies. 

CAPITAL MARKETS AND ACCOUNTING POLICY 

London Inter-Bank Offered Rate (LIBOR) Transition 

Throughout 2021, the FDIC, in coordination with fellow regulators, participated in industry 

outreach and monitored community and regional bank readiness for the transition from 

LIBOR to alternative reference rates. FDIC monitoring includes interdisciplinary supervision 

coordination by risk management, capital markets, policy, technology, and consumer 

compliance to conduct banker outreach and communication to stay abreast of the latest 

LIBOR transition developments. The FDIC gathers information on LIBOR transition readiness 

during examinations and other contacts with supervised institutions. The data are evaluated 

across institutions to identify trends and inform the supervisory process for areas that may 

require increased oversight and supervisory attention. 

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To assist supervised institutions in the LIBOR transition, the FDIC established the LIBOR 

Transition Site on the Banker Resource Center. FDIC staff post key announcements related to 

the LIBOR transition as a resource to supervised banking institutions. 

At the June 11, 2021 meeting of the Financial Stability Oversight Council (FSOC), FDIC 

Chairman McWilliams noted that “most FDIC-supervised institutions do not have material 

LIBOR exposures. Those that do tend to be banks with total assets exceeding $10 billion and 

larger community banks that engage in commercial lending or derivative activities. These 

institutions have generally developed appropriate plans to move away from LIBOR and 

have stopped, or are on track to stop, issuing new contracts using LIBOR by year-end.” 

The Chairman reiterated that “the FDIC does not endorse any particular alternative 

reference rate.” 

To provide clarity on capital implications of the LIBOR transition, on July 29, 2021, the FDIC 

(in coordination with the FRB and OCC) issued Answers to Frequently Asked Questions (FAQs) 

about the Impact of LIBOR Transitions on Regulatory Capital Instruments. Among other things, 

the FAQs address the issue of changing a reference rate from LIBOR to an alternative rate 

and clarify that such a transition would not change the capital treatment of the instrument, 

provided the alternative rate is economically equivalent with the LIBOR-based rate. 

On October 20, 2021, the FDIC, FRB, OCC, NCUA, and CFPB, in conjunction with the state bank 

and state credit union regulators, jointly issued a statement to emphasize the expectation that 

supervised institutions with LIBOR exposure continue to progress toward an orderly transition 

away from LIBOR. The statement also included clarification regarding new LIBOR contracts, 

considerations when assessing the appropriateness of alternative reference rates, and 

expectations for fallback language.3

 The agencies reiterated that failure to prepare adequately 

for LIBOR’s discontinuance could undermine financial stability and institutions’ safety and 

soundness and create litigation, operational, and consumer protection risks. 

Current Expected Credit Losses (CECL) 

In June 2016, the Financial Accounting Standards Board (FASB) introduced the CECL 

methodology for estimating allowances for credit losses, replacing the current incurred-loss 

methodology. 

Since then, the FDIC has worked collaboratively with the FRB, OCC, FASB, Securities and 

Exchange Commission (SEC), and CSBS to answer questions regarding the implementation 

of CECL. 

 CECL became effective for primarily larger institutions or SEC filers, excluding

entities eligible to be smaller reporting companies (SRCs) starting January 1, 2020,

excluding those institutions that delayed adoption in accordance with Section

4014 of the Coronavirus Aid, Relief, and Economic Security Act, as amended by the

Consolidated Appropriations Act of 2021.

3

 Fallback language is contractual provisions that specify the trigger events for a transition to a replacement rate, the 

replacement rate, and the spread adjustment to align the replacement rate with the benchmark being replaced. 

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 For institutions that have not yet adopted CECL, the effective date for adoption

remains fiscal years beginning after December 15, 2022, including interim periods,

and thus, 2023 for most smaller reporting companies as defined by the SEC and

nonpublic companies unless early adoption is elected.

MANAGEMENT OF CREDIT RISK, LIQUIDITY RISK, 

AND INTEREST-RATE RISK 

Financial institutions showed adaptability in 2021 as economic uncertainty related to the 

COVID-19 pandemic and its variants continued. Loan deferrals, which institutions granted 

to assist borrowers as the pandemic initially unfolded, have decreased, and asset quality 

has improved. 

Limited observed credit risk concerns are centered on loans to service industries well-known 

to be impacted by the pandemic, namely hospitality and retail. While the economic outlook 

is positive, managing credit risk remains challenging as government stimulus winds down, 

forbearance periods expire, and changes in consumer and business behaviors accelerated by 

the pandemic persist. 

Deposit inflows moderated as pandemic relief programs expired, but deposit levels remain 

high compared to the pre-pandemic period. Ample liquidity, coupled with low loan demand 

outside of the Small Business Administration’s guaranteed Paycheck Protection Program, 

has contributed to a greater mix of low-yielding assets on financial institution balance sheets. 

Net interest margins have contracted to record low levels. Profitably deploying liquidity and 

limiting the adverse impacts from a “low for long” interest rate environment are among the 

industry’s top priorities. 

Through examinations and interim contacts with state nonmember institutions, FDIC staff 

regularly engage in dialogue with institution management about the need to ensure that 

their practices to manage credit risk, liquidity risk, and interest-rate risk are effective. Where 

appropriate, FDIC staff work with institutions that have significant exposure to these risks 

and encourage them to take appropriate risk-mitigating steps. The FDIC employs off-site 

monitoring to help identify institutions that may have heightened exposure to these risks 

and follows up with them to better understand their risk profiles. Throughout 2021, the FDIC 

conducted outreach and offered technical assistance regarding these risk issues. 

SUPERVISORY GUIDANCE 

Regulatory Relief - Areas Affected by Severe Storms 

During 2021, the FDIC issued 18 advisories through Financial Institution Letters to provide 

guidance to financial institutions in areas affected by hurricanes, tornadoes, flooding, 

wildfires, and other severe storms, and to facilitate recovery. In these advisories, the FDIC 

encouraged financial institutions to work constructively with borrowers experiencing 

financial difficulties as a result of natural disasters, and clarified that prudent extensions or 

modifications of loan terms in such circumstances can contribute to the health of communities 

and serve the long-term interests of lending institutions. 

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Frequently Asked Questions on Suspicious Activity Reporting and Other Anti-Money 

Laundering Considerations 

In January 2021, FinCEN, the FDIC, and the other federal banking agencies issued Answers to 

Frequently Asked Questions (FAQs) Regarding Suspicious Activity Reports (SARs) and other AML 

considerations for financial institutions covered by SAR rules. 

The FAQs clarify the regulatory requirements related to SARs to assist financial institutions 

with their compliance obligations, while enabling those institutions to focus resources on 

activities that produce the greatest value to law enforcement agencies and other government 

users of BSA reporting. The FAQ answers were developed in response to Bank Secrecy Act 

Advisory Group recommendations; they neither alter existing BSA/AML legal or regulatory 

requirements, nor establish new supervisory expectations. 

Request for Information on Artificial Intelligence 

In March 2021, the FDIC, along with the FRB, OCC, CFPB, and NCUA released a RFI regarding 

financial institutions’ use of artificial intelligence (AI). The goal of the RFI is to better 

understand the use of AI by financial institutions; appropriate governance, risk management, 

and controls over AI; challenges in developing, adopting, and managing AI; and whether any 

regulatory clarifications would be helpful. 

The FDIC supports responsible innovation by financial institutions and recognizes that the use 

of new technology, such as AI, has the potential to augment decision-making and enhance 

services available to consumers and businesses. 

The initial comment period on the RFI was extended to July 1, 2021. The FDIC has reviewed 

the comment letters submitted to the FDIC and is assessing potential next steps in 

consultation with the other agencies. 

Interagency Statement on Model Risk Management for Bank Systems Supporting Bank 

Secrecy Act/Anti-Money Laundering Compliance 

In April 2021, the FDIC and other federal banking agencies, in consultation with FinCEN and 

the NCUA, issued a statement regarding industry questions on model risk management. 

The statement addressed how the risk management principles described in the Supervisory 

Guidance on Model Risk Management relate to systems or models used by banks to assist in 

complying with the BSA/AML requirements. 

Request for Information and Comment: Model Risk Management Support Compliance by 

Banks with BSA/AML and Office of Foreign Assets Control Requirements 

In conjunction with issuing the Interagency Statement on Model Risk Management for Bank 

Systems Supporting BSA/AML Compliance, the agencies published an RFI seeking comment 

on the extent to which the principles discussed in the Supervisory Guidance on Model Risk 

Management support compliance by banks with BSA/AML and Office of Foreign Assets 

Control (OFAC) requirements. Specifically, the RFI sought to enhance the understanding of 

bank practices in this area and identify issues where additional explanations may increase 

transparency and effectiveness. 

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A total of 12 comment letters were received with responses to 12 questions regarding banks’ 

use of automated AML transaction and OFAC monitoring models, as well as suggested 

enhancements to the April statement. This feedback may be considered in the context of 

AML Act, Section 6209 - Testing Methods rulemaking, which requires FinCEN, in consultation 

with federal banking agencies, to issue a rule specifying standards by which financial 

institutions must test the technology and related internal processes designed to facilitate 

BSA/AML compliance. 

Request for Information on Digital Assets 

In May 2021, the FDIC issued an RFI seeking information and comments regarding insured 

depository institutions’ current and potential digital assets activities. Specifically, the FDIC 

sought feedback regarding current and potential digital asset use cases involving insured 

institutions and their affiliates. The RFI recognized that banks are increasingly exploring 

several roles in the emerging digital asset ecosystem, and consumers are beginning to seek 

access to digital asset products and services. The FDIC understands that there are novel and 

unique considerations related to digital assets, and the RFI was intended to help inform the 

FDIC’s understanding and any potential policymaking in this area. The questions posed in the 

RFI sought information regarding digital asset use cases, risk and compliance management 

functions, and considerations for supervision, deposit insurance, and resolution. The 

comment period ended July 16, 2021. The FDIC has reviewed the 43 comment letters received 

and has used the information to inform its engagement on the crypto-asset policy sprint and 

other supervisory work.® 

Joint Statement on Crypto-Asset Policy Sprint Initiative and Next Steps 

The FDIC, along with the FRB and OCC issued a Joint Statement on Crypto-Asset Policy Sprint 

Initiative and Next Steps. First, the statement summarized the series of interagency “policy 

sprints” focused on crypto-assets, conducted by the agencies in 2021. The statement then 

provided a roadmap of future planned work. 

As described in the statement, throughout 2022, the agencies plan to provide (1) greater clarity 

on whether certain activities related to crypto-assets conducted by banking organizations are 

legally permissible, and (2) expectations for safety and soundness, consumer protection, and 

compliance with existing laws and regulations related to: 

 Crypto-asset safekeeping and traditional custody services,

 Ancillary custody services,

 Facilitation of customer purchases and sales of crypto-assets, 

 Loans collateralized by crypto-assets,

 Issuance and distribution of stablecoins, and

 Activities involving the holding of crypto-assets on balance sheet. 

The agencies also are also working to evaluate the application of bank capital and liquidity 

standards to crypto-assets. 

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President’s Working Group on Stablecoins 

On November 1, 2021, the FDIC joined the President’s Working Group on Financial Markets 

and the OCC to release a report on stablecoins to address the prudential risks of payment 

stablecoins. Among the recommendations in the report was a recommendation that Congress 

enact legislation to ensure that payment stablecoin arrangements are subject to a federal 

framework on a consistent and comprehensive basis. 

Proposed Interagency Guidance on Third-Party Relationships 

In July 2021, the FDIC, OCC, and FRB proposed interagency guidance for third-party risk 

management. The proposed guidance, if finalized, is intended as a resource to help banks 

manage their third-party relationships in a safe and sound manner and in compliance with 

applicable laws and regulations, including those related to consumer protection and security 

of customer information. The proposed guidance applies third-party risk management 

principles to the lifecycle of a bank’s relationship with a third party (other than customer 

relationships), providing detailed descriptions and examples of considerations applicable 

to all third-party relationships, including relationships with fintech companies, while 

emphasizing that a bank’s third-party risk management program should be commensurate 

with its size, complexity, risk profile, level of risk, and number of third-party relationships. 

Although the proposed guidance, if adopted, would replace the general third-party risk 

management guidance issued individually by each of the agencies (including the FDIC’s 

Guidance for Managing Third-Party Risk issued in 2008), it would not affect other specific 

third-party risk management guidance issued by the agencies, including those relating to 

information technology risks. 

The proposal was published in the Federal Register on July 19, 2021, and the agencies 

accepted comments until October 18, 2021. The FDIC received 74 comments; the three 

agencies received a total of 82 comments. The agencies are now considering those comments. 

Answers to Frequently Asked Questions about the Impact of LIBOR Transitions on 

Regulatory Capital Instruments 

As previously discussed, in July 2021, the FDIC issued answers to frequently asked questions 

about the impact of LIBOR transitions on regulatory capital instruments under 12 CFR 324. 

Among other things, the FAQs addressed the issue of changing a reference rate from LIBOR to 

an alternative rate and clarified that such a transition would not change the capital treatment 

of the instrument, provided the alternative rate is economically equivalent to the LIBOR-based 

rate. The OCC and the FRB issued similar FAQs. 

Authentication and Access to Financial Institution Services and Systems 

On August 11, 2021, the FFIEC issued new guidance entitled Authentication and Access to 

Financial Institution Services and Systems. The guidance provides financial institutions with 

examples of effective authentication and access risk management principles and practices. 

These principles and practices are for digital banking services and information systems. 

The new guidance addresses a financial institution’s risk assessment, which is critical for 

determining appropriate access and authentication practices; authentication practices for 

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a wide range of users including customers, employees, third parties, and service accounts 

accessing financial institution systems and services; and how multi-factor authentication, 

or controls of equivalent strength, can be used to effectively mitigate risks of unauthorized 

access. 

The guidance replaces the FFIEC-issued Authentication in an Internet Banking Environment 

(2005) and the Supplement to Authentication in an Internet Banking Environment (2011). 

Request for Information on the FDIC’s Supervisory Approach to Examinations 

During the Pandemic 

On August 13, 2021, the FDIC issued an RFI seeking feedback and comments from FDICsupervised financial institutions regarding the FDIC’s supervisory approach to examinations 

during the pandemic, including the impact of off-site activities on institution operations, 

the effectiveness of technology used to carry out off-site activities, and the effectiveness of 

communication methods used to support off-site activities. 

For a number of years prior to the pandemic, the FDIC had been leveraging technology 

advancements to allow examiners to conduct certain examination functions off-site that were 

previously performed on-site. Throughout the COVID-19 pandemic, examiners have continued 

the FDIC examination program despite pandemic conditions, in part by leveraging prior efforts 

and existing technology systems. 

The RFI comment period closed on October 12, 2021. The FDIC is reviewing the 20 comments 

received to identify what worked well in the off-site examination context in order to 

inform plans for future examinations, consistent with applicable law and the purpose of 

examinations. 

Research 

CENTER FOR FINANCIAL RESEARCH 

The FDIC’s Center for Financial Research (CFR) encourages, supports, and conducts innovative 

research on topics that inform the FDIC’s key functions of deposit insurance, supervision, and 

the resolution of failed banks. CFR researchers have published papers in leading banking, 

finance, and economics journals, including the American Economic Review; Journal of Money, 

Credit, and Banking; Journal of Consumer Affairs; and Journal of Financial Services Research. In 

addition, CFR researchers present their research at major conferences, regulatory institutions, 

and universities. 

The CFR also develops and maintains many financial models used throughout the FDIC, 

including off-site models that inform the examination process. CFR economists also provide 

ongoing support to RMS during on-site examinations. 

In April, the CFR hosted the FDIC’s first Academic Challenge. The FDIC Academic Challenge 

is a team competition for undergraduate students, designed to bring real-world policy 

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“The Effects of Community Banks 

on Local Economic Development.” Finalists 

 

 

 California State 

University, Fullerton; 

 State University of New 

York College at Geneseo; 

 University of Chicago; 

 University of Delaware; 

 University of North 

Carolina at Chapel Hill.

questions into the classroom and address questions concerning the banking industry. The 

topic for the 2020-2021 FDIC Academic Challenge was “The Effects of Community Banks on 

Local Economic Development.” After a first-round review of written submissions, five teams 

were selected as finalists: California State University, Fullerton; State University of New York 

College at Geneseo; the University of Chicago; the University of Delaware; and the University 

of North Carolina at Chapel Hill. The finalists participated in an all-day virtual event where 

they presented their project to a panel of five judges that included community bank CEOs, a 

university professor, and members of the organizing committee. When the teams were not 

presenting their work, they met with FDIC staff to discuss careers at the FDIC and what to 

expect in graduate school programs, including MBA, JD, and PhD programs. 

Following the presentations, the teams met with FDIC staff in a plenary session to discuss 

deposit insurance, bank resolutions, and current issues in banking regulation. At the end of 

the day, FDIC Chairman McWilliams announced the winner of the Challenge—State University 

of New York College at Geneseo—and met with the winning team. The 2021-2022 FDIC 

Academic Challenge launched in September with first-round written submissions due in 

November. 

In December, the CFR hosted the 20th Annual Bank Research Conference with the Journal 

of Financial Services Research. FDIC Chairman McWilliams provided opening remarks for 

the conference. To celebrate the 20th anniversary of the conference, there were two panel 

discussions—one to discuss the lessons learned in the past 20 years and one to look forward 

to the next 20 years. A retrospective article that discusses the impact of the first 20 years of 

the conference on policy and research communities, financial regulation, and the banking and 

finance literature is forthcoming in the Journal of Financial Services Research. 

This year’s conference paper sessions focused on safety nets, transparency, and bank 

behavior; understanding the industry and organizational impacts of fintech; COVID-19 

and financial contagion channels; the effects of banking competition on borrowers; bank 

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risk and regulation; systemic risk and bank regulation; bank funding; and climate change. 

The conference also included a virtual poster session in which authors recorded short 

presentations of their papers and a fast-track session during which authors presented six 

papers in a condensed timeframe. 

In 2021, CFR hosted four PhD students as part of the Summer Research Fellow Program. 

The program targets PhD. students who have completed their qualifying examinations and 

have well-developed research towards finishing their PhDs. Summer Research Fellows are 

encouraged to continue their dissertation work and build research relationships with FDIC 

colleagues. They participate in seminars and informal lunchtime presentations of research, 

engage with FDIC staff, and present their own research at the end of the summer. 

The Summer Research Fellows benefit from institutional knowledge of FDIC staff, CFR 

expertise on modeling, and presentation opportunities. The FDIC benefits from developing 

relationships with emerging scholars, expanding the reach of the CFR research network, and 

promoting career opportunities at the FDIC. 

In partnership with the American Economic Association Summer Program and Howard 

University, CFR hosted two undergraduate students in the summer of 2021. The summer 

experiential learning program offered the students an opportunity to apply their research 

skills to FDIC-relevant questions under the guidance of CFR economists and to develop careerlong mentoring relationships. The program aims to increase diversity in the field of economics 

and to attract a diverse workforce to related positions. 

How America Banks: Household Use of Banking and Financial Services 

Section 7 of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005 

mandates that the FDIC regularly report on unbanked populations and bank efforts to bring 

individuals and families into the mainstream banking system. In response, since 2009, the 

FDIC has conducted biennial surveys to measure the banked and unbanked populations in the 

U.S. and study household use of banking and financial products and services. This effort is 

the most comprehensive analysis of its kind. The information it generates informs the FDIC, 

as well as the public, financial institutions, policymakers, regulators, researchers, academics, 

and others. 

In 2021, the FDIC finalized and administered the 2021 Survey of Household Use of Financial 

Services. The 2021 survey collected new information on how households use a wide range 

of bank and nonbank financial services and products to meet their core banking needs. In 

addition, the 2021 survey also collected information on economic events that households 

experienced since March 2020 and asked whether those events contributed to households 

becoming banked or unbanked. 

The FDIC continued to maintain a dedicated website that features survey results and data, 

and provides users with the ability to generate custom tabulations for each state and for more 

than one hundred Metropolitan Statistical Areas. The website also provides a wide range of 

preformatted information, including five-year estimates that provide additional granularity for 

state and local results. 

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National and Regional Risk Analysis 

The FDIC’s National and Regional Risk Analysis (NRRA) Branch identifies, analyzes, monitors, 

and communicates developments and key risks in the economy, financial markets, and 

banking industry that may impact FDIC-insured institutions and the DIF. As part of this work, 

NRRA publishes the Quarterly Banking Profile — a comprehensive summary of financial results 

for all FDIC-insured institutions. This report card on industry status and performance includes 

written analyses, graphs, and statistical tables. NRRA also published the 2021 Risk Review, 

summarizing key credit and market risks. 

In addition, NRRA publishes topical articles in the FDIC Quarterly. In 2021, this included 

seven articles: 

 “Farm Banks: Resilience Through Changing Conditions,” which analyzes trends in 

the agricultural sector and challenges faced by agricultural lenders; 

 “2020 Summary of Deposits Highlights,” which explains trends in bank deposit 

and branch growth; 

 “The Historic Relationship Between Bank Net Interest Margins and Short-Term 

Interest Rates,” which explores the connection between interest rates and bank 

net interest margins; 

 “Residential Lending During the Pandemic,” which follows key trends in the 

housing market and residential lending activity of banks; 

 “The Importance of Technology Investments for Community Bank Lending and 

Deposit Taking During the Pandemic,” which describes the relationship between 

community bank technology investment and lending and deposit activity during 

the pandemic; 

 “Commercial Real Estate: Resilience, Recovery, and Risks Ahead,” which assesses 

conditions in the commercial real estate sector and implications for banks; and 

 “Implications of Record Deposit Inflows for Banks During the Pandemic,” which 

provides insight on the opportunities and challenges presented to banks by the 

increased liquidity from deposit inflows during the pandemic. 

Innovation/Financial Technology 

The FDIC continuously monitors developments in technology to further advance the mission 

of the FDIC and better understand how it may affect the financial industry. 

FDITECH and FDIC Emerging Technology Steering Committee 

In 2021, the FDIC’s Office of Innovation — or FDITECH — continued its work to encourage 

innovation and partnerships at community banks. FDITECH was announced and established 

by Chairman McWilliams in 2019, with the following mission: 

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 Engage bankers, fintechs, technologists, and other regulators on innovations that 

will lay the foundation for banking’s future; 

 Conduct “tech sprints” and pilot projects to test emerging technologies in 

cooperation with states and affected federal regulators; 

 Support and promote the adoption of new technologies by financial institutions, 

particularly at community banks; and 

 Expand banking services to the unbanked, underbanked, and individuals in 

underserved communities through new technologies. 

In 2021, FDITECH took the following steps toward fulfilling that mission: 

 In February 2021, the FDIC named its first Chief Innovation Officer, charged with 

leading the FDIC’s efforts to promote the adoption of innovative technologies 

across the financial services sector. In May 2021, the FDIC also named its first 

Deputy Director of the Office of Innovation. 

 In February 2021, the Chief Innovation Officer began a bank-focused “Listening 

Tour” with discussions focused on innovation, inclusion, data, and efficiency 

opportunities. The Listening Tour expanded to include Congress, technology 

companies, fintechs, trade associations, and interest groups. 

 From February to year-end 2021, FDITECH participated in a variety of policy 

discussions focused on emerging technologies (e.g., AI, Quantum Computing, 

Digital Assets), as well as cybersecurity, internally to the FDIC, across the federal 

banking agencies, and across other federal agencies. Discussions centered on 

multi-factor authentication/authorization, better third-party technology risk 

management, and advancing cryptographic systems to support coming changes 

due to Quantum Computing (i.e., Post-Quantum Encryption). 

 In the second and third quarters of 2021, FDITECH hosted a series of virtual “Office 

Hours” to hear directly from a range of bank-focused stakeholders regarding 

current and evolving technological innovations in the business of banking. 

During the same period, the Chief Innovation Officer hosted more than two 

dozen roundtables focused on digitization, data access and ownership, artificial 

intelligence and machine learning, and personalization of the banking experience. 

 In June 2020, the FDIC announced a rapid prototyping competition, a type 

of procurement process tech sprint, to accelerate the adoption of modern 

technological tools to help financial institutions, particularly community banks, 

provide more timely and granular data to the FDIC in a more effective and efficient 

manner. In addition, these new tools will help the FDIC gain greater insight into 

the financial health of these institutions and allow for more efficient supervision. 

Phase one began in August 2020 with more than 30 technology firms from across 

the country invited to participate in the competition. With some formed into 

teams, the competitors developed proposed solutions that were presented 

to the FDIC for consideration. Competitors represent leaders in the financial 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

services, data management, data analytics, and AI/ML fields. In October 2020, 15 

competitors advanced to the second phase of the competition, presenting their 

initial prototypes. The FDIC selected 11 companies in January 2021 to compete 

in the third and final phase of the rapid prototyping competition. In March 2021, 

vendors presented their final prototypes and, by August 2021, four companies 

were selected to submit proposals moving into the pilot phase, which will be led 

by FDITECH. 

 Starting in April 2021, the Chief Innovation Officer held five podcast talks − 

Banking on Innovation, Engineering Innovation in the Banking System, Building 

a More Resilient Banking System, Protecting the Banking System, and The Age 

of Quantum Banking − under the Banking on Innovation program, which can be 

found on the FDIC’s public website. 

 In May 2021, FDITECH partnered with Duke University’s Pratt School of Engineering 

to explore new technology and financial inclusion. FDITECH and Duke University 

started a 10-week project with participants from the Master of Engineering in 

Financial Technology program to explore smart contracts risk analysis, digital 

assets, and financial inclusion, culminating in three team presentations in 

August 2021. 

 In July 2021, FDITECH held its first Innovation Town Hall, discussing tech-related 

activities and upcoming innovations. FDITECH also debuted internal open 

channels of communication for FDIC staff to ask questions and discuss new 

technologies. 

 FDITECH held two tech sprints during 2021, bringing together a diverse set of 

stakeholders in a collaborative setting. During August and September, the 

“Breaking Down Barriers: Reaching the Last Mile of the Unbanked” tech sprint was 

hosted by FDITECH with eight participant teams presenting solutions. The tech 

sprint had more than 20,000 combined views on LinkedIn, Twitter, and the FDIC 

website and more than 500 attendees at Demo Day. While some teams expanded 

on existing solutions, three of the teams created new solutions that are planned 

for release to the market within the next six months. The second tech sprint, 

“From Hurricanes to Ransomware: Measuring Resilience in the Banking World,” 

was held from September to October with six participating teams. 

 In the third and fourth quarters of 2021, FDITECH prototyped a fully functional 

cloud data analytical and analysis environment that supports AI/ML. The 

environment supports dynamically and automatically pulling in data from 

various data sources, loading, processing, and enriching the data. FDITECH built 

a pilot first-iteration bank-failure model using neural networks and tensor flow 

constructed with public Call Report data and script-configured AI/ML. FDITECH 

dynamically generates push notification alerts from model results, and employed 

a commercial off-the-shelf data masking and synthetic data generation solution to 

successfully generate synthetic datasets using public Call Report data. 

 In the third and fourth quarters of 2021, FDITECH collaborated with the FDIC’s 

Chief Information Officer Organization to build consensus on an innovative data 

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strategy for the FDIC, including Azure Adoption Program, Cloud Data Management 

and Analytics program, and the mainframe exit. 

 In the fourth quarter 2021, FDITECH formed a divisional outreach and governance 

program. Through this program, FDITECH worked with the Chief Financial Officer 

Organization to help them reach their goals using innovative technologies and 

strategies. 

 In October 2021, FDITECH launched the FDIX program. FDIX is an internal ideation 

program to build on existing technological infrastructure to improve processes 

within the FDIC. 

 In December 2021, FDITECH hosted a public live stream event with over 1,600 

viewers titled Banking and Fintech: “The Future is Now” to discuss the future of 

financial innovation and the potential impacts to financial markets, technology, 

and diversity, equity, and inclusion. The event was broken down into three distinct 

panels made up of industry innovators, leaders, and key market stakeholders. 

In addition to FDITECH, significant resources have been dedicated to identify and understand 

emerging technology and ensure the FDIC is prepared to address the changing landscape in 

financial 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 comprised of the Directors of RMS, DCP, the Division of Insurance and Research (DIR), the 

Division of Resolutions and Receiverships (DRR), and the Division of Complex Institution 

Supervision and Resolution (CISR), as well as the General Counsel, Chief Financial Officer, 

Chief Innovation Officer, Chief Risk Officer, Chief Information Officer, and the Deputy to the 

Chairman for Consumer Protection and Innovation. 

In 2021, the Emerging Technology Steering Committee continued work on its established 

objectives: 

 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; 

 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. 

In 2020, the Legal Division formed the Financial Technology and Innovation Group within the 

Office of the General Counsel.® That group houses the Fintech Innovation Team of attorneys, 

which focuses on legal issues facing both the FDIC and its supervised and insured banks and 

savings associations arising from emerging forms of technology, innovative banking products 

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and services, new approaches to the business of banking, and adapting relationships with 

third parties.® The team’s mission focuses on not only providing direct legal services and 

support to the other Divisions and FDITECH, but also advising on legal policy in an area of 

law that is dynamic and still developing. Through 2021, this team has continued to support 

FDITECH’s Tech Sprints and other programs, as well as provide direct legal support to several 

interagency bank activity, crypto-asset, and stablecoin policy initiatives. The team has 

contributed to, and at times led, various innovation efforts, such as the FDIC’s supervisory 

approach toward bank engagement with digital assets and related technologies; the 

development of an interagency guide as a resource for community banks when considering 

entering into business relationships with fintech companies (Conducting Due Diligence on 

Financial Technology Companies: A Guide for Community Banks); and the potential use of 

consensus standards in banks’ due diligence of fintech firms, products, and services. 

Partnerships 

The FDIC also participates on several working groups related to financial technology: 

 The Basel Committee on Banking Supervision’s Financial Technology Group, 

which focuses on the impact of financial technology on banks’ business models, 

risk management, and implications for bank supervision; 

 The Financial Stability Oversight Council Digital Assets Working Group, which 

is examining potential policy areas as they relate to digital assets and the 

application of distributed ledger technology; 

 The Interagency Group on Digital Assets, where agencies exchange information 

about digital asset and related developments; 

 An interagency fintech discussion forum, which focuses on issues related to 

consumer compliance; 

 The Global Financial Innovation Network; 

 The US-UK Financial Innovation Partnership, which focuses on the exchange of 

information and policy discussions between U.S. and UK regulators; and 

 The Financial Stability Board Financial Innovation Network, which monitors 

various innovative developments in financial markets, including innovation in 

financial technology. 

FDIC Staff Education 

In 2021, as part of an initiative to provide staff training and knowledge transfer, the FDIC held 

a series of webinars for FDIC staff on a range of emerging technology topics that the FDIC 

has been monitoring through the Emerging Technology Steering Committee for a number of 

years. Specifically, those topics included Payments Disintermediation, Consumer-Authorized 

Data Access, Digital Assets, Digital Only/Neo–Banks, and Digital Payments. The webinars 

are recorded and made available “On Demand” to FDIC staff, along with recordings of prior 

webinars on AI/ML and Application Programming Interfaces and Background Notes on various 

emerging technology topics. 

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Community Banking 

Community banks provide traditional, relationship-based banking services in their local 

communities. As the primary federal supervisor for the majority of community banks, the 

FDIC has a particular responsibility for the safety and soundness of this segment of the 

banking system. 

Community banks (as defined for FDIC research purposes) made up 91 percent of all FDICinsured institutions on September 30, 2021. While these banks hold just 12 percent of 

banking industry assets, community banks are of critical importance to the U.S. economy 

and local communities across the nation. Community banks hold 39 percent of the industry’s 

small loans to farmers and businesses, making them the lifeline to entrepreneurs and small 

enterprises of all types. They hold the majority of bank deposits in U.S. rural counties and 

micropolitan counties with populations up to 50,000. In fact, as of June 2021, community 

banks held more than 75 percent of deposits in 1,144 U.S. counties. In more than 600 of 

these counties, the only banking offices available to consumers were those operated by 

community banks. 

Community Banking Research 

The FDIC pursues an ambitious, ongoing agenda of research and outreach focused on 

community banking issues. In conjunction with the 2012 and 2020 community banking 

studies, FDIC researchers have published more than a dozen additional studies on topics 

ranging from community bank technology investment to small business financing. 

The FDIC Quarterly Banking Profile includes a section explicitly focused on community bank 

performance, providing a detailed statistical picture of the community banking sector that can 

be accessed by analysts, other regulators, and bankers themselves. The most recent report 

shows that net income at community banks increased 38.5 percent on a merger-adjusted 

basis in the first nine months of 2021 compared with the first nine months of 2020, reflecting 

improvement in the economy. The increase in net income during the first nine months of 2021 

was due to large decreases in credit loss provisions due to the real and anticipated economic 

and financial improvement as the U.S. emerges from the COVID-19 pandemic. 

The long-term trend of consolidation has done little to diminish the role of community banks 

in the banking industry. For example, while loans at community banks declined in the first 

nine months of 2021, on a merger-adjusted basis, loan growth at community banks exceeded 

the growth at noncommunity banks every year between 2012 and 2020. The decline in loans 

at community banks reflects the pay-downs and forgiveness of Paycheck Protection Program 

(PPP) loans originated in 2020 and early 2021. If PPP loans were excluded, in the first nine 

months of 2021, community banks would have reported annual loan growth of 5.1 percent and 

noncommunity banks would have reported loan growth of 2.7 percent. More than 86 percent 

of the community banks that merged between September 2020 and September 2021 were 

acquired by other community banks. 

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2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

-10

-5

0

5

10

15

2021* 

MANAGEMENT’S DISCUSSION AND ANALYSIS 

COMMUNITY BANK LOAN GROWTH HAS EXCEEDED GROWTH 

AT NONCOMMUNITY BANKS FOR NINE CONSECUTIVE YEARS 

Merger Adjusted Annual Growth in Total Loans and Leases 

15% 

12.3% 

10% 

5% 

0% 

-5% 

-10% 

-15% 

-0.9% 

2.0% 

3.4% 2.9% 

5.0% 

2.1% 

8.6% 

4.7% 

8.6% 

6.0% 

3.9% 

7.7% 

4.1% 

6.5% 

3.3% 

2.3% 

5.5% 5.1% 

0.3% 

2.7% 

-1.2% 

8.3% 

4.8% 

-8.9% 

7.0% 

9.5% 

11.2% 

9.3% 

-2.1% 

-0.3% 

-2.3% 

2.1% 

9.0% 

Source: FDIC. 

Note: Data as of third quarter for 2021 and as of year-end for all other years. 2021* hashed bars represent growth 

excluding paycheck Protection Program Loans. 

Community Bank Advisory Committee 

The FDIC’s Advisory Committee on Community Banking is an ongoing forum for discussing 

current issues faced by community banks and receiving valuable feedback from the industry. 

The Committee, which met virtually three times during 2021, is composed of as many as 18 

community bank executives from around the country. It is a valuable resource for information 

on a wide range of topics, including examination policies and procedures, capital and other 

supervisory issues, credit and lending practices, deposit insurance assessments and coverage, 

and regulatory compliance issues. 

 At each of the 2021 Advisory Committee meetings, there was a discussion of local 

banking conditions and supervisory issues, such as cybersecurity resilience, multi-factor 

authentication, and the future approach to examinations, as well as updates from the Minority 

Depository Institutions Subcommittee and the FDIC’s Office of Innovation (FDITECH). Further, 

at the July 2021 meeting, there was a financial inclusion update, a cybersecurity discussion, 

and a presentation from the FDIC Ombudsman on activities from 2019 to 2020. At the April 

and November 2021 meetings, FDIC staff also discussed community banking research. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   

Community Banks 

Noncommunity Banks 
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MANAGEMENT’S DISCUSSION AND ANALYSIS 

Advisory Committee of State Regulators 

The FDIC’s Advisory Committee of State Regulators is another mechanism for state regulators 

and the FDIC to discuss current and emerging issues that have potential implications for the 

regulation and supervision of state-chartered financial institutions. The Advisory Committee 

members include regulators of state-chartered financial institutions from across the United 

States as well as other individuals with expertise in the regulation of state-chartered financial 

institutions. The Advisory Committee met virtually twice in 2021. During both meetings, the 

Committee discussed state banking conditions and state-federal coordination. In addition, 

FDIC staff provided information on FDIC research relating to community banking, as well as 

FDITECH. At the October 2021 meeting, FDIC staff also provided an update on minority and 

community development banking, and cybersecurity supervision initiatives. 

De Novo Banks 

In 2021, the FDIC continued processing deposit insurance applications, meeting with 

applicants to discuss the application process and specific proposals, and making application 

data available on the public website. The FDIC has provided several resources to aid 

organizers in developing deposit insurance proposals, including draft proposals. Interested 

parties may access application-related information and data on applications through the 

FDIC’s public website. 

During 2021, the FDIC approved deposit insurance for 12 new community banks. The FDIC 

maintains an internal goal of acting on 75 percent of community bank deposit insurance 

applications within 120 days after receiving a substantially complete application. The FDIC 

acted within 120 days for 6 applications, or 50 percent of the total; another 2 were completed 

within 135 days. The FDIC did not meet this goal in 2021 due to complexities in certain 

proposals requiring more analysis and changes proposed by applicants. 

Technical Assistance Program 

The FDIC continued to provide a robust technical assistance program for bank directors, 

officers, and employees. The technical assistance program includes an online Banker 

Resource Center, Directors’ College events held across the country, industry teleconferences 

and webinars, and a video program. 

The FDIC continuously updates the Banker Resource Center on its website. This one-stop 

resource for bankers contains detailed information on supervisory topics and general 

information in a number of other areas for bankers and is located at https://www.fdic.gov/ 

resources/bankers. 

In 2021, the FDIC hosted a variety of outreach sessions in all six FDIC regions. These sessions 

were conducted both independently and jointly with state trade associations or other financial 

regulators. During the sessions, FDIC employees engaged with bank directors and officers 

on various topics, including risk assessment, regulatory capital, capital markets, interestrate risk, brokered deposits, BSA, cybersecurity, emerging technologies, and consumer 

protection, among other topics. Additionally, five regions conducted banker roundtable 

events that provided a forum for bankers to receive information and raise questions about 

laws, regulations, or emerging risks. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
MANAGEMENT’S DISCUSSION AND ANALYSIS 

The FDIC also offered several banker events, in order to maintain open lines of communication 

and to keep community bank management and staff informed about important banking 

regulatory and emerging issues. In 2021, the FDIC offered three webinars: 

 Basics of New Paycheck Protection Program (PPP) Loan Programs, 

 Final Rule Revising Brokered Deposits and Interest Rate Restrictions, and 

 Overview and Updates on Consumer Complaints Management. 

The FDIC also issued two publications in 2021 intended to help community banks. Consumer 

Compliance Supervisory Highlights aims to enhance transparency regarding the FDIC’s 

consumer compliance supervisory activities and provides a high-level overview of consumer 

compliance issues identified in 2020 through the FDIC’s supervision of state non-member 

banks and thrifts. In addition, the FDIC, in collaboration with the FRB and the OCC, issued 

Conducting Due Diligence on Financial Technology Companies: A Guide for Community Banks, 

which is intended to help community banks conduct due diligence when considering 

relationships with financial technology companies. 

Through the Technical Assistance Video Program, the FDIC provides a series of educational 

videos designed to provide useful information to bank directors, officers and employees on 

various risk management and consumer protection-related matters. The videos help FDICsupervised institutions understand various risk management and consumer protectionrelated matters. In 2021, the FDIC released three new segments of the fair lending series and 

five new segments of the mortgage servicer rule series. 

Activities Related to Large and 

Complex Financial Institutions, 

including Systemically Important 

Financial Institutions 

The FDIC is committed to addressing the unique challenges associated with supervising, 

insuring the deposits of, and resolving large and complex financial institutions (LCFIs). The 

agency’s ability to analyze and respond to risks posed by these institutions is critical, as they 

comprise a significant share of banking industry assets and deposits. 

The Division of Complex Institution Supervision and Resolution (CISR) was established in 2019 

to centralize and integrate the FDIC’s operations related to the supervision and resolution of 

LCFIs, including systemically important financial institutions (SIFIs), financial market utilities 

(e.g., central counterparties), and FDIC-IDIs with assets greater than $100 billion, for which the 

FDIC is not the primary federal regulatory authority. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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CISR performs ongoing risk monitoring of LCFIs in its portfolio that are domestic global 

systemically important banks (G-SIBs), large foreign banking organizations (FBOs), large 

domestic banking groups, and FSOC-designated nonbank financial companies; provides 

backup supervision of the firms’ related IDIs; and evaluates the firms’ required resolution 

plans. CISR also performs certain analyses that support the FDIC’s role as an FSOC member. 

SUPERVISION AND RISK ASSESSMENT 

Monitoring and Measuring Systemic Risks 

The FDIC monitors risks related to G-SIBs as well as other large domestic banks and FBOs 

at the firm level and industry wide to inform supervisory planning and response, policy and 

guidance considerations, and resolution planning efforts. As part of this monitoring, the FDIC 

analyzes each company’s risk profile, governance and risk management strategies structure 

and interdependencies, business operation and activities, management information system 

capabilities, and recovery and resolution capabilities. Capital and liquidity adequacy and 

resiliency under stressed conditions are also key parts of monitoring. Further, in response to 

the COVID-19 pandemic, there has been heightened risk monitoring. 

The FDIC continues to work closely with the other federal banking agencies as well as foreign 

regulators to analyze institution-specific and industry-wide conditions and trends, emerging 

risks and outliers, risk management, and the potential risk posed to financial stability by 

G-SIBs, other large domestic banks and FBOs, and nonbank financial companies. To support 

risk monitoring that informs supervisory and resolution planning efforts, the FDIC has 

developed systems and reports that make extensive use of structured and unstructured data. 

Monitoring reports are prepared on a routine and ad-hoc basis and cover a variety of aspects 

that include risk components, business lines and activity, market trends, and product analysis. 

In addition, the FDIC has implemented and continues to expand upon various monitoring 

systems, including the Systemic Monitoring System (SMS), the SIFI Risk Report (SRR), and the 

CAMELS Verification document. The SMS provides an individual risk profile and assessment 

for LCFIs by evaluating the level and change in metrics that serve as important indicators 

of overall risk. The SMS supports the identification of emerging and outsized risks within 

individual firms and the prioritization of supervisory and monitoring activities. Information 

from SMS and other FDIC-prepared reports are used to prioritize activities relating to LCFIs 

and to coordinate supervisory and resolution-related activities with the other banking 

agencies. The SRR identifies key vulnerabilities of systemically important firms, and the 

CAMELS Verification document includes an independent assessment of the appropriateness of 

supervisory CAMELS ratings for the IDIs held by these firms. 

Backup Supervision Activities for IDIs of Systemically Important Financial Institutions 

Risk monitoring is enhanced by the FDIC’s backup supervision activities. In this role, as 

outlined in Sections 8 and 10 of the FDI Act, the FDIC has expanded resources and has 

developed and implemented policies and procedures to guide backup supervisory activities. 

These activities include performing analyses of industry conditions and trends, supporting 

insurance pricing, participating in supervisory activities with other regulatory agencies, and 

exercising examination and enforcement authorities when necessary. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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At institutions where the FDIC is not the primary federal regulator, FDIC staff work closely with 

other regulatory authorities to identify emerging risks and assess the overall risk profile of 

large and complex institutions. The FDIC has assigned dedicated staff to IDIs that are LCFIs, 

to enhance risk-identification capabilities and facilitate the communication of supervisory 

information. These individuals work with the staff of the FRB and OCC in monitoring risk at 

their assigned institutions. 

During 2021, FDIC staff completed 76 targeted examinations and 10 horizontal review 

activities with the FRB or OCC involving G-SIBs, large FBOs, and large regional banks. The 

targeted examination activities included, but were not limited to, the evaluation of corporate 

governance, BSA/AML compliance, IT risk, credit risk, model risk management, operational 

risk, liquidity risk, counterparty risk, market risk, interest-rate risk, and third-party risk 

management. FDIC staff also participated in various horizontal review activities, including the 

FRB’s 2020 Capital Plan Resubmission and 2021 Comprehensive Capital Analysis and Reviews, 

Liquidity Risk Management Reviews, Targeted Loan Reviews, Derivatives Resiliency Reviews, 

and Independent Risk Function Reviews, in addition to interagency Coordinated Cybersecurity 

Reviews and SNC Reviews. 

RESOLUTION PLANNING 

Title I Resolution Plans 

Certain large banking organizations and nonbank financial companies designated by FSOC for 

supervision by the FRB are periodically required to submit resolution plans to the FDIC and 

FRB. Each resolution plan, commonly known as a “living will,” must describe the company’s 

strategy for a rapid and orderly resolution under the U.S. Bankruptcy Code in the event of 

material financial distress or failure of the company. 

In July 2020, the agencies provided information to the eight largest and most complex 

domestic banking organizations to guide their 2021 resolution plans. These eight firms 

submitted resolution plans on or before July 1, 2021, and each firm’s resolution plan includes 

core elements—such as capital, liquidity, and recapitalization strategies—as well as how 

each firm has integrated changes to, and lessons learned from, its response to the COVID-19 

pandemic. The agencies are completing the review of these plans and will assess whether the 

shortcomings identified for six of these firms have been addressed adequately. 

In addition, on July 1, 2020, the FDIC and FRB announced that they had completed a review 

of “critical operations,” which are operations at certain firms whose failure or discontinuance 

would threaten U.S. financial stability, and informed the firms of the agencies’ findings. The 

agencies also announced their plan to complete another such review by July 2022, which will 

include a further, broader evaluation of the framework used to identify critical operations. 

On December 9, 2020, the agencies finalized guidance for certain FBOs that are Category 

II firms according to their combined U.S. operations under the FRB’s tailoring rule and are 

required to have a U.S. intermediate holding company. The final guidance included tailored 

expectations around resolution capital and liquidity; derivatives and trading activity; and 

payment, clearing, and settlement activities. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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In addition, the agencies provided information for Category II and Category III foreign and 

domestic banking organizations that will inform the content of their next resolution plans, 

which were due December 17, 2021. These targeted plans are required to discuss capital, 

liquidity, and recapitalization strategies, among other topics. 

Title II Orderly Liquidation Authority 

Under the Dodd-Frank Act, failed or failing financial companies are expected to file for 

reorganization or liquidation under the U.S. Bankruptcy Code, similar to any failed or failing 

nonfinancial company. If resolution under the Bankruptcy Code would result in serious 

adverse effects to U.S. financial stability, Title II of the Dodd-Frank Act provides a backup 

authority for resolving a company for which the bankruptcy process is not viable. There are 

strict parameters on the use of the Title II Orderly Liquidation Authority, however, and it can 

only be invoked under a statutorily prescribed recommendation and determination process, 

coupled with an expedited judicial review process. 

The FDIC has undertaken institution-specific strategic planning to carry out its orderly 

liquidation authorities with respect to the largest G-SIBs operating in the United States. The 

strategic plans and optionality being developed for these firms are informed by the Title I plan 

submissions. Further, the FDIC updates its systemic resolution framework to incorporate 

enhanced firm capabilities established through the Title I planning process and other 

domestic and foreign resolution planning and policy developments and continues to build out 

process documents to facilitate the implementation of the framework in a Title II resolution. 

In addition, work continues in the development of resolution strategies for financial market 

utilities, particularly central counterparties (CCPs). 

Insured Depository Institution Resolution Planning 

The FDIC also undertakes institution-specific resolution planning under the FDI Act for IDIs 

that are LCFIs, drawing on both IDI plans submitted by firms and follow-on engagement with 

the firms. The development of a large regional bank resolution framework and process builds 

on lessons learned from historical bank resolutions and practices developed in connection 

with Title II resolution readiness planning for LCFIs. 

Section 360.10 of the FDIC Rules and Regulations requires an IDI with total assets of $50 billion 

or more to periodically submit to the FDIC a plan for its resolution in the event of its failure (the 

“IDI rule”). The IDI rule requires covered IDIs to submit a resolution plan that would allow the 

FDIC, as receiver, to resolve the institution under Sections 11 and 13 of the FDI Act in an orderly 

manner that enables prompt access to insured deposits, maximizes the return from the sale or 

disposition of the failed IDI’s assets, and minimizes losses realized by creditors. 

In June 2021, the FDIC outlined a modified approach to implementing the IDI rule. The 

modified approach applies to IDIs with $100 billion or more in total assets, extends the 

submission frequency to a three-year cycle, streamlines content requirements, and places 

enhanced emphasis on engagement with firms. 

The modified approach preserves key content requirements that have helped FDIC staff 

develop resolution strategies for IDIs, but exempts filers from other content requirements that 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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have been less useful or are obtainable through other supervisory channels. On a case-bycase basis, the FDIC also plans to exempt filers from certain content requirements based on its 

evaluation of how useful or material the information would be in planning to resolve each IDI. 

The modified approach also places greater focus on engagement and capabilities testing by 

FDIC staff. This structured, periodic engagement will be used to seek further understanding of 

content submitted in the plan and to assess a filer’s ability to produce relevant information. 

For IDIs with less than $100 billion in total assets, the moratorium on submission of IDI 

plans approved by the Board in April 2019 remains in effect, as indicated in the FDIC’s 

announcement on January 19, 2021. 

There were no resolution plans due to the FDIC in 2021 under Section 360.10. 

Recordkeeping Requirements 

The FDIC has implemented several recordkeeping regulations to support the resolvability 

of certain large IDIs and nonbank financial companies by requiring institutions subject to 

those regulations to maintain recordkeeping and reporting capabilities to enable the timely 

determination of deposit insurance coverage and the evaluation of Qualified Financial 

Contracts (QFCs). The FDIC maintains programs to test compliance with those regulations by 

the institutions that are subject to them. 

Timely Deposit Insurance Determination 

The FDIC’s Recordkeeping for Timely Deposit Insurance Determination regulation (12 CFR Part 

370) became effective on April 1, 2017, with an initial compliance date of April 1, 2020, that 

could be extended to April 1, 2021, if certain conditions were satisfied. Under this rule, an IDI 

that has two million or more deposit accounts for two consecutive quarters must implement 

the information technology system and recordkeeping capabilities needed to calculate the 

amount of deposit insurance coverage available for each deposit account in the event of its 

failure. Doing so will improve the FDIC’s ability to fulfill its statutory mandates to pay deposit 

insurance as soon as possible after an institution’s failure and to resolve an institution at the 

least cost to the Deposit Insurance Fund. 

Qualified Financial Contracts 

There are two regulations that require QFC recordkeeping. The first is the regulation 

promulgated by the U.S. Treasury for Qualified Financial Contracts Recordkeeping related 

to the FDIC Orderly Liquidation Authority (31 CFR Part 148), which requires certain nonbank 

financial companies to provide detailed QFC reporting to the FDIC on an ongoing basis. The 

second is the FDIC’s Recordkeeping Requirements for Qualified Financial Contracts regulation 

(12 CFR Part 371), which requires IDIs meeting the definition for “troubled condition” to 

provide detailed QFC reporting to the FDIC. Both rules require institutions within their scope 

to prepare in advance to provide the information about their QFC portfolios, which may be of 

a significant size and complexity, to facilitate well-informed decisions about how to manage 

them if the FDIC ever were appointed receiver for any of those institutions, whether under the 

FDI Act or under the Orderly Liquidation Authority, as applicable. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

Cross-Border Cooperation 

Cross-border cooperation and advance planning are critical components of resolution 

planning for G-SIBs due to the international nature of their services and their extensive 

operations overseas. In 2021, the FDIC continued its robust bilateral and multilateral 

engagement with foreign authorities to deepen mutual understanding of the complex legal 

and operational issues related to cross-border resolution. This work is underpinned by 

an understanding that transparency and confidence in resolution planning will serve as a 

stabilizing force during times of stress. 

In its effort to continue ongoing work with international authorities to enhance coordination 

on cross-border bank resolution, in 2021 the FDIC led significant principal and staff-level 

engagements with foreign jurisdictions to discuss cross-border issues and potential 

impediments that could affect the resolution of a G-SIB. For example, the FDIC engaged in 

ongoing trilateral work with UK and European financial regulatory authorities. Contributors to 

this work include senior staff and senior officials of financial regulatory agencies from the U.S. 

and key foreign jurisdictions. 

The FDIC maintains a close working relationship on cross-border resolution planning topics 

with EU authorities, including through joint Working Group meetings with the European 

Commission (EC). Throughout the year, FDIC, FRB, and EC staffs held technical experts calls to 

discuss cross-border resolution planning topics. 

Financial Stability Board Resolution Steering Group 

The FDIC continued to enhance cooperation on cross-border resolution through its 

participation in the Financial Stability Board (FSB) Resolution Steering Group and its 

subgroups on banks, insurance, and financial market infrastructures. This year, the FDIC 

continued its active engagement in FSB work, in particular through the FDIC’s membership in 

the Resolution Steering Group and its various committees, including co-chairing the CrossBorder Crisis Management Committee for Financial Market Infrastructures, by contributing to 

work on standards and implementation, and by contributing to work on the FSB’s Evaluation 

of the Effects of Too Big to Fail Reforms and its final report published in April 2021. 

Cross-Border Crisis Management Groups 

With regard to the FDIC’s institution-specific engagement, the FDIC co-chaired Cross-Border 

Crisis Management Groups (CMGs) of supervisors and resolution authorities for U.S. G-SIBs and 

CCPs participated as a host authority in the work of CMGs for foreign G-SIBs and CCPs. Work 

through these CMGs allows the FDIC to improve resolution preparedness by strengthening our 

working relationships with key authorities, providing a forum to address institution-specific 

resolution planning considerations, and supporting information-sharing arrangements. 

The FDIC, in collaboration with the FRB, held meetings for all eight U.S. G-SIB CMGs in 2021. 

The FDIC also held three U.S. CCP CMG meetings in 2021. Due to pandemic-related travel 

restrictions, these meetings were held using a virtual format. 

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Joint U.S.-EU Financial Regulatory Forum 

FDIC staff also participated in two Joint U.S.-EU Financial Regulatory Forum meetings held in 

2021, as a member of the U.S. delegation led by Department of the Treasury staff, along with 

FRB, Commodity Futures Trading Commission (CFTC), SEC, and OCC staff. Staff from the EC, 

European Banking Authority, European Securities and Markets Authority, European Insurance 

and Occupational Pensions Authority, European Central Bank, Single Supervisory Mechanism, 

and Single Resolution Board represented the EU. The Forum meetings underscored EU and 

U.S. cooperation and focused on a number of themes, such as market developments, current 

assessments of financial stability risks, multilateral and bilateral engagement in banking, 

regulatory and supervisory cooperation in capital markets, financial innovation, and AML/CFT 

among other topics. 

U.S.-UK Financial Regulatory Working Group 

The FDIC also maintains a close working relationship on cross-border resolution planning 

topics with UK authorities, including through dialogue as a participating agency in the U.S.-

UK Financial Regulatory Working Group (FRWG), which the U.S. Department of the Treasury 

and UK Treasury established in 2018 to serve as a forum for bilateral regulatory cooperation 

between the U.S. and the UK. The FDIC participates along with the FRB, OCC, SEC, and CFTC; 

participating UK regulators include the Bank of England and the Financial Conduct Authority. 

In 2021, FRWG meetings focused on a number of themes, such as international and bilateral 

cooperation, updates on domestic initiatives and priorities, benchmark transition, crossborder regimes, operational resilience, and banking, among other topics. 

Principals Meeting of UK and U.S. Authorities Regarding CCP Resolution 

In June 2021, senior officials from the FDIC, CFTC, SEC, FRB, and the Bank of England 

convened a virtual meeting to discuss certain issues relating to the concept of the resolution 

of a CCP. This meeting was one of a regular series of senior-level meetings held since 2017 to 

share views on CCP resolution and review the progress of an ongoing program of joint work 

among the agencies. 

This work to date has included a review of UK and U.S. legal frameworks for resolution and 

analysis of the rulebooks of major UK and U.S. CCPs, thus facilitating the development of 

prototype resolution strategies for these CCPs. The work also has included consideration of 

the potential systemic impacts and operational challenges that might result from the use of 

resolution powers. 

Over the next year, the group will continue to share analyses and discuss policy formulation in 

relation to CCP resolution, with the objective of facilitating progression from the development 

of resolution strategies to detailed operational planning. 

Systemic Resolution Advisory Committee 

The FDIC created the Systemic Resolution Advisory Committee (SRAC) in 2011 to provide 

advice and recommendations on a broad range of issues relevant to the failure and resolution 

of systemically important financial companies pursuant to the Dodd-Frank Act. 

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Members of the SRAC have a wide range of experience, including managing complex firms, 

serving as bankruptcy judges, and working in the legal system, accounting field, and 

academia. The SRAC Charter was renewed in 2021, and FDIC staff has initiated planning for 

the next SRAC meeting. 

Depositor and 

Consumer Protection 

A major component of the FDIC’s mission is to ensure that financial institutions treat 

consumers and depositors fairly, and operate in compliance with federal consumer protection, 

anti-discrimination, and community reinvestment laws. The FDIC also promotes economic 

inclusion to build and strengthen positive connections between insured financial institutions 

and consumers, depositors, small businesses, and communities. 

Promoting Economic Inclusion 

The FDIC is committed to expanding economic inclusion in the financial mainstream by 

ensuring that all Americans have access to affordable and sustainable products and services 

from insured depository institutions. FDIC economic inclusion initiatives are integral to our 

mission of maintaining stability and public confidence in the nation’s financial system. 

The FDIC promotes economic inclusion and community development through collaborations 

with financial institutions and other stakeholders committed to strategic initiatives that 

impact low- and moderate-income (LMI) communities. 

The FDIC’s Economic Inclusion Strategic Plan addresses five areas of opportunity: Financial 

Education, Insured Deposits, Consumer Credit, Mortgage Credit, and Small Business. 

Advisory Committee on Economic Inclusion 

The Advisory Committee on Economic Inclusion (ComE-IN) provides the FDIC with advice and 

recommendations on important initiatives to support expanding consumer and community 

access and sustainable engagement with the nation’s banking system. This includes reviewing 

basic retail financial services (e.g., low-cost, safe transaction accounts; affordable small-dollar 

loans; and savings accounts), as well as demand-side factors such as consumers’ perceptions 

of financial institutions. In 2021, the ComE-IN met and discussed the following topics: 

 Expanding inclusion through technology and innovation; 

 Expanding account access using the #GetBanked awareness campaign; 

 The FDIC Tech Sprint designed to solicit new approaches to bringing in unbanked 

individuals into the mainstream banking system; 

 Expanding account access by taking advantage of increased attention by 

consumers at tax time; and 

 An update on the housing market and available housing assistance. 

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Members also reported out on key challenges and opportunities for inclusion in their 

communities and/or for the organizations they represent. 

#GetBanked Public Awareness Campaign 

As part of its ongoing efforts to expand financial inclusion, in April, the FDIC launched a public 

awareness campaign about the benefits of opening a bank account. The first phase of the 

#GetBanked campaign focuses on the Houston and Atlanta areas, where research indicates 

that Black and Hispanic households are disproportionately unbanked. The goal of this 

targeted, pilot campaign is to support financial empowerment by encouraging consumers 

to consider opening a checking account that can result in access to safer and lower-cost 

financial products. 

The theme - “There’s a better way” – breaks down misconceptions about banks and helps 

people see how banks can help them meet their financial needs, potentially at a lower cost, 

and offer other benefits. The first phase of the campaign leveraged primarily®radio and 

streaming audio advertising, as well as digital display banners, streaming TV, and mobile video 

advertising. Ads are in English and Spanish, and encourage people to visit®the #GetBanked 

webpage and open a bank account. Coordinated internal activities, including collaborative 

events with Bank On Coalitions in pilot cities for consumers and banks, multiple account 

access events nationwide for consumers and banks, and a podcast with the Cities for Financial 

Empowerment Fund, support the campaign. 

The COVID-19 pandemic underscored the urgency of helping people with LMI gain access to 

the banking system. For consumers eligible to receive economic impact payments, Child 

Tax Credits, or a tax refund from the Internal Revenue Service (IRS), the FDIC leveraged the 

#GetBanked campaign to share information about how to open a bank account and provide 

that bank account information to the IRS. The FDIC also conducted outreach to banks and 

community-based organizations to enhance consumer access to financial services that would 

allow receipt of government payments directly and safely. 

During the pandemic, many banks offered ways to open accounts remotely – online or through 

a mobile app – without going to a bank branch. The FDIC’s #GetBanked webpage provided 

consumers with all the information needed to find a bank and open an account online. The 

webpage includes a video that discusses the importance of establishing and maintaining a 

banking relationship, a printable flyer describing the top reasons to open a bank account, and 

a checklist to help people identify the account that best meets their needs. 

The webpage and all related resources were translated into Spanish to assist Spanishspeaking consumers interested in opening a bank account. To increase the number of 

consumers with access to direct deposit, the IRS included a link to the FDIC’s #GetBanked 

webpage in its consumer education materials. By year-end, the FDIC’s resource pages on bank 

account access had received over 599,000 page views. 

The FDIC continues to support coalitions nationwide that share its commitment to expanded 

access to safe and affordable bank accounts. The number of financial institutions offering 

affordable and sustainable transaction accounts without overdraft fees has increased in 2021. 

Banks have found these accounts work for many customers, including those without a current 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

banking relationship. As of December 2021, 174 banks and credit unions offer affordable and 

sustainable transaction accounts that meet the Cities for Financial Empowerment Fund’s Bank 

On National Account Standards, including eight of the ten largest banks. 

Public Awareness of Deposit Insurance Coverage 

Throughout 2021, the FDIC continued its efforts to educate bankers and consumers about 

the rules and requirements for FDIC insurance coverage. As of December 31, 2021, the 

FDIC conducted four banker webinars for financial institution employees on deposit 

insurance coverage. The FDIC also provides resources, such as the Electronic Deposit 

Insurance Estimator (EDIE), a web-based calculator for estimating deposit insurance 

coverage. Furthermore, the FDIC offers a number of educational material and training 

videos targeted to both bankers and consumers through the FDIC’s public website. 

RULEMAKING AND GUIDANCE 

NPR on Deposit Insurance Simplification 

In July 2021, the FDIC issued a proposed rule to amend its regulations governing deposit 

insurance coverage. The proposal would provide depositors and bankers with a rule for trust 

account coverage that is easy to understand and would help to facilitate the prompt payment 

of deposit insurance in the event of a failure of an IDI with a large number of trust accounts. 

Specifically, the proposed rule would merge the revocable and irrevocable trust categories 

into one trust account category. A deposit owner’s trust deposits would be insured for up to 

$250,000 for each of the trust beneficiaries, not to exceed five, regardless of whether a trust 

is revocable or irrevocable. This would provide for a maximum amount of deposit insurance 

coverage of $1,250,000 per owner, per insured depository institution for trust deposits. 

The proposed rule also would provide consistent treatment for all mortgage servicing account 

balances held to satisfy principal and interest obligations to a lender. Accounts maintained 

by a covered mortgage servicer that consist of payments of principal and interest would be 

insured for the cumulative balance paid into the account in order to satisfy principal and 

interest obligations to the lender, regardless of whether paid directly by the borrower or by 

another party, up to $250,000 per mortgagor. 

The FDIC approved the final rule in January 2022. 

CRA Modernization 

In early 2021, the FDIC, FRB and OCC announced plans to work toward a joint rule to 

modernize the agencies’ regulations that implement the CRA.® On July 20th, the agencies 

issued a press release stating in part that they are “committed to working together to jointly 

strengthen and modernize regulations implementing the Community Reinvestment Act (CRA)” 

and “Joint agency action will best achieve a consistent, modernized framework across all 

banks to help meet the credit needs of the communities in which they do business, including 

low– and moderate-income neighborhoods.”® The Agencies are meeting regularly to discuss 

issues raised by commenters in response to the FRB’s CRA ANPR. ®The agencies plan to issue a 

notice of proposed rulemaking by March 2022. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 

MANAGEMENT’S DISCUSSION AND ANALYSIS 

Home Mortgage Disclosure Act (HMDA) 

In March 2021, the FDIC and other FFIEC 

members issued a revised version of 

A Guide to HMDA Reporting: Getting It 

Right. The 2021 version of the guide 

applies to HMDA data reported in 2022 

and incorporates amendments made 

to HMDA by the Dodd-Frank Act and 

the Economic Growth, Regulatory 

Relief, and Consumer Protection Act 

(EGRRCPA). The guide was designed 

to help financial institutions better 

understand the HMDA requirements, 

including data collection and reporting provisions. 

Interagency Questions and Answers Regarding Flood Insurance 

In February 2019, the FDIC, FRB, OCC, NCUA, and the Farm Credit Administration issued a 

final rule that implemented the private flood insurance provisions of the Biggert-Waters 

Flood Insurance Reform Act of 2012. In March 2021, the agencies issued a notice with a 

request for comment on proposed new interagency Q&As Regarding Private Flood Insurance. 

The proposal seeks to address mandatory acceptance of private flood insurance policies, 

discretionary acceptance of private flood insurance policies, and general compliance issues 

arising from the private flood insurance requirements. 

Proposed Rule Regarding False Advertising, Misrepresentations about Insured Status, 

and Misuse of the FDIC’s Name or Logo 

In April 2021, the FDIC issued a notice of proposed rulemaking implementing its statutory 

authority under 12 U.S.C. 1828(a)(4) to prohibit any person or organization from making 

misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo. The 

proposed rule would implement section 18(a)(4) of the FDI Act (Section 18(a)(4)), which 

prohibits any person or organization from: (1) making false or misleading representations 

about deposit insurance; (2) using the FDIC’s name or logo in a manner that would imply 

that an uninsured financial product is insured or guaranteed by the FDIC; or (3) knowingly 

misrepresenting the extent and manner of deposit insurance. The proposed rule is intended 

to provide transparency on the FDIC’s processes for investigating and resolving potential 

violations of these prohibitions. 

Updated Examination Procedures 

The FDIC approved changes to the Truth-in-Lending Act examination procedures on October 

22, 2021. The changes reflect recent amendments to the Qualified Mortgage rule that 

amended the sunset date of the temporary qualified mortgage definition for certain loans 

eligible for purchase or guarantee by the government-sponsored enterprises; amended the 

general qualified mortgage definition, primarily by replacing its 43 percent debt-to-income 

ratio limit with a limit based on the loan’s pricing; and created a new category of qualified 

mortgages, known as “seasoned qualified mortgages.” 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   

Home Mortgage data collection. 
 

MANAGEMENT’S DISCUSSION AND ANALYSIS 

Request for Information (RFI) on How to Modernize Sign and Advertising 

Requirements for Banks 

In February 2020, the FDIC published a RFI in the Federal Register seeking input regarding 

potential modernization of its official sign and advertising rules. The effort was suspended 

due to COVID-19. In April 2021, the FDIC published another RFI in the Federal Register to revisit 

the matter, with a new comment deadline of May 24, 2021. The FDIC has reviewed and is 

considering the feedback received from public commenters. 

Consumer Compliance Supervisory Highlights 

The latest issue of the FDIC Consumer Compliance Supervisory Highlights was released in 

March 2021. The purpose of this publication is to enhance transparency regarding the FDIC’s 

consumer compliance supervisory activities. The publication includes a high-level overview of 

consumer compliance issues identified by the FDIC during the prior year through the agency’s 

supervision of State nonmember banks and thrifts.® 

COMMUNITY AND SMALL BUSINESS DEVELOPMENT 

AND AFFORDABLE MORTGAGE LENDING 

The FDIC is committed to promoting community development, small business, and affordable 

mortgage lending in underserved communities. As of December 31, 2021, the FDIC’s 

Community Affairs staff had engaged with banks and community organizations through 

more than 240 outreach events. These events increased shared knowledge and supported 

collaboration among financial institutions and other community, housing, and small business 

development organizations. This collaborative outreach facilitated banks’ efforts to offer 

responsive, reasonably priced mortgages and small business loans to borrowers who 

otherwise might not have qualified for bank-sponsored loan products. 

Throughout 2021, the FDIC continued to promote community development partnerships and 

access to capital in historically underserved markets. Community development outreach 

events were held across all regions of the FDIC and spanned a wide variety of topics, including 

community and neighborhood stabilization, workforce development, and financial capability. 

The FDIC’s Community Affairs Program supports the FDIC’s mission to promote stability and 

public confidence in the nation’s financial system by encouraging economic inclusion and 

community development initiatives that broaden access to safe and affordable credit and 

deposit services from IDIs, particularly for LMI consumers and small businesses. The FDIC’s 

Affordable Mortgage Lending Center’s webpage houses various resources, including the 

Affordable Mortgage Lending Guide, a three-part manual designed to help community banks 

identify and access affordable mortgage products. The Affordable Mortgage Lending Center 

had more than 39,019 subscribers as of December 31, 2021. The webpage is located at https:// 

www.fdic.gov/consumers/community/mortgagelending/index.html. 

The CRA encourages banks to offer community development loans, investments, and services 

to help address the needs of LMI communities with respect to housing, community services, 

revitalization and stabilization of neighborhoods, and economic development. The FDIC, in 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

partnership with the FRB and OCC, hosted basic and advanced training sessions for bankers 

to enhance their understanding of the CRA and encourage them to pursue community 

development opportunities in their markets. In response to COVID-19, training sessions also 

focused on partnerships and activities that banks could engage in to support consumers and 

communities adversely impacted by the pandemic. 

The agencies also offered basic CRA training for community-based organizations, as well as 

seminars on establishing effective bank and community collaborations. Finally, the FDIC 

hosted examiner listening sessions with local community-based organizations designed to 

help examiners better understand®local community credit needs and opportunities for bank 

CRA and community development partnerships. 

FINANCIAL LITERACY AND EDUCATION 

Advancing Financial Education 

Financial education is central to the FDIC’s efforts to expand economic inclusion and promote 

confidence in the banking system. Effective financial education helps people gain the skills 

and confidence necessary to sustain a banking relationship, achieve financial goals, and 

improve financial well-being. 

Through the Money Smart suite of curricula, the FDIC offers banks and community-based 

organizations non-copyrighted, high-quality, free financial education training resources 

designed to meet the financial education needs of consumers of all ages and small business 

owners. Money Smart materials are available in multiple languages, Braille, and large print. 

Self-paced products complement instructor-led tools delivered via video conferencing and 

in person. To incorporate user feedback, regulatory changes, and evolving instructional best 

practices, the FDIC updates Money Smart materials regularly. 

Money Smart Improvements 

In September 2021, the FDIC launched an exciting new tool to help people learn more about 

money. How Money Smart Are You? is a next-generation, self-paced Money Smart product that 

allows consumers to engage 

with financial education from 

anywhere and empowers 

them to learn how to better 

control their finances and 

better protect and manage 

their money. 

How Money Smart Are You? 

features 14 new games. The 

games allow users to win virtual 

coins for correct answers and 

potentially earn a Certificate New Interactive Tool “How Money Smart Are You” of Completion for each game. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

Users can complete banking crosswords, minimize the debt monster, balance assets and 

liabilities, escape the room, discover the combination lock, choose sense or nonsense, 

and more. 

Besides the 14 games, users can access interactive tools and links to learn more about each 

topic. These tools include: 

 Get Ready to Borrow Money, 

 Calculate My Net Worth, 

 Decide if I’m Ready to Buy a Home, and 

 Stay Focused on My Goals. 

This latest addition to the Money Smart product family provides practical knowledge and 

helps build financial skills to manage your finances with confidence. 

The FDIC also released an updated version of Money Smart for Older Adults in collaboration 

with the CFPB. The enhanced version includes a new section to help people avoid romance 

scams and an updated resource guide. Romance scams commonly occur when a scammer 

creates a fake profile on a dating site or app, strikes up a relationship with a target, and asks 

for money. The enhancements to Money Smart for Older Adults are based on stakeholder 

feedback and recent research conducted by the FDIC and CFPB for this collaborative effort. 

The enhancements included the release of a new informational brochure on COVID-19-related 

scams. 

A peer-reviewed article, “The Money Smart for Older Adults Program: A Qualitative Study of 

the Participants’ Financial Well-Being,” appeared in the Journal of Gerontological Social Work 

(Volume 64, 2021 - Issue 2) in 2021. Participants in the study reported the curriculum helped 

them increase awareness of their financial well-being and supported their financial decisionmaking. The authors encourage gerontological social workers to promote the program, while 

concluding that the Money Smart curriculum “is potentially the only option for those who are 

un- or under-banked and have limited access to private financial services.” 

Outreach Highlights 

Youth employment programs offer a unique opportunity to reach out to young people 

with information about how banks can help them achieve their financial goals. The FDIC 

has continued its efforts with federal agencies and other organizations to foster more 

collaboration between banks and youth workforce providers that result in young people 

receiving financial education and an opportunity to easily open a bank account. For example, 

FDIC worked with banks and the City of Philadelphia to help facilitate the delivery of six 

financial empowerment sessions to more than 2,000 young people. The banks also offered 

accounts to the participants. Similarly, FDIC fostered a collaboration between a bank and 

an Orange County, CA, workforce program to conduct a financial education training series. 

The bank discussed the importance of opening a bank account and how to do so. The FDIC 

will continue this work into 2022. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

Other outreach highlights included collaborating with the CFPB in January 2021 to conduct 

a joint webinar that highlighted how the FDIC’s®Money Smart®financial education products 

and the CFPB’s®Your Money, Your Goals empowerment toolkit can be used together. A guest 

speaker from a nonprofit organization described their experience using both products, 

particularly during tax time. Other webinars, including several conducted in conjunction with 

racial equity initiatives, helped financial institutions learn how to use Money Smart for Adults. 

FDIC also collaborated with NCUA on national webinars on April 27 and November 16, 2021, 

that aimed to increase collaboration between financial institutions and workforce providers 

to help young people obtain financial education and open bank accounts. As a result of the 

first webinar, the FDIC was able to connect two youth employment programs with financial 

institutions, which resulted in the launch of new programs. 

The FDIC continued its support of savings initiatives, including through the America Saves 

program. The FDIC played a leadership role in the America Saves initiative, including by 

leading the Los Angeles Saves initiative and serving on the America Saves Week advisory group. 

More than 285,000 people set up or increased automated savings plans (based on responses 

from 6 percent of the participating organizations) in 2021. From their survey of participating 

financial institutions, America Saves reported that more than $158 million was deposited into 

new or existing savings accounts during the week.® 

Starting in July 2021, the FDIC began to publish Money Smart News monthly, rather than 

quarterly. Editions of the newsletter highlight Money Smart success stories, including how 

Money Smart can be delivered virtually. For example, the July edition highlighted a bank’s tips 

for other financial educators based on its experience with Money Smart for Small Business. 

The bank reported that delivering Money Smart to local start-ups and businesses less than 

three years old resulted in an increase in small business loans. The August edition highlighted 

Money Smart’s pivotal role with a program designed to help people stay in their homes. Money 

Smart News is circulated to more than 92,000 subscribers every month. 

This year, the FDIC hosted a banker roundtable to introduce the Wisconsin Task Force 

of Homeownership to banks. As a result, two banks now®serve®on®the Foreclosure 

Prevention®Loan®Fund®Committee®sponsored®by the Wisconsin County Treasurer’s 

Association and Wisconsin Rural Housing (WRH). The WRH was awarded a $700,000 grant 

to®start a foreclosure prevention loan fund,®which benefitted five counties serving LMI rural 

communities, including Native American homeowners in Wisconsin. 

Technical assistance provided to the Bank On Connecticut Coalition helped three financial 

institutions complete the Cities for Financial Empowerment’s National Account Standards 

certification process. This will further enhance the Bank On Connecticut Coalition’s suite of 

product offerings aimed to connect more residents with a wide variety of safe and affordable 

bank accounts readily available across Connecticut. These three banks have also become 

regular and active members of the Bank On Connecticut Coalition working on account 

access initiatives. 

Through the Spanish-Speaking Communities Initiative in 2020 and 2021, more than $4 

million in affordable small-dollar loans was provided to more than 200 Spanish-speaking 

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entrepreneurs and households. Financial literacy resources were provided to approximately 

500 households, and hundreds of new banking relationships were established with previously 

unbanked Latinos in California, Nevada, and Utah. 

The Los Angeles Alliance for Economic Inclusion Volunteer Income Tax Assistance volunteers 

(VITA) Program delivered 2,615 hours of qualified community development services during 

the pandemic, facilitating critical financial support for LMI households, which resulted in an 

estimated 2,600 households receiving assistance in filing their 2020 tax returns. This effort 

helped Los Angeles VITA tax-filers secure their tax refunds, Economic Impact Payments, and 

prepared qualified filers for the receipt of Child Tax Credits payments. 

FDIC Consumer News 

The FDIC Consumer News is a monthly publication that provides practical guidance on how to 

become a smarter, safer user of financial services. The FDIC published 13 issues in 2021, which 

included a Special Edition on the difficulty with paying mortgages for consumers impacted by 

the pandemic. Selected articles define financial terms, offer helpful hints, resources, quick 

tips, and common-sense strategies to protect and stretch consumers’ hard-earned dollars. 

The FDIC promotes Consumer News on four social media platforms, provides English and 

Spanish printable versions, and has more than 138,000 subscribers nationwide. 

Partnerships for Access to Mainstream Banking 

Across the country, the FDIC supported community development and economic inclusion 

partnerships at the local level by providing technical assistance and information resources, 

with a focus on unbanked households and LMI communities. Community Affairs staff 

advanced economic inclusion through FDIC-led Alliances for Economic Inclusion (AEI), as 

well as other local, state, and regional coalitions that promote collaboration among financial 

institutions, federal agency partners, and local nonprofits, including Bank On, United Way, 

industry trade groups, and foundations. Further, the FDIC worked with other financial 

regulatory agencies to provide information and technical assistance to banks and community 

leaders across the country. 

Due to the public health impact of COVID-19, Community Affairs’ outreach activities were 

conducted via online platforms during 2021. As of December 31, 2021, the FDIC hosted over 

240 events, providing opportunities for banks to collaborate with partners on increasing 

consumer access to bank accounts and credit services; develop collaborative CRA strategies; 

expand partnerships to address the community impacts of COVID-19 and social justice 

issues; identify opportunities for consumers to build savings and improve credit histories; 

and participate in initiatives that strengthen the capability of community service providers 

that directly serve LMI consumers and small businesses. Through these events and other 

activities, the FDIC also raised awareness of pandemic-driven scams, as well as state and local 

assistance and recovery programs. 

In 2021, the FDIC held 25 webinars in support of AEI coalitions in Austin, Boston, Houston, 

Los Angeles, Milwaukee, Mississippi, Southeast Michigan, and Southeast Louisiana. The FDIC 

currently manages 12 AEI coalitions, which support working groups of bankers and community 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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leaders responding to the financial 

capability and services needs in their 

communities in various parts of the 

country. Twelve webinars featured 

the FDIC’s #GetBanked resources 

and discussed strategies to connect 

consumers to safe and affordable bank 

accounts. In June, the Austin AEI held 

a webinar focused on empowering 

women and families through innovative 

financial services and discussed 

opportunities to support access to 

education, childcare, healthcare, and 

housing. The Los Angeles AEI held 

a webinar in June that focused on 

available resources to help mitigate the impact of the COVID-19 pandemic, specifically for 

rental assistance and homeownership. In October, the Milwaukee AEI partnered with the Bank 

of Greater Milwaukee on a webinar during which experts shared best practices on improving 

the financial resilience of immigrant and refugee communities through financial education 

and access to safe, affordable bank accounts. 

CONSUMER COMPLAINTS AND INQUIRIES 

In May 2021, the FDIC’s Deposit Insurance Section merged with the Consumer Response 

Center, creating the National Center for Consumer and Depositor Assistance (NCDA). The 

NCDA is comprised of staff on the East and West coasts, with a centrally located hub in the 

Kansas City Regional Office. The NCDA fulfills two mission-critical functions for the FDIC: (1) 

investigating and responding to consumer complaints and inquiries involving FDIC-supervised 

institutions; and (2) promoting public awareness and understanding of FDIC deposit insurance 

coverage and ensuring depositors and bankers have ready access to information regarding 

deposit insurance rules and requirements. 

The FDIC’s NCDA helps consumers by receiving, investigating, and responding to consumer 

complaints about FDIC-supervised institutions and answering inquiries about federal 

consumer banking laws and regulations, FDIC operations, and other related topics. Assessing 

and resolving these matters helps the agency identify trends or problems affecting consumer 

rights, understand the public perception of consumer protection issues, formulate policy that 

aids consumers, and foster confidence in the banking system. 

The FDIC publishes an annual report on its Transparency & Accountability webpage regarding 

the nature of the FDIC’s interactions with consumers and depositors and also regularly 

updates its performance metrics on its handling of requests from the public for FDIC 

assistance. The webpage can be found at www.fdic.gov/transparency/consumers.html. 

FDIC held 25 webinars in support of Alliance for 

Economic Inclusion (AEI) Coalitions. 

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17,714 

Consumer Complaints 

by Topic and Issue 

In 2021, the FDIC’s Consumer 

Response Center (CRC) handled 17,714 

written and telephonic complaints 

and inquiries. Of the 14,236 involving 

written correspondence, 5,710 were 

referred to other agencies. The FDIC 

handled the remaining 8,526. 

24% 

checking accounts 

$ 

16% 

consumer lines of 

credit/installment 

loans 

23% 

consumer/business 

credit cards 

8% 

residential 

real estate loans 

$1,292,200 

in refunds and voluntary compensation 

as a result of FDIC’s assistance. 

Consumer Complaints by Topic and Issue 

As noted above, in 2021, the FDIC processed 17,714 written and telephonic complaints and 

inquiries. Of the 14,236 involving written correspondence, 5,710 were referred to other federal 

banking agencies. The FDIC handled the remaining 8,526. The FDIC responded to 99 percent of 

written complaints within time frames established by corporate policy and acknowledged 100 

percent of all consumer complaints and inquiries within 14 days. 

The most commonly identified topics in consumer complaints and inquiries about 

FDIC-supervised institutions, as a percent of total volume, included checking accounts 

(24 percent), credit cards (23 percent), consumer lines of credit/installment loans (16 percent), 

and residential real estate loans (8 percent). The FDIC helped consumers receive more than 

$1,292,200 in refunds and voluntary compensation from financial institutions as a result of the 

assistance provided by the FDIC. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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An important part of the FDIC’s deposit insurance mission is to ensure that bankers and 

consumers have access to accurate information about the FDIC’s rules for deposit insurance 

coverage. Through December 2021, the FDIC Contact Center handled 60,724 telephone cases 

of which 14,593 were identified as deposit insurance-related inquiries. In addition to the 

telephone inquiries, the FDIC received 723 written deposit insurance inquiries from consumers 

and bankers. Of these inquiries, 100 percent received responses within two weeks, as required 

by corporate policy. The NCDA’S Deposit Insurance Unit helps depositors identify potentially 

fraudulent websites posing as legitimate FDIC-insured institutions. Through December 2021, 

the FDIC identified and took appropriate action on more than 100 websites, some of which 

included the Member FDIC logo, but were not operated by FDIC-member banks. 

In March 2020, the FDIC began tracking incoming complaints and inquiries regarding 

the COVID-19 pandemic by adding specific keywords to case files. Keywords included 

“Coronavirus 2020” to track general concerns regarding the pandemic; “IRS Stimulus CSR” to 

track concerns related to the Economic Impact Payments; “SBA-CARES Act” to track business 

owners’ concerns and issues involving the SBA’s PPP, and “CARES Act Provisions” to track the 

cases involving specific provisions of the CARES Act that are not SBA or PPP related. Through 

December 31, 2021, the FDIC closed 1,305 written complaints and inquiries tagged with one 

or more of these key words. The following keywords, by count, were identified among the 

1,305 case files: Coronavirus 2020 (1,254), IRS Stimulus CSR (329), SBA-CARES Act (272), and 

CARES Act Provisions (351). Additionally, 123 of the cases noted loan modification inquires or 

concerns and 35 noted inquiries related to the foreclosure process. 

Failure Resolution and 

Receivership Management 

The Division of Resolutions and Receiverships is responsible for resolving the failure of IDIs 

with assets under $100 billion. When an IDI fails, the chartering authority typically appoints 

the FDIC as receiver. The FDIC employs a variety of strategies to ensure the prompt payment 

of deposit insurance to insured depositors and to provide for the least costly resolution 

transaction to the DIF. No depositor has ever experienced a loss on their insured funds as a 

result of a bank failure. 

FINANCIAL INSTITUTION FAILURES 

During 2021, there were no insured institution failures. This is the first calendar year since 

2018 during which no federally insured institutions failed. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

The following chart provides a comparison of failure activity over the past three years. 

Failure Activity 

Dollars in Billions 

2021 2020 2019 

Total Institutions 0 4 4 

Total Assets of Failed Institutions* $0 $0.5 $0.2 

Total Deposits of Failed Institutions* $0 $0.4 $0.2 

Estimated Loss to the DIF $0 $0.1 $0.03 

*Total assets and total deposits data are based on the last quarterly report filed by the institution prior to 

failure. 

RECEIVERSHIP MANAGEMENT ACTIVITIES 

As part of the receivership process, the FDIC as receiver manages failed IDIs and their 

subsidiaries with the goal of expeditiously winding up their affairs. Assets not sold to an 

assuming institution through the resolution process are retained by the receivership and 

promptly valued and liquidated through different sales channels – cash sales, securitizations, 

and joint venture transactions – to maximize the return to the receivership estate. 

Because of the FDIC’s asset marketing and collection efforts, the book value of assets in 

inventory decreased by $190.5 million (67.4 percent) in 2021. Total assets in liquidation 

continued a downward trend, resulting in a total book value of $92.1 million at the end of 2021. 

The following chart shows the year-end balances of assets in liquidation by asset type. 

Assets in Liquidation Inventory by Asset Type 

Dollars in Millions 

Asset Type 12/31/21 12/31/20 12/31/19 

Securities $7 $10 $10 

Consumer Loans 0 0 0 

Commercial Loans 2 6 1 

Real Estate Mortgages 2 3 19 

Other Assets/Judgments 18 24 44 

Owned Assets 0 1 3 

Net Investments in Subsidiaries 20 20 31 

Structured and Securitized Assets 43 219 416 

TOTAL $92 $283 $524 

Proceeds generated from asset sales and collections are used to pay receivership claimants, 

including depositors whose accounts exceeded the insurance limit. During 2021, receiverships 

paid dividends of $536,000 to depositors whose accounts exceeded the insurance limit. 

In 2021, DRR successfully terminated the ten remaining Shared Loss Agreements. These 

terminations mark the end of a program that was used extensively during the last crisis and 

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MANAGEMENT’S DISCUSSION AND ANALYSIS 

was highly effective in mitigating losses on $216 billion in loans and other assets covered 

under these agreements. 

During 2021, DRR continued to make significant progress removing impediments to 

receivership terminations, including clearing 355 of 966 impediments and terminating 

43 of 234 active receiverships. Despite this progress, DRR was unable to meet the annual 

performance target to terminate 75 percent of new receiverships that are not subject to 

Shared Loss Agreements, structured transactions, or other legal impediments within three 

years of the date of failure. Given the reduction in failure activity and considering the longterm nature of the legal impediments on recent failures, only four receiverships met the 

criteria for the annual performance target. DRR terminated one of the four receiverships 

in 2021 and started the termination process for a second that is projected to terminate in 

February 2022. The remaining two receiverships, from banks that failed in 2019, contained 

impediments that prevented them from being terminated during 2021. 

The following chart shows overall receivership activity for the FDIC in 2021. 

Receivership Activity 

Active Receiverships as of 12/31/20 234 

New Receiverships 0 

Receiverships Terminated 43 

Active Receiverships as of 12/31/21 191 

Professional Liability and Financial Crimes Recoveries 

The FDIC investigates bank failures to identify potential claims against directors, officers, 

securities underwriters and issuers, fidelity bond insurance carriers, appraisers, attorneys, 

accountants, mortgage loan brokers, title insurance companies, and other professionals who 

may have caused losses to insured depository institutions that failed. The FDIC will pursue 

meritorious claims that are expected to be cost effective. 

During 2021, the FDIC recovered $35.1 million 

from professional liability claims and settlements. During 2021, the

The FDIC authorized one professional liability FDIC recovered 

lawsuit during 2021. As of December 31, 2021, 

the FDIC’s caseload included nine professional $35.1 million 

liability lawsuits (down from 10 at year-end 2020), from professional four residential mortgage malpractice and fraud 

lawsuits (down from eight at year-end 2020), and liability claims open investigations in six claim areas out of four 

institutions. The FDIC completed investigations and settlements. 

and made decisions on 96 percent of the 

investigations related to the five failures that reached the 18-month point in 2021 after the 

institutions’ failure dates, exceeding the annual performance target. 

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As part of the sentencing process, for those convicted of criminal wrongdoing against an 

insured institution that later failed, a court may order a defendant to pay restitution or to 

forfeit funds or property to the receivership. The FDIC, working with the U.S. Department of 

Justice in connection with criminal restitution and forfeiture orders issued by federal courts 

and independently in connection with restitution orders issued by the state courts, collected 

$6.8 million in 2021. As of December 31, 2021, there were 1,753 active restitution and forfeiture 

orders (down from 1,909 at year-end 2020). This includes 19 orders held by the Federal 

Savings and Loan Insurance Corporation (FSLIC) Resolution Fund (i.e., orders arising out of 

failed financial institutions in receivership or conservatorship by the FSLIC or the Resolution 

Trust Corporation). 

Information Technology 

Information Technology (IT) is an essential component in virtually all FDIC business processes. 

This integration of IT with the business provides opportunities for efficiencies and requires 

an awareness of potential risks. In 2021, the Chief Information Officer Organization (CIOO) 

focused its efforts on modernizing FDIC applications and systems to support business process 

implementations and key stakeholders, strengthening infrastructure resiliency, and managing 

information security risk. 

Modernizing IT and Enhancing Data Governance 

The FDIC continues to provide a robust, resilient, and secure IT infrastructure that promotes 

efficient operations, applies modern approaches for the use and protection of data, and 

improves the effectiveness of the FDIC’s engagement with regulated institutions. As part of 

this commitment, in 2021, the FDIC continued implementing the multi-year, comprehensive IT 

modernization effort focusing on application and data modernization initiatives identified in 

the IT Modernization Roadmap. In support of this commitment, the CIOO: 

 Deployed iterative parts of the Structure Information Management System 

Redesign Release 3; 

 Completed an analysis to identify the best path forward for RMS Business Process 

Modernization; 

 Retired and decommissioned legacy Sun Solaris Unix servers; 

 Implemented Release 3 of the Resolution and Receivership Management Portal; 

and 

 Completed release 1 of the Framework for Oversight of Compliance and CRA 

Activities User Suite. 

The FDIC also continues to mature its data governance program. For example, the CIOO 

developed a new test data management solution in 2021, whereby synthetic or obfuscated 

data were used to test selected FDIC systems in a non-production environment. The CIOO 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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plans to mature and expand its capabilities in the area of data testing and data governance 

though various initiatives, such as promoting data literacy and migrating data to the cloud. 

Strengthening Infrastructure Resiliency 

The FDIC continues to concentrate on implementing effective strategies and solutions to 

enhance infrastructure security and resiliency. In support of the continued effort to improve 

resiliency and ensure the FDIC can continue to meet its mission in the face of emergencies or 

disasters, the CIOO took actions in three key areas: 

Support COVID-19 Requirements 

 Implemented facilities access requests to track and manage physical access to 

FDIC buildings and offices during the pandemic; and 

 Released a ServiceNow-based COVID-19 vaccine attestation solution that captures 

documentation and supports reasonable accommodation requests in response to 

the COVID-19 Vaccine Executive Order. 

Ongoing Infrastructure Resiliency Enhancements 

 Developed a Surge Playbook to address IT requirements related to financial crisis 

preparedness. 

Mission Sustainment 

 Implemented a self-service password reset solution; and 

 Released a new remote access Virtual Private Network software, GlobalProtect, 

which provides faster connectivity and enhanced security protection. 

Managing Information Security Risk 

The FDIC continues to place great emphasis on its risk management obligations, including 

identifying, assessing, and developing strategies to mitigate information security threats. 

Among a range of actions, in 2021, the FDIC: 

 Actively managed information security, privacy, and other priority risks. The 

Information Technology Risk Advisory Council met regularly to discuss progress 

made with risk mitigation strategies, update risks in the CIOO risk inventory, and 

review Key Risk Indicators. 

 Completed corrective actions to address internal control recommendations, 

strengthened internal controls, and addressed 13 audit recommendations 

subsequently closed by the FDIC’s Office of the Inspector General (OIG). This 

included eight audit recommendations from the 2020 OIG Federal Information 

Security Modernization Act (FISMA) audit report and the OIG 2019 Privacy Audit 

report. 

 Integrated information security and privacy into procurements, including 

updating a Checklist for Information Security and Privacy Contract Provisions 

and Clauses. 

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 Updated the Privacy Program with the Privacy Continuous Monitoring Strategy 

and Privacy Control Assessments. 

Hybrid Work Environment 

 Continued foundational implementation of a hybrid work environment by 

updating conference room equipment in FDIC headquarters and publishing a 

webpage on facilitating hybrid work. 

The continued corporate-wide focus on managing information security risks through a host of 

projects and initiatives had a positive impact. In its 2021 audit required by the FISMA, the OIG 

determined that the FDIC’s information security program was operating at a Maturity Level 

4 (out of 5). Within the context of the maturity model, a Level 4, “Managed and Measurable,” 

information security program is operating at an “Effective” level of security.4 

International Outreach 

The FDIC continues to play a leading role in supporting the global development of deposit 

insurance, bank supervision, and bank resolution systems. In 2021, this included working 

closely with regulatory and supervisory authorities from around the world, as well as 

international standard-setting bodies and multilateral organizations, such as the International 

Association of Deposit Insurers (IADI), the Association of Supervisors of Banks of the Americas 

(ASBA), the Basel Committee on Banking Supervision (BCBS), the Financial Stability Board 

(FSB), the International Monetary Fund (IMF), and the World Bank. The FDIC engaged with 

foreign regulatory counterparts by virtually hosting foreign officials, conducting training 

seminars, delivering technical assistance, and fulfilling the commitments of FDIC membership 

in international organizations. The FDIC also advanced policy objectives with key jurisdictions 

by participating in high-level interagency dialogues. 

International Association of Deposit Insurers 

FDIC officials and subject matter experts provided continuing support for IADI programs in 

2021, including the development of the 2022-2026 Strategic Plan. The FDIC chairs the Training 

and Technical Assistance Council Committee and the Fintech Technical Committee of IADI. 

The Fintech Technical Committee launched its Fintech Brief series in September 2021, with 

the FDIC contributing two briefs to the series. In addition, the FDIC chairs IADI’s Capacity 

Building Technical Committee, which, among other activities, provides support for developing 

and facilitating virtual workshops for the Africa, Asia-Pacific, Caribbean, European, Latin 

American, Middle East and North Africa, and North American regions of IADI. With leadership 

and support from FDIC executives and senior staff, IADI technical assistance and training 

activities reached 1,181 participants. The FDIC also contributed to IADI papers on contingency 

planning and coverage. 

4

 NIST Special Publication (SP) 800-53, Rev. 4, Security and Privacy Controls for Federal Information Systems and 

Organizations, defines security control e3ectiveness as the extent to which the controls are implemented correctly, 

operating as intended, and producing the desired outcome with respect to meeting the security requirements for 

the information system in its operational environment or enforcing/mediating established security policies. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MANAGEMENT’S DISCUSSION AND ANALYSIS 

Association of Supervisors of Banks of the Americas 

Senior FDIC staff chaired the ASBA Training Committee in 2021, which designs and implements 

ASBA’s training strategy to promote the adoption of sound banking supervision policies and 

practices among its members. The FDIC also participated in development of the 2022-2025 

Strategic Plan. Due to COVID-19, the on-site training programs were canceled for the year; 

however, many courses were able to be converted to virtual events. The training program 

reached 115 member participants in 2021. 

Basel Committee on Banking Supervision 

The FDIC supports and contributes to the development of international standards, guidelines, 

and sound practices for prudential regulation and supervision of banks through its 

longstanding membership in the BCBS. The FDIC’s contributions include actively participating 

in many of the committee groups, working groups, and task forces established by the BCBS 

to carry out its work, which focuses on policy development, supervision and implementation, 

accounting, and consultation. Particular areas of focus are capital policy, accounting, 

operational risk, stress testing, and anti-money laundering. 

International Capacity Building 

Due to COVID-19-related restrictions, the FDIC’s in-person direct assistance programs were 

canceled or postponed in 2021. However, the FDIC was able to provide technical expertise 

to many foreign organizations through the use of virtual technology. These engagements 

included supplying staff experts to provide training for the Deposit Insurance Fund of Kosovo 

on insurance fund thresholds, the Indonesia Deposit Insurance Fund on bank resolution 

matters, and the Philippines Deposit Insurance Corporation on deposit insurance target 

ratios. In addition, the FDIC conducted numerous virtual routine visits, most notably with 

the Canada Insurance Deposit Corporation five times during the year on topics related to 

deposit Insurance and resolution matters. Likewise, the FDIC conducted visits with the 

European Central Bank on communication best practices, the Government of Brazil on 

equity partnerships, the Azerbaijan Deposit Insurance Fund on resolution matters, and the 

Taiwan Financial Supervisory 

Commission on the Industrial 

Loan Company (ILC) rule. 

Finally, the FDIC conducted 

its first Virtual 101, a 4-day 

virtual classroom event that 

provides an overview of bank 

supervision, deposit insurance, 

and resolutions, and was 

attended by 112 attendees from 

35 countries and 42 separate 

organizations, including deposit 

insurers from around the globe. Virtual 101 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
MANAGEMENT’S DISCUSSION AND ANALYSIS 

Effective Management 

of Strategic Resources 

The FDIC recognizes that it must effectively manage its human, financial, and technological 

resources to successfully carry out its mission and meet the performance goals and targets 

set forth in its annual performance plan. The FDIC must align these strategic resources with 

its mission and goals and deploy them where they are most needed to enhance its operational 

effectiveness and minimize potential financial risks to the DIF. Following are the FDIC’s major 

accomplishments in improving operational efficiency and effectiveness during 2021. 

Human Capital Management 

The FDIC’s human capital management programs are designed to attract, train, develop, 

reward, and retain a highly skilled, diverse, and results-oriented workforce. In 2021, the FDIC 

workforce-planning initiatives emphasized the need to plan for employees to fulfill current 

and future capability and leadership needs. This focus ensures that the FDIC has a workforce 

positioned to meet today’s core responsibilities and prepared to fulfill its mission in the 

years ahead. 

Strategic Workforce Planning and Readiness 

The FDIC understands that succession planning is critical to ensure that gaps in employee 

aspiration, engagement, and readiness for senior leadership and technical positions are 

addressed. The FDIC dedicates resources to strengthen and expand its internal pipeline of 

employees who aspire to higher-level positions, have the necessary leadership and technical 

skills, and are prepared to assume future leadership roles. 

The FDIC conducted targeted workforce and succession-planning initiatives in mission-critical 

functions to ensure it has the workforce and leadership capabilities needed in a dynamic 

environment. The agency engaged in defining the capabilities required of subject matter 

experts in mission-critical roles to plan future recruitment, professional development, and 

retention strategies and inform human capital investments. In 2021, individual divisions and 

offices continued to plan and implement succession-planning activities tailored to address 

their unique workforce and leadership capacity needs in evolving conditions. The FDIC 

also launched a Retention Management Working Group to enhance the availability of 

data and analyses to ensure that the FDIC remains focused and effective in managing and 

retaining talent. 

During the past few years, the FDIC has witnessed an uptick in retirements among its 

management and leadership ranks, requiring a greater emphasis on knowledge transfer 

and long-term succession planning. Additionally, RMS had a higher level of attrition in its 

examiner ranks during 2021 than in 2020. To ensure that critical skills are sustained, the FDIC 

is developing new career paths that encompass emerging skills, while offering leadership 

training and career development opportunities designed to increase the internal candidate 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MANAGEMENT’S DISCUSSION AND ANALYSIS 

pool of potential leaders at all levels. The FDIC is also undertaking innovative approaches 

to attract and retain a new generation of entry-level examiners with specialty and 

emerging skillsets. 

Through these efforts, the FDIC workforce will be even better positioned to respond to 

dynamic financial and technological challenges, now and in the future.® 

Employee Learning and Development 

The FDIC has a robust program to train and develop its employees throughout their careers 

to enhance technical proficiency and leadership capacity, supporting career progression and 

succession management. The FDIC is in the midst of a multi-year effort to modernize learning 

and development, including expanding virtual and online offerings, integrating modern 

learning technology, and modernizing the FDIC’s Training Center. 

The FDIC develops and implements comprehensive curricula for its business lines to prepare 

employees to meet new challenges. Employees working to become commissioned examiners 

or resolutions and receiverships specialists attend a prescribed set of specialized, internally 

developed and instructed courses. Post-commission, employees continue to further their 

knowledge in specialty areas with more advanced courses. The FDIC is revising examiner 

classroom training to better support on-the-job application and has developed a 

wide-ranging resolution and receivership training curriculum 

to support readiness. 

The FDIC also offers a comprehensive 

leadership development program 

that combines core courses, electives, 

and other enrichment opportunities 

to develop employees at all levels, 

and support succession planning 

and diversity, equity, inclusion, 

and accessibility goals. From new 

employees to new executives, the 

FDIC provides employees with 

targeted opportunities that align 

with key leadership competencies. In 

addition to a broad array of internally 

developed and administered courses, 

the FDIC provides its employees with 

funds to participate in external training to support their career development. 

In 2021, the FDIC’s Corporate University continued to convert courses to virtual delivery and 

support employee learning and development during mandatory telework. More than 360 

virtual course offerings were delivered to more than 9,100 participants. 

Virtual Courses. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
MANAGEMENT’S DISCUSSION AND ANALYSIS 

Employee Engagement 

The FDIC continually evaluates its human capital programs and strategies to ensure that it 

remains an employer of choice, and that all of its employees are fully engaged and aligned 

with the mission. The FDIC uses the Federal Employee Viewpoint Survey mandated by 

Congress to solicit feedback from employees and takes an agency-wide approach to address 

key issues identified in the survey. The FDIC consistently scores highly in all categories of the 

Partnership for Public Service Best Places to Work in the Federal Government® list for mid-size 

federal agencies. Effective leadership is the primary factor driving employee satisfaction and 

commitment in the federal workplace, according to a report by the Partnership for Public 

Service. 

The FDIC engages employees through formal mechanisms such as the TEAM (Transparency, 

Empowerment, Accountability, Mission) FDIC initiative that empowers employees to identify 

and implement short-term projects that positively impact the FDIC workplace and support 

the FDIC’s mission; Chairman’s Diversity Advisory Councils; Employee Resource Groups; and 

informally through working groups, team discussions, listening sessions, and daily employeesupervisor interactions. Employee engagement plays an important role in empowering 

employees and helps maintain, enhance, and institutionalize a positive workplace 

environment. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PAGE INTENTIONALLY LEFT BLANK
II. 

PERFORMANCE 

RESULTS 

SUMMARY 
PAGE INTENTIONALLY LEFT BLANK
ANNUAL REPORT  91

1 

PERFORMANCE RESULTS SUMMARY 

Summary of 2021 Performance 

Results by Program 

The FDIC successfully achieved 35 of the 47 annual performance targets established in its 2021 Annual 

Performance Plan. One target was substanially achieved, four targets were not achieved and seven 

targets were not applicable for 2021. There were no instances in which 2021 performance had a material 

adverse effect on the successful achievement of the FDIC’s mission or its strategic goals and objectives 

regarding its major program responsibilities. 

Performance Results by 

Program and Strategic Goal 

 Insurance Program Results 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

 

Respond promptly to all Number of business 

IDI failures and related days aμer an IDI failure 

emerging issues. that depositors first 

have access to insured 

funds. 

Insured depositor 

losses resulting from 

an IDI failure. 

Depositors have access to insured NOT 

funds within one business day if the APPLICABLE. 

failure occurs on a Friday. NO FAILURE 

ACTIVITY 

IN 2021. 

SEE PG. 78. 

Depositors have access to insured NOT 

funds within two business days if APPLICABLE. 

the failure occurs on any other day NO FAILURE 

of the week. ACTIVITY 

IN 2021. 

SEE PG. 78. 

Depositors do not incur any losses NOT 

on insured deposits. APPLICABLE. 

NO FAILURE 

ACTIVITY 

IN 2021. 

SEE PG. 78. 

No appropriated funds are required NOT 

to pay insured depositors. APPLICABLE. 

NO FAILURE 

ACTIVITY 

IN 2021. 

SEE PG. 78. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  92

3 

PERFORMANCE RESULTS SUMMARY 

 Insurance Program Results (continued) 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

 

 

2 Disseminate data and 

analyses on issues 

and risks a ̈ecting 

the financial services 

Scope and timeliness 

of information 

dissemination on 

identified or potential 

industry to bankers, 

supervisors, the public, 

and other stakeholders 

issues and risks. 

on an ongoing basis. 

Disseminate results of research and 

analyses in a timely manner through 

regular publications, ad hoc reports, 

and other means. 

Undertake industry outreach 

activities to inform bankers and other 

stakeholders about current trends, 

concerns, available resources, and 

FDIC performance metrics. 

ACHIEVED. 

SEE PG. 52. 

ACHIEVED. 

SEE PG. 52. 

Monitor the status of 

the DIF reserve ratio 

and analyze the factors 

that a ̈ect fund growth. 

Adjust assessment 

rates, as necessary, to 

achieve a DIF reserve 

ratio of at least 1.35 

percent of estimated 

insured deposits by 

September 30, 2028. 

Updated fund balance 

projections and 

recommended changes 

to assessment rates. 

Update progress on 

the Restoration Plan 

and adjust the plan as 

necessary. 

Provide updated fund balance 

projections to the FDIC Board of 

Directors semiannually. 

Recommend changes to deposit 

insurance assessment rates to the 

FDIC Board of Directors, as necessary. 

Provide progress reports to the FDIC 

Board of Directors semiannually, in 

accordance with the Restoration Plan. 

ACHIEVED. 

SEE PG. 27. 

ACHIEVED. 

SEE PG. 27. 

ACHIEVED. 

SEE PG. 28. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  93

4 

PERFORMANCE RESULTS SUMMARY 

 Insurance Program Results (continued) 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

 

 

 

 

 

 

 

 

Expand and strengthen 

the FDIC’s participation 

and leadership role 

in supporting robust 

and e ̈ective deposit 

insurance programs, 

resolution strategies, 

and banking systems 

worldwide. 

Activities to expand Foster strong relationships with ACHIEVED. 

and strengthen international banking regulators, SEE PGS. 83-84. 

engagement with deposit insurers, and other relevant 

strategically important authorities by engaging with 

foreign jurisdictions strategically important jurisdictions 

and key international and organizations on international 

organizations and financial safety net issues. 

associations, and to 

advance the FDIC’s 

global leadership and 

participation on deposit 

insurance, institution 

supervision, resolution 

practices, and 

international financial 

safety net issues. 

Provide leadership and expertise to ACHIEVED. 

key international organizations and SEE PGS. 83-84. 

associations that promote sound 

deposit insurance and e3ective bank 

supervision and resolution practices. 

Provision of technical Promote international standards ACHIEVED. 

assistance and training and expertise in financial regulatory SEE PGS. 83-84. 

to foreign counterparts. practices and stability through the 

provision of technical assistance and 

training to global financial system 

authorities. 

5 Ensure timely 

consideration and 

Timeliness of review and 

disposition of deposit 

Act on 75 percent of deposit insurance 

applications within 120 days aμer 

NOT 

ACHIEVED. 

e ̈icient processing insurance applications. being accepted as substantially SEE PG. 59. 

of de novo deposit complete. 

insurance applications. 

6 Market failing IDIs to all 

qualified and interested 

Scope of qualified and 

interested bidders 

Contact all qualified 

and interested bidders. 

NOT 

APPLICABLE. 

potential bidders. solicited. NO FAILURE 

ACTIVITY 

IN 2021. 

SEE PG. 78. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  9¥ 

7 

PERFORMANCE RESULTS SUMMARY 

 Insurance Program Results (continued) 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

Provide educational 

information to IDIs and 

their customers to help 

them understand the 

rules for determining 

the amount of 

insurance coverage on 

deposit accounts. 

Timeliness of responses 

to deposit insurance 

coverage inquiries. 

Initiatives to increase 

public awareness of 

deposit insurance 

coverage changes. 

Respond within two weeks to 95 

percent of written inquiries from 

consumers and bankers about FDIC 

deposit insurance coverage. 

Conduct at least four virtual or 

in-person seminars for bankers on 

deposit insurance coverage. 

ACHIEVED. 

SEE PG. 76. 

ACHIEVED. 

SEE PG. 69. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  95

PERFORMANCE RESULTS SUMMARY 

2021 Supervision Program Results 

Strategic Goal: FDIC-insured institutions are safe and sound. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

 

 

 

 

 

 

 

 

 

 

Conduct on-site  risk management 

examinations to assess 

the overall financial 

condition, management 

practices and policies, 

and compliance with 

applicable laws and 

regulations of FDICsupervised depository 

institutions. When 

problems are identified, 

ensure IDIs promptly 

implement appropriate 

corrective programs 

and follow up to ensure 

that identified problems 

are corrected. 

Percentage of required 

examinations conducted 

in accordance with 

statutory requirements 

and FDIC policy. 

Follow-up actions on 

identified problems. 

Conduct all required risk management 

examinations within the timeframes 

prescribed by statute and FDIC policy. 

For at least 90 percent of IDIs that are 

assigned a composite CAMELS rating 

of 2 and for which the examination 

report identifies “Matters Requiring 

Board Attention” (MRBAs), review 

progress reports and follow up with 

the institution within six months of the 

issuance of the examination report 

to ensure that all MRBAs are being 

addressed. 

ACHIEVED. 

SEE PG. 28. 

ACHIEVED. 

SEE PGS. 29-30. 

 Assist in protecting 

the infrastructure 

of the U.S. banking 

system against terrorist 

financing, money 

laundering, and other 

financial crimes. 

Percentage of required 

examinations conducted 

in accordance with 

statutory requirements 

and FDIC policy. 

Conduct all BSA examinations within 

the timeframes prescribed by statute 

and FDIC policy. 

ACHIEVED. 

SEE PG. 28. 

 Establish regulatory 

capital standards that 

ensure institutions 

have su ̈icient lossabsorbing capacity to 

remain resilient under 

U.S. implementation of 

internationally agreed 

capital standards and 

other capital standards 

for large institutions. 

Issue a Notice of Proposed Rulemaking 

(NPR) to implement the final Basel 

III standards into the U.S. regulatory 

capital framework. 

NOT 

ACHIEVED. 

SEE PGS. 41-42. 

stress while reducing 

complexity and 

maximizing e ̈iciency. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  96

PERFORMANCE RESULTS SUMMARY 

2021 Supervision Program Results (continued) 

Strategic Goal: FDIC-insured institutions are safe and sound. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

 

 

 

 

 

Implement strategies ¥ to promote enhanced 

cybersecurity and 

business continuity 

within the banking 

industry. 

Enhance the 

cybersecurity 

awareness and 

preparedness of the 

banking industry. 

Continue to conduct horizontal 

reviews that focus on the IT risks 

in large, complex institutions and 

service providers. 

Continue to use the Cybersecurity 

Examination Program for service 

provider examinations, including 

the most significant service provider 

examinations. 

Implement a computer security 

incident notification final rule. 

ACHIEVED. 

SEE PGS. 34-35. 

ACHIEVED. 

SEE PGS. 34-35. 

ACHIEVED. 

SEE PG. 41. 

Update rules,  regulations, and 

other guidance to 

enhance e ̈iciency and 

transparency while 

maintaining the safety 

and soundness of the 

financial system. 

Modernize FDIC 

regulations to tailor 

regulatory requirements 

and processes. 

Revise and clarify FDIC 

policies, procedures, 

and guidance. 

Issue a final rule related to the 

exemption for Suspicious Activity 

Reports (SARs). 

Issue a final interagency rule on the 

use of supervisory guidance. 

Clarify the use of Model Risk 

Management Guidance related to 

systems or models used by banks to 

assist in complying with the BSA/AML 

requirements. 

NOT 

ACHIEVED. 

SEE PG. 40. 

ACHIEVED. 

SEE PG. 38. 

ACHIEVED. 

SEE PGS. 46-47. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  97

PERFORMANCE RESULTS SUMMARY 

2021 Supervision Program Results (continued) 

Strategic Goal: FDIC-insured institutions are safe and sound. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

Increase engagement  and collaboration to 

preserve and promote 

FDIC-insured minority 

depository institutions 

(MDIs) and missiondriven institutions. 

Enhance outreach and 

collaboration with FDICinsured MDIs. 

Preserve and encourage 

minority ownership 

of insured financial 

institutions. 

Convene meetings of the MDI 

Subcommittee of the Advisory 

Committee on Community Banking 

(CBAC) to gain insight into industry 

needs, seek input on program 

operations, and share best practices. 

Establish the Mission-Driven Bank 

Fund as an independent funding 

source for FDIC-insured MDIs and 

Community Development Financial 

Institutions (CDFIs). 

Conduct a media campaign to 

promote the visibility and benefits of 

FDIC-insured MDIs and other missiondriven institutions. 

Promote creation of new MDIs. 

ACHIEVED. 

SEE PG. 21. 

ACHIEVED. 

SEE PGS. 21-22. 

ACHIEVED. 

SEE PGS. 21-23. 

ACHIEVED. 

SEE PG. 22. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  98

PERFORMANCE RESULTS SUMMARY 

2021 Supervision Program Results (continued) 

Strategic Goal: Consumers’ rights are protected, and FDIC-supervised institutions invest in 

their communities. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 




 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conduct on-site CRA and  

consumer compliance 

examinations to assess 

compliance with 

applicable laws and 

regulations by FDICsupervised institutions. 

When violations are 

identified, ensure IDIs 

promptly implement 

appropriate corrective 

programs and follow 

up to ensure that the 

violations are corrected. 

Percentage of 

examinations conducted 

in accordance with the 

timeframes prescribed 

by FDIC policy. 

Implementation 

of corrective 

programs. 

Conduct all required examinations 

within the timeframes established. 

Conduct visits and/or follow-up 

examinations in accordance with 

established FDIC processes and 

timeframes to ensure that the 

requirements of any corrective 

program have been implemented 

and are e3ectively addressing 

identified violations. 

ACHIEVED. 

SEE PG. 32. 

ACHIEVED. 

SEE PG. 32. 

 E ̈ectively investigate 

and respond to written 

consumer complaints 

and inquiries about 

FDIC-supervised 

financial institutions. 

Timely responses to 

written consumer 

complaints and 

inquiries. 

Respond to 95 percent of written 

consumer complaints and inquiries 

within timeframes established 

by policy, with all complaints and 

inquiries receiving at least an initial 

acknowledgement within two weeks. 

Public availability 

of information on 

consumer complaints. 

Publish, through the Consumer 

Response Center (CRC), an annual 

report regarding the nature of the 

FDIC’s interactions with consumers 

and depositors. 

Publish, on the FDIC’s public website 

(https://www.fdic.gov) and regularly 

update metrics on requests from the 

public for FDIC assistance. 

Completion of planned 

initiatives. 

Field the 2021 Survey of Household 

Use of Banking and Financial Services 

and begin analysis to support 

publication of the report in 2022. 

Launch “How Money Smart Are You?” 

an online, interactive learning game. 

Complete a public awareness 

campaign to encourage unbanked 

individuals to establish sustainable 

banking relationships in two markets. 

ACHIEVED. 

SEE PG. 76. 

ACHIEVED. 

SEE PG. 76. 

ACHIEVED. 

SEE PG. 76. 

Promote economic  inclusion and access to 

responsible financial 

services through 

supervisory, research, 

policy, and consumer/ 

community a ̈airs 

initiatives. 

ACHIEVED. 

SEE PG. 51. 

ACHIEVED. 

SEE PGS. 72-73. 

ACHIEVED. 

SEE PGS. 68-69. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  99

PERFORMANCE RESULTS SUMMARY 

2021 Supervision Program Results (continued) 

Strategic Goal: Large, Complex Financial Institutions (LCFIs) are resolvable in an orderly 

manner under bankruptcy. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 





 

 

 

Identify and address  risks in LCFIs, including 

those designated as 

systemically important. 

IDI resolution planning. 

Compliance with 

the statutory 

and regulatory 

requirements under 

Title I of the DoddFrank Act. 

Compliance with 

the statutory 

and regulatory 

requirements under 

Section 360.10 of 

the FDIC Rules and 

Regulations. 

Risk monitoring of 

LCFIs, BHCs, and 

designated nonbanking 

firms. 

Publish further information on the 

approach to IDI resolution planning. 

In collaboration with the FRB, review 

all resolution plans subject to the 

requirements of Section 165(d) of 

the Dodd-Frank Act to ensure their 

conformance to statutory and other 

regulatory requirements. Identify 

and provide feedback to firms on 

potential impediments in those plans to 

resolution under the Bankruptcy Code. 

Review any resolution plans submitted 

pursuant to the requirements of 

Section 360.10 of the IDI Rule to ensure 

their conformance to regulatory 

requirements. 

Conduct ongoing risk analysis 

and monitoring of LCFIs to better 

understand and assess their structure, 

business activities, risk profiles, and 

resolution and recovery plans. 

ACHIEVED. 

SEE PGS. 62-63. 

SUBSTANTIALLY 

ACHIEVED. 

SEE PG. 62. 

NOT 

APPLICABLE. 

SEE PGS. 63-64. 

ACHIEVED. 

SEE PG. 61. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
PERFORMANCE RESULTS SUMMARY 

2021 Receivership Management Program Results 

Strategic Goal: Resolutions are orderly and receiverships are managed effectively. 

# ANNUAL

PERFORMANCE GOAL INDICATOR TARGET RESULTS 

 

 

 

 

 

 Value, manage, and 

market assets of 

Percentage of the 

assets marketed for 

failed IDIs and their each failed IDI. 

subsidiaries in a timely 

manner to maximize 

net return. 

For at least 95 percent of IDI failures, 

market at least 90 percent of the book 

value of its marketable assets within 

90 days of the failure date (for cash 

sales) and within 120 days of that 

date if the pool of similar assets is of 

su3icient size to bring to market (for 

structured sales). 

NOT 

APPLICABLE. 

NO FAILURE 

ACTIVITY 

IN 2021. 

SEE PG. 78. 

Manage the receivership Timely termination of Terminate at least 75 percent of NOT  estate and its new receiverships. new receiverships that are not ACHIEVED. 

subsidiaries toward an subject to loss-share agreements, SEE PGS. 79-80. 

orderly termination. structured transactions, or other legal 

impediments within three years of the 

date of failure. 

Conduct investigations  into all potential 

professional liability 

claim areas for all 

failed IDIs and decide 

as promptly as possible 

to close or pursue each 

claim, considering the 

size and complexity of 

the institution. 

Percentage of For 80 percent of all claim areas, ACHIEVED. 

investigated claim areas make a decision to close or pursue SEE PG. 80. 

for which a decision has professional liability claims within 18 

been made to close or months of the failure of an IDI. 

pursue the claim. 

Ensure the FDIC’s ¥ operational readiness 

to administer the 

resolution of LCFIs, 

including those 

designated as 

systemically important. 

Refinement of Continue to refine plans and 

resolution plans and strategic options to ensure the FDIC’s 

strategies. operational readiness to administer 

the resolution of LCFIs. 

Continued cross- Continue to deepen and strengthen 

border coordination working relationships with key foreign 

and cooperation in jurisdictions, both on a bilateral basis 

resolution planning. and through multilateral fora. 

ACHIEVED. 

SEE PG. 61. 

ACHIEVED. 

SEE PG. 65. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Prior Years’ Performance Results 

Refer to the respective full Annual Report of prior years, located on the FDIC’s website for more 

information on performance results for those years. Shaded areas indicate no such target existed for 

that respective year. 

Insurance Program Results 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer 

funding. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

1. Respond promptly to all IDI closings 

and related emerging issues. 

 Depositors have access to insured 

funds within one business day if the 

failure occurs on a Friday. 

ACHIEVED. ACHIEVED. N/A – NO 

FAILURES. ACHIEVED. ACHIEVED. 

 Depositors have access to insured 

funds within two business days if the 

failure occurs on any other day of the 

week. 

N/A – ALL 

FAILURES 

ON 

FRIDAYS. 

ACHIEVED. N/A – NO 

FAILURES. ACHIEVED. ACHIEVED. 

 Depositors do not incur any losses on 

insured deposits. ACHIEVED. ACHIEVED. N/A – NO 

FAILURES. ACHIEVED. ACHIEVED. 

 No appropriated funds are required 

to pay insured depositors. ACHIEVED. ACHIEVED. N/A – NO 

FAILURES. ACHIEVED. ACHIEVED. 

2. Disseminate data and analyses 

on issues and risks a ̈ecting the 

financial services industry to 

bankers, supervisors, the public, and 

other stakeholders on an ongoing 

basis. 

 Disseminate results of research and 

analyses in a timely manner through 

regular publications, ad hoc reports, 

and other means. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Undertake industry outreach 

activities to inform bankers and other 

stakeholders about current trends, ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

concerns, available resources, and 

other FDIC performance metrics. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Insurance Program Results (continued) 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

3. Monitor the status of the DIF reserve 

ratio and analyze the factors 

that a ̈ect fund growth. Adjust 

assessment rates, as necessary. 

 Provide updated fund balance 

projections to the FDIC Board of 

Directors semiannually. 

ACHIEVED. ACHIEVED. 

 Recommend changes to deposit 

insurance assessment rates to the 

FDIC Board of Directors as necessary. 

ACHIEVED. ACHIEVED. 

4. Adjust assessment rates, as 

necessary, to achieve a DIF reserve 

ratio of at least 1.35 percent of 

estimated insured deposits by 

September 30, 2020. 

 Provide updated fund balance 

projections to the FDIC Board of 

Directors by June 30, 2018, and 

December 31, 2018. 

ACHIEVED. 

 Provide updated fund balance 

projections to the FDIC Board of 

Directors by June 30, 2017, and 

December 31, 2017. 

ACHIEVED. 

 Provide updated fund balance 

projections to the FDIC Board of 

Directors by June 30, 2016, and 

December 31, 2016. 

ACHIEVED. 

 Provide progress reports to the FDIC 

Board of Directors by June 30, 2018, 

and December 31, 2018. 

ACHIEVED. 

 Provide progress reports to the FDIC 

Board of Directors by June 30, 2017, 

and December 31, 2017. 

ACHIEVED. 

 Provide progress reports to the FDIC 

Board of Directors by June 30, 2016, 

and December 31, 2016. 

ACHIEVED. 

 Recommend changes to deposit 

insurance assessment rates to the 

FDIC Board of Directors as necessary. 

ACHIEVED. ACHIEVED. ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Insurance Program Results (continued) 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

5. Expand and strengthen the FDIC’s 

participation and leadership role 

in supporting robust and e ̈ective 

deposit insurance programs, 

resolution strategies, and banking 

systems worldwide. 

 Foster strong relationships with 

international banking regulators, 

deposit insurers, and other relevant 

authorities by engaging with 

strategically important jurisdictions 

and organizations on international 

financial safety net issues. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED

 Provide leadership and expertise to 

key international organizations and 

associations that promote sound 

deposit insurance and e3ective bank 

supervision and resolution practices. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Promote international standards 

and expertise in financial regulatory 

practices and stability through the 

provision of technical assistance and 

training to global financial system 

authorities. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Continue to play leadership 

roles within key international 

organizations and associations and 

promote sound deposit insurance, 

bank supervision, and resolution 

practices. 

ACHIEVED

 Promote continued enhancement of 

international standards and expertise 

in financial regulatory practices and 

stability through the provision of 

technical assistance and training to 

global financial system authorities. 

ACHIEVED

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 

PERFORMANCE RESULTS SUMMARY 

Insurance Program Results (continued) 

Strategic Goal: Insured depositors are protected from loss without recourse to taxpayer funding. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

 Develop and foster closer 

relationships with bank supervisors 

in the reviews through the provision 

of technical assistance and by leading 

governance e3orts in the Association 

of Supervisors of Banks of the 

Americas (ASBA). 

ACHIEVED. 

6. Ensure timely consideration and 

e ̈icient processing of de novo 

deposit insurance applications. 

 Act on 75 percent of deposit 

insurance applications within 120 

days aμer receiving a substantially 

complete application. 

NOT 

ACHIEVED. 

 Conduct six regional roundtable 

discussions to explain and solicit 

feedback on the de novo application 

process, and implement additional 

changes, as appropriate, based on 

that feedback. 

ACHIEVED. 

 Ensure the de novo deposit insurance 

application process is streamlined 

and transparent. 

ACHIEVED. 

7. Market failing institutions to 

all qualified and interested 

potential bidders. 

 Contact all qualified and interested 

bidders. ACHIEVED. ACHIEVED. N/A – NO 

FAILURES. ACHIEVED. ACHIEVED. 

8. Provide educational information 

to insured depository institutions 

and their customers to help them 

understand the rules for determining 

the amount of insurance coverage on 

deposit accounts. 

 Respond within two weeks to 95 

percent of written inquiries from 

consumers and bankers about FDIC 

deposit insurance coverage. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Conduct at least four telephone or 

in-person seminars for bankers on 

deposit insurance coverage. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
PERFORMANCE RESULTS SUMMARY 

Supervision Program Results 

Strategic Goal: FDIC-insured institutions are safe and sound. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

1. Conduct on-site risk management 

examinations to assess the overall 

financial condition, management 

practices and policies, and compliance 

with applicable laws and regulations 

of FDIC-supervised depository 

institutions. When problems are 

identified, promptly implement 

appropriate corrective programs, and 

follow up to ensure that identified 

problems are corrected. 

 Conduct all required risk management 

examinations within the timeframes 

prescribed by statute and FDIC policy. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 For at least 90 percent of IDIs that are 

assigned a composite CAMELS rating 

of 2 and for which the examination 

report identifies “Matters Requiring 

Board Attention” (MRBAs), review 

progress reports and follow up with 

the institution within six months of 

the issuance of the examination report 

to ensure that all MRBAs are being 

addressed. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

2. Assist in protecting the infrastructure 

of the U.S. banking system against 

terrorist financing, money laundering, 

and other financial crimes. 

 Conduct all Bank Secrecy Act 

examinations within the timeframes 

prescribed by statute and FDIC policy. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

3. Establish regulatory capital standards 

that ensure institutions have su ̈icient 

loss-absorbing capacity to remain 

resilient under stress while reducing 

complexity and maximizing e ̈iciency. 

 Complete, by September 30, 2019, 

rulemaking for a community bank 

leverage ratio and conforming changes 

to the deposit insurance assessment 

process. 

ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: FDIC-insured institutions are safe and sound. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

 Finalize aspects of the interagency 

capital simplification proposal issued 

in September 2017, including changes 

to the regulatory capital treatment of 

mortgage servicing assets, deferred 

tax assets, investment in the capital 

instruments of other financial 

institutions, and minority interest. 

ACHIEVED

 Issue an interagency final rule on 

holdings of total loss-absorbing 

capacity. 

ACHIEVED. 

 Issue an NPR to implement the final 

Basel III standards into the U.S. 

regulatory capital framework. 

NOT 

ACHIEVED. 

 Issue interagency final rules to adopt 

the statutory definition of high 

volatility commercial real estate for 

risk based capital. 

ACHIEVED

 Reevaluate and take appropriate 

actions on Basel III requirements for 

small banks that do not meet or are 

not eligible for the community bank 

leverage ratio. 

ACHIEVED

 Issue a final rule to implement the 

Net Stable Funding Ratio (NSFR). ACHIEVED. NOT 

ACHIEVED

 Issue interagency final rules to tailor 

capital requirements for large financial 

institutions. 

ACHIEVED

 Issue interagency rulemaking 

to remove certain central bank 

deposits from the denominator of 

the supplementary leverage ratio for 

custodial banks. 

ACHIEVED

4. Ensure that regulatory capital 

standards promote banks’ resilience 

under stress and the confidence of 

their counterparties. 

 Finalize a Notice of Proposed 

Rulemaking (NPR) for a simplified 

risk-based capital framework for 

community banks. 

NOT 

ACHIEVED. 

 Finalize the Basel III Net Stable Funding 

Ratio (NSFR). 

NOT 

ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: FDIC-insured institutions are safe and sound. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

5. More closely align regulatory capital 

standards with risk and ensure that 

capital is maintained at prudential 

levels. 

 Issue a Notice of Proposed Rulemaking 

(NPR) for a simplified capital 

framework for community banks. 

ACHIEVED. 

 Issue a final rule implementing the 

Basel III Net Stable Funding Ratio. 

NOT 

ACHIEVED. 

 Publish in 2016, a Notice of (proposed) 

Rulemaking on the Basel III Net Stable 

Funding Ratio. 

ACHIEVED. 

6. Implement strategies to promote 

enhanced cybersecurity, and business 

continuity within the banking industry. 

 Continue to conduct horizontal reviews 

that focus on the IT risks in large and 

complex supervised institutions and in 

Technology Service Providers (TSPs). 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Continue to use the Cybersecurity 

Examination Program for the 

most significant service provider 

examinations. 

ACHIEVED. ACHIEVED. ACHIEVED. 

 Improve the analysis and sharing 

of cybersecurity-related threat 

information with financial institutions. 

ACHIEVED. ACHIEVED. 

 Revise and implement by December 31, 

2017, the Cybersecurity Examination 

Tool for TSPs. 

ACHIEVED. 

 Establish a horizontal review program 

that focuses on the IT risks in large and 

complex supervised institutions and 

Technology Service providers (TSPs). 

ACHIEVED. 

 Complete by June 30, 2016, examiner 

training and implement by September 

30, 2016, the new IT examination 

work program to enhance focus on 

information security, cybersecurity, 

and business continuity. 

ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: FDIC-insured institutions are safe and sound. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

7. Update rules, regulations, and other 

guidance to enhance e ̈iciency and 

transparency while maintaining the 

safety and soundness of the financial 

system. 

 Issue a final rule on brokered 

deposits. ACHIEVED. 

 Issue revised stress testing 

guidance. 

NOT 

ACHIEVED. 

 Issue a final rule to codify and amend 

the FDIC’s Statement of Policy on 

Section 19 of the Federal Deposit 

Insurance Act (FDI Act). 

ACHIEVED. 

 Issue a final rule clarifying the 

applicability of the “valid when 

made” rule. 

ACHIEVED. 

 Issue an interagency final rule to 

modify the treatment of covered funds 

under the Volcker Rule. 

ACHIEVED. 

 Issue a final rule amending the swap 

margin requirements. ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
ANNUAL REPORT  9


 

 

 

PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: Consumers’ rights are protected, and FDIC-supervised institutions invest in 

their communities. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

1. Conduct on-site CRA and consumer 

compliance examinations to assess 

compliance with applicable laws 

and regulations by FDIC-supervised 

institutions. When violations are 

identified, promptly implement 

appropriate corrective programs and 

follow up to ensure that identified 

problems are corrected. 

 Conduct all required examinations 

within the timeframes established. ACHIEVED. ACHIEVED. 

SUBSTANTIALLY 

ACHIEVED. 

ACHIEVED. ACHIEVED

 Conduct visits and/or follow-up 

examinations in accordance with 

established FDIC processes and 

timeframes to ensure that the 

requirements of any corrective 

program have been implemented 

ACHIEVED. ACHIEVED. 

SUBSTANTIALLY 

ACHIEVED. 

ACHIEVED. ACHIEVED

and are e3ectively addressing 

identified violations. 

2. E ̈ectively investigate and respond 

to written consumer complaints and 

inquiries about FDIC-supervised

financial institutions. 

 Respond to 95 percent of written 

consumer complaints and inquiries 

within timeframes established by 

policy, with all complaints and ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED

inquiries receiving at least an initial 

acknowledgment within two weeks. 

 Publish, through the Consumer 

Response Center (CRC), an annual 

report regarding the nature of the 

FDIC’s interactions with consumers 

and depositors. 

ACHIEVED. ACHIEVED. 

 Publish, on the FDIC’s website, and 

regularly update metrics on requests 

from the public for FDIC assistance. 

ACHIEVED. ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 

PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: Consumers’ rights are protected, and FDIC-supervised institutions invest in 

their communities. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

3. Promote economic inclusion and 

access to responsible financial services 

through supervisory, research, 

policy, and consumer/community 

a ̈airs initiatives. 

 Issue rules and guidance to ensure that 

FDIC-supervised institutions meet the 

credit needs of their communities. 

NOT 

ACHIEVED. 

 Launch “How Money Smart Are You?” an 

online, interactive learning game. 

NOT 

ACHIEVED. 

 Publish the results of the 2019 Survey 

of the Unbanked and Underbanked 

Households. 

ACHIEVED. ACHIEVED. 

 Conduct outreach to institutions and 

the public to expand the availability 

and usage of low-cost transaction 

accounts tailored to the needs 

of unbanked and underbanked 

households. 

ACHIEVED. 

 Expand the reach of the new Money 

Smart for Adults through online 

resources, translating the curriculum 

into other languages, and outreach. 

ACHIEVED. 

 Strengthen connections between 

small businesses and FDIC-insured 

institutions. 

ACHIEVED. ACHIEVED. 

 Increase engagement and 

collaboration to preserve and promote 

Minority Depository Institutions (MDIs). 

ACHIEVED. ACHIEVED. 

 Publish the results of the 2017 FDIC 

National Survey of Unbanked and 

Underbanked Households. 

ACHIEVED. 

 Complete planning for the 2019 FDIC 

National Survey of Unbanked and 

Underbanked Households. 

ACHIEVED. 

 Continue to promote broader access 

to and use of low-cost transaction and 

savings accounts to build banking 

relationships that will meet the 

needs of unbanked and underbanked 

households by increasing the 

current level of engagement from 10 

communities to 15 communities. 

ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: Consumers’ rights are protected, and FDIC-supervised institutions invest in 

their communities. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

 Launch the revised Money Smart for 

Adults curriculum. ACHIEVED. 

 Revise and administer the 2017 FDIC 

National Survey of Unbanked and 

Underbanked Households. 

ACHIEVED. 

 Continue and expand e3orts to 

promote broader awareness of the 

availability of low-cost transaction 

accounts consistent with the FDIC’s 

Model SAFE transaction account 

template. 

ACHIEVED. 

 Complete and pilot a revised, 

instructor-led Money Smart for Adults 

product. 

ACHIEVED. 

 Publish the results of the 2015 FDIC 

National Survey of Unbanked and 

Underbanked Household. 

ACHIEVED. 

 Complete and present to the Advisory 

Committee on Economic Inclusions 

(ComE-IN) a report on the pilot Youth 

Savings Program (YSP) conducted 

jointly with the CFPB. 

ACHIEVED. 

 Promote broader awareness of the 

availability of low-cost transaction 

accounts consistent with the FDIC’s 

Model SAFE transaction account 

template. 

ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

PERFORMANCE RESULTS SUMMARY 

Supervision Program Results (continued) 

Strategic Goal: Large and complex fnancial institutions are resolvable in an orderly manner 

under bankruptcy. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

1. Identify and address risks in large, 

complex financial institutions, 

including those designated as 

systemically important. 

 Issue an NPR and, following a review 

of comments, a final rule to tailor 

and make adjustments to the FDIC’s 

resolution planning requirements 

for IDIs. 

NOT 

ACHIEVED. 

 Complete interagency rulemaking 

with the FRB to tailor application of 

resolution planning requirements 

under Section 165(d) of the DoddFrank Act. 

ACHIEVED. 

 Issue an ANPR to tailor and make 

adjustments to the FDIC’s resolution 

planning requirements for IDIs. 

ACHIEVED. 

 In collaboration with the FRB, review 

all resolution plans subject to the 

requirements of Section 165(d) of 

the Dodd-Frank Act to ensure their 

conformance to statutory and other ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

regulatory requirements. Identify and 

provide feedback to firms on potential 

impediments in those plans to 

resolution under the Bankruptcy Code. 

 Review resolution plans subject to the 

requirements of Section 360.10 of the 

IDI Rule to ensure their conformance to 

other regulatory requirements.

NOT 

APPLICABLE. ACHIEVED. 

 Review resolution plans subject to 

the requirements of Section 360.10 

of the Insured Depository Institutions 

(IDI) rule to ensure their conformance 

to statutory and other regulatory 

requirements.

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Conduct ongoing risk analysis and 

monitoring of large, complex financial 

institutions to understand and assess 

their structure, business activities, risk 

profiles, and resolution and recovery 

plans. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PERFORMANCE RESULTS SUMMARY 

Receivership Management Program Results 

Strategic Goal: Resolutions are orderly and receiverships are managed effectively. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2020 2019 2018 2017 2016 

1. Value, manage, and market assets 

of failed institutions and their 

subsidiaries in a timely manner to 

maximize net return. 

 For at least 95 percent of insured 

institution failures, market at least 

90 percent of the book value of the 

institution’s marketable assets within 

90 days of the failure date (for cash 

sales) and within 120 days of that 

date if the pool of similar assets is of 

su3icient size to bring to market (for 

structured sales). 

ACHIEVED. ACHIEVED. N/A – NO 

FAILURES. 

 For at least 95 percent of insured 

institution failures, market at least 

90 percent of the book value of the 

institution’s marketable assets within 

90 days of the failure date (for cash 

sales) or 120 days of the failure date 

(for structured sales). 

ACHIEVED. ACHIEVED. 

2. Manage the receivership estate and 

its subsidiaries toward an orderly 

termination. 

 Terminate at least 75 percent of 

new receiverships that are not 

subject to loss-share agreements, 

structured transactions, or other legal 

impediments within three years of the 

failure date. 

ACHIEVED. ACHIEVED. N/A – NO 

FAILURES. ACHIEVED. ACHIEVED. 

3. Conduct investigations into all 

potential professional liability claim 

areas for all failed insured depository 

institutions and decide as promptly as 

possible to close or pursue each claim, 

considering the size and complexity of 

the institution. 

 For 80 percent of all claim areas, 

make a decision to close or pursue 

professional liability claims within 18 

months of the failure of an IDI. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

PERFORMANCE RESULTS SUMMARY 

Receivership Management Program Results (continued) 

Strategic Goal: Resolutions are orderly and receiverships are managed effectively. 

ANNUAL PERFORMANCE 

GOALS AND TARGETS 2019 2018 2017 2016 2015 

4. Ensure the FDIC’s operational 

readiness to administer the resolution 

of large financial institutions, including 

those designated as systemically 

important. 

 Continue to refine plans to ensure 

the FDIC’s operational readiness to 

administer the resolution of large, 

complex financial institutions. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Continue to deepen and strengthen 

working relationships with key foreign 

jurisdictions, both on a bilateral basis 

and through multilateral fora. 

ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. ACHIEVED. 

 Hold a meeting of the Systemic 

Resolution Advisory Committee in 

early 2016 to obtain feedback on 

resolving SIFIs. 

ACHIEVED. 

5. Ensure the FDIC’s operational 

readiness to resolve a large, complex 

financial institution using the orderly 

liquidation authority in Title II of 

the DFA. 

 Continue to deepen and strengthen 

bilateral working relationships with 

key foreign jurisdictions. 

ACHIEVED. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
III. 

FINANCIAL 

HIGHLIGHTS 
PAGE INTENTIONALLY LEFT BLANK
FINANCIAL HIGHLIGHTS 

In its role as insurer of bank and savings association deposits, the FDIC promotes the public’s 

trust in the safety and soundness of insured depository institutions. The following financial 

highlights address the performance of the Deposit Insurance Fund. 

Deposit Insurance 

Fund Performance 

The DIF balance was $123.1 billion at December 31, 2021, an increase of $5.2 billion from 

the year-end 2020 balance. The DIF’s comprehensive income totaled $5.2 billion for 2021 

compared to comprehensive income of $7.5 billion during 2020. The year-over-year decrease 

in comprehensive income of $2.3 billion was primarily driven by a decrease in interest and fair 

value adjustments on U.S. Treasury securities of $2.4 billion. Assessment revenue decreased 

nominally. 

Assessment revenue was $7.1 billion for both 2021 and 2020. The year-over-year stability was 

due to a combination of assessment base growth, declining assessment rates, and assessment 

offsets related to the Paycheck Protection Program and the Money Market Mutual Fund 

Liquidity Facility. 

The DIF’s interest revenue on U.S. Treasury securities for 2021 was nearly $1.0 billion, 

compared to $1.7 billion in 2020. The $730 million year-over-year decrease was despite the 

$4.1 billion increase in the investment portfolio, as maturities continue to be reinvested into 

lower yielding securities. 

During 2021, the DIF recognized an unrealized loss on U.S. Treasury securities of $1.2 billion, 

down from a $483 million unrealized gain in 2020. This decrease was primarily due to yields 

rising, as market participants priced in the withdrawal of economic support from the Federal 

Reserve and potential rate hikes for 2022. 

The DIF’s cash, cash equivalents, and U.S. Treasury investment portfolio balances increased by 

$6.3 billion during 2021 to $120.1 billion at year-end 2021, from $113.8 billion at year-end 2020. 

This increase was primarily due to assessment collections of $7.3 billion and interest received 

on U.S. Treasury securities of $3.9 billion, less operating expenses paid of $1.8 billion. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
3-12

6-12

9-12

12-12

3-13

6-13

9-13

12-13

3-14

6-14

9-14

12-14

3-15

6-15

9-15 

12-15 

3-16

6-16

9-16

12-16

3-17

6-17

9-17

12-17

3-18

6-18

9-18

12-18

3-19

6-19

9-19

12-19

3-20

6-20

9-20

12-20

3-21

6-21

9-21 

FINANCIAL HIGHLIGHTS 

ESTIMATED DIF INSURED DEPOSITS 

$10,000 

0 

3-12

6-12

9-12

12-12

3-13

6-13

9-13

12-13

3-14

6-14

9-14

12-15

3-15

6-15

9-15

12-14

3-16

6-16

9-16

12-16

3-17

6-17

9-17

12-17

3-18

6-18

9-18

12-18

3-19

6-19

9-19

12-19

3-20

6-20

9-20

12-20

3-21

6-21

9-21 

Dollars in Billions $8,000 

$6,000 

$4,000 

$2,000 

SOURCE: Commercial Bank Call and Thriμ Financial Reports. 

Note: Beginning in fourth quarter 2010 through fourth quarter 2012, estimated insured deposits include the entire 

balance of noninterest-bearing transaction accounts. 

DEPOSIT INSURANCE FUND RESERVE RATIOS 

1.6 

Fund Balance as a Percent

of Estimated Insured Deposits

1.4 

1.2 

1.0 

0.8 

0.6 

0.4 

0.2 

0.0 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
ANNUAL REPORT  9


FINANCIAL HIGHLIGHTS 

Deposit Insurance Fund Selected Statistics 

Dollars in Millions 

For the years ended December 31 

2021 2020 2019 

Financial Results 

Revenue $8,153 $8,796 $7,095 

Operating Expenses 1,843 1,846 1,796 

Insurance and Other Expenses 

(includes provision for losses) (137) (155) (1,282) 

Net Income 6,448 7,105 6,582 

Comprehensive Income 5,244 7,550 7,738 

Insurance Fund Balance $123,141 $117,897 $110,347 

Fund as a Percentage of Insured Deposits 

(reserve ratio) 1.27%1 1.29% 1.41% 

Selected Statistics 

Total DIF-Member Institutions2 4,9141 5,002 5,177 

Problem Institutions 461 56 51 

Total Assets of Problem Institutions $50,5881 $55,830 $46,190 

Institution Failures 0 4 4 

Total Assets of Failed Institutions in Year3 $0 $455 $209 

Number of Active Failed Institution Receiverships 191 234 248 

· As of September 30, 2021. 

 ̧ Commercial banks and savings institutions. Does not include U.S. insured branches of foreign banks. 

1 Total Assets data are based upon the last Call Report filed by the institution prior to failure. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
PAGE INTENTIONALLY LEFT BLANK
IV. 

BUDGET 

AND SPENDING 
PAGE INTENTIONALLY LEFT BLANK
 

BUDGET AND SPENDING 

FDIC Operating Budget 

The FDIC segregates its corporate operating budget and expenses into three separate 

components: ongoing operations, receivership funding, and the Office of Inspector General 

(OIG). The receivership funding component represents expenses resulting from financial 

institution failures and is, therefore, largely driven by external forces and is less controllable 

and estimable. FDIC operating expenditures totaled $1.9 billion in 2021, including $1.8 billion 

in ongoing operations, $41 million in receivership funding, and $40 million for the OIG. This 

represented approximately 87 percent of the approved budget for ongoing operations, 23 

percent of the approved budget for receivership funding, and 90 percent of the approved 

budget for the OIG for the year. 

The approved 2022 FDIC Operating Budget of approximately $2.3 billion consists of $2.1 billion 

for ongoing operations, $75 million for receivership funding, and $47 million for the OIG. The 

level of approved ongoing operations budget for 2022 is approximately $82 million (4 percent) 

higher than the 2021 ongoing operations budget, while the approved receivership funding 

budget is $100 million (57 percent) lower than the 2021 receivership funding budget. The 2022 

OIG budget is $2 million (5 percent) higher than the 2021 OIG budget. 

As in prior years, the 2022 budget was formulated primarily on the basis of an analysis of 

projected workload for each of the Corporation’s three major business lines and its program 

support functions. The total proposed operating budget is $16 million (0.7 percent) lower than 

the 2021 FDIC Operating Budget, largely due to the elimination of the increased contingency 

reserves approved by the Board for 2021 to ensure the FDIC’s readiness to be able to respond 

quickly to potential supervisory or resolutions issues related to the ongoing pandemic. 

FDIC EXPENDITURES 

Dollars in Millions 

$2,500

$2,000

$1,500

$1,000

$500

$0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
BUDGET AND SPENDING 

The FDIC’s Strategic Plan and Annual Performance Plan provide the basis for annual planning 

and budgeting for needed resources. The 2021 aggregate budget (for ongoing operations, 

receivership funding, OIG, and investment spending) was $2.31 billion, while actual 

expenditures for the year were $1.9 billion, about $15 million higher than 2020 expenditures. 

‚TM‚f BUDGET AND EXPENDITURES BY PROGRAM 

Dollars in Millions 

$1,200 

$900 

$600 

$300 

$0 

Supervision Receivership Insurance General and 

and Consumer Management Program Administrative 

Protection Program 

Program 

Budget Expenditures 

2021 Budget and 

Expenditures by Program 

(EXCLUDING INVESTMENTS) 

The FDIC corporate operating budget for 2021 totaled approximately $2.3 billion. Budget 

amounts were allocated as follows: $1.18 billion or 52 percent, to the Supervision and 

Consumer Protection program; $421 million or 18 percent, to the Receivership Management 

program; $373 million, or 16 percent, to the Insurance program; and $303 million, or 

13 percent, to Corporate General and Administrative expenditures. 

Actual expenditures for the year totaled $1.9 billion. Actual expenditures occurred as follows: 

$1.1 billion, or 58 percent, to the Supervision and Consumer Protection program; $227 million, 

or 12 percent, to the Receivership Management program; $316 million, or 17 percent, to the 

Insurance program; and $243 million, or 13 percent, to Corporate General and Administrative 

expenditures. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥
 

BUDGET AND SPENDING 

Investment Spending 

The FDIC instituted a separate Investment Budget in 2003 to provide enhanced governance 

of major multi-year development efforts. It has a disciplined process for reviewing proposed 

new investment projects and managing the construction and implementation of approved 

projects. Proposed IT projects are carefully reviewed to ensure that they are consistent 

with the FDIC’s enterprise architecture. The project approval and monitoring processes also 

enable the FDIC to be aware of risks to the major capital investment projects and facilitate 

appropriate, timely intervention to address these risks throughout the development process. 

An investment portfolio performance review is provided to the FDIC’s Board of Directors on a 

quarterly basis. From 2012-2021 investment spending totaled $125 million, and is estimated at 

$9 million for 2022. 

INVESTMENT SPENDING 

Dollars in Millions 

$25

$15

$5

$10

$20

$0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
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V. 

FINANCIAL 

SECTION 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 128 

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Federal Deposit Insurance Corporation 

Deposit Insurance Fund Balance Sheet 

As of December 31 

(Dollars in Thousands) 2021 2020 

ASSETS

 Cash and cash equivalents $ 5,562,941 $ 3,310,527

 Investment in U.S. Treasury securities (Note 3) 114,551,240 110,464,342

 Assessments receivable (Note 9) 1,710,549 1,948,516 

Interest receivable on investments and other assets, net 718,428 1,159,130

 Receivables from resolutions, net (Note 4) 885,354 1,366,736

 Property and equipment, net (Note 5) 327,127 321,080 

Operating lease right-of-use assets (Note 6) 85,238 112,453 

Total Assets $ 123,840,877 $ 118,682,784 

LIABILITIES

 Accounts payable and other liabilities $ 255,405 $ 250,617

 Operating lease liabilities (Note 6) 90,957 119,459 

Liabilities due to resolutions 800 814

 Postretirement benefit liability (Note 13) 331,599 335,977 

Contingent liabilities:

 Anticipated failure of insured institutions (Note 7) 20,876 78,952

 Litigation losses (Note 7) 200 200 

Total Liabilities 699,837 786,019

 Off-balance-sheet exposure (Note 14) 

FUND BALANCE

 Accumulated Net Income 123,372,878 116,924,738 

ACCUMULATED OTHER COMPREHENSIVE INCOME 

Unrealized (loss) gain on U.S. Treasury securities, net (Note 3) (149,115) 1,069,949 

Unrealized postretirement benefit (loss) (Note 13) (82,723) (97,922) 

Total Accumulated Other Comprehensive Income (231,838) 972,027 

Total Fund Balance 123,141,040 117,896,765 

Total Liabilities and Fund Balance $ 123,840,877 $ 118,682,784 

The accompanying notes are an integral part of these financial statements. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 129 

FINANCIAL SECTION

 

 

 

 

 

 

 

 

 

Federal Deposit Insurance Corporation 

Deposit Insurance Fund Statement of Income and Fund Balance 

For the Years Ended December 31 

(Dollars in Thousands) 

REVENUE

 Assessments (Note 9) 

Interest on U.S. Treasury securities 

 Return of unclaimed insured deposits (Note 10) 

 Other revenue 

Total Revenue 

$ 

2021 

7,080,232 

953,152 

103,439 

16,665 

8,153,488 

$ 

2020 

7,093,175 

1,683,063 

0 

20,240 

8,796,478 

EXPENSES AND LOSSES

 Operating expenses (Note 11) 

 Provision for insurance losses (Note 12) 

 Insurance and other expenses 

Total Expenses and Losses 

1,842,723 

(143,681) 

6,306 

1,705,348 

1,846,491 

(157,309) 

2,660 

1,691,842 

Net Income 6,448,140 7,104,636 

OTHER COMPREHENSIVE INCOME 

Unrealized (loss) gain on U.S. Treasury securities, net 

 Unrealized postretirement benefit gain (loss) (Note 13) 

Total Other Comprehensive Income 

(1,219,064) 

15,199 

(1,203,865) 

482,681 

(37,490) 

445,191 

Comprehensive Income 5,244,275 7,549,827 

Fund Balance - Beginning 

Fund Balance - Ending $ 

117,896,765 

123,141,040 $ 

110,346,938 

117,896,765 

The accompanying notes are an integral part of these financial statements. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 130 

FINANCIAL SECTION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Deposit Insurance Corporation 

Deposit Insurance Fund Statement of Cash Flows 

For the Years Ended December 31 

(Dollars in Thousands) 2021 2020 

OPERATING ACTIVITIES 

Provided by:

 Assessments $ 

Interest on U.S. Treasury securities 

 Recoveries from financial institution resolutions 

 Return of unclaimed insured deposits 

 Miscellaneous receipts 

Used by: 

Operating expenses 

 Disbursements for financial institution resolutions 

 Miscellaneous disbursements 

7,318,198 

3,938,901 

594,356 

103,439 

2,284 

(1,775,301) 

(7,515) 

(14,803) 

$ 6,375,350 

3,742,956 

1,439,452 

0 

17,972 

(1,745,171) 

(320,501) 

(9,485) 

Net Cash Provided by Operating Activities 10,159,559 9,500,573 

INVESTING ACTIVITIES 

Provided by:

 Maturity of U.S. Treasury securities 

Used by: 

61,350,000 54,575,000 

 Purchase of U.S. Treasury securities (69,203,406) (66,714,039)

 Purchase of property and equipment (53,739) (41,772) 

Net Cash (Used) in Investing Activities (7,907,145) (12,180,811) 

Net Increase (Decrease) in Cash and Cash Equivalents 

Cash and Cash Equivalents - Beginning 

Cash and Cash Equivalents - Ending $ 

2,252,414 

3,310,527 

5,562,941 

(2,680,238) 

5,990,765 

$ 3,310,527 

The accompanying notes are an integral part of these financial statements. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 131 

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DEPOSIT INSURANCE FUND 

NOTES TO THE FINANCIAL STATEMENTS 

December 31, 2021 and 2020 

1. Operations of the Deposit Insurance Fund 

OVERVIEW 

The Federal Deposit Insurance Corporation (FDIC) is the 

independent deposit insurance agency created by Congress 

in 1933 to maintain stability and public confidence in the 

nation’s banking system. Provisions that govern the FDIC’s 

operations are generally found in the Federal Deposit 

Insurance (FDI) Act, as amended (12 U.S.C. 1811, et seq). In 

accordance with the FDI Act, the FDIC, as administrator of the 

Deposit Insurance Fund (DIF), insures the deposits of banks 

and savings associations (insured depository institutions). In 

cooperation with other federal and state agencies, the FDIC 

promotes the safety and soundness of insured depositor y 

institutions (IDIs) by identifying, monitoring, and addressing 

risks to the DIF. Federally chartered IDIs are supervised by the 

Office of the Comptroller of the Currency; state chartered IDIs 

that are members of the Federal Reserve are supervised by 

the Federal Reserve and their state supervisors; and state 

chartered IDIs that are not members of the Federal Reser ve 

are supervised by the FDIC and their state supervisors. 

In addition to being the administrator of the DIF, the FDIC is 

the administrator of the Federal Savings and Loan Insurance 

Corporation (FSLIC) Resolution Fund (FRF). The FRF is a 

resolution fund responsible for the sale of the remaining 

assets and the satisfaction of the liabilities associated with 

the former FSLIC and the former Resolution Trust 

Corporation. The FDIC maintains the DIF and the FRF 

separately to support their respective functions. 

Pursuant to the Dodd-Frank Wall Street Reform and 

Consumer Protection Act of 2010 (Dodd-Frank Act), the FDIC 

also manages the Orderly Liquidation Fund (OLF). 

Established as a separate fund in the U.S. Treasury (Treasury), 

the OLF is inactive and unfunded until the FDIC is appointed 

as receiver for a covered financial company. A covered 

financial company is a failing financial company (for example, 

a bank holding company or nonbank financial company) for 

which a systemic risk determination has been made as set 

forth in section 203 of the Dodd-Frank Act. 

The Dodd-Frank Act (Public Law 111-203) granted the FDIC 

authority to establish a widely available program to 

guarantee obligations of solvent IDIs or solvent depositor y 

institution holding companies (including affiliates) upon a 

liquidity event determination during times of sever e 

economic distress. The program would not be funded by the 

DIF but rather by fees and assessments paid by all 

participants in the program. If fees are insufficient to cover 

losses or expenses, the FDIC must impose a specia l 

assessment on participants as necessary to cover the 

shortfall. Any excess funds at the end of the liquidity event 

program would be deposited in the General Fund of the 

Treasury. 

The Dodd-Frank Act also created the Financial Stability 

Oversight Council of which the Chairman of the FDIC is a 

member and expanded the FDIC’s responsibilities to include 

supervisory review of resolution plans (known as living wills) 

and backup examination authority for systemically important 

bank holding companies and nonbank financial companies 

supervised by the Federal Reserve Board. The living wills 

provide for an entity’s rapid and orderly resolution in the 

event of material financial distress or failure. 

OPERATIONS OF THE DIF 

The FDIC, as administrator of the DIF, insures the deposits of 

IDIs and resolves failed IDIs upon appointment of the FDIC as 

receiver in a manner that will result in the least possible cost 

to the DIF. 

The DIF is primarily funded from deposit insurance 

assessments and interest earned on investments in U.S. 

Treasury securities. Other available funding sources, if 

necessary, are borrowings from the Treasury, the Federa l 

Financing Bank (FFB), Federal Home Loan Banks, and IDIs. 

The FDIC has borrowing authority of $100 billion from the 

Treasury and a Note Purchase Agreement with the FFB, not to 

exceed $100 billion, to enhance the DIF’s ability to fund

deposit insurance. 

A statutory formula, known as the Maximum Obligation 

Limitation (MOL), limits the amount of obligations the DIF can 

incur to the sum of its cash, 90 percent of the fair market value 

of other assets, and the amount authorized to be borrowed 

from the Treasury. The MOL for the DIF was $222.5 billion and 

$217.2 billion as of December 31, 2021 and 2020, respectively. 

OPERATIONS OF RESOLUTION ENTITIES 

The FDIC, as receiver, is responsible for managing and 

disposing of the assets of failed institutions in an orderly and 

efficient manner. The assets held by receiverships, 

conservatorships, and bridge institutions (collectively, 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 132 

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DEPOSIT INSURANCE FUND 

resolution entities), and the claims against them, are 

accounted for separately from the DIF assets and liabilities to 

ensure that proceeds from these entities are distributed 

according to applicable laws and regulations. Therefore, 

income and expenses attributable to resolution entities are 

accounted for as transactions of those entities. The FDIC, as 

administrator of the DIF, bills resolution entities for services 

provided on their behalf. 

2. Summary of Significant Accounting Policies 

GENERAL 

The financial statements include the financial position, 

results of operations, and cash flows of the DIF and are 

presented in accordance with U.S. generally accepted 

accounting principles (GAAP). These statements do not 

include reporting for assets and liabilities of resolution 

entities because these entities are legally separate and 

distinct, and the DIF does not have any ownership or 

beneficial interests in them. Periodic and final accounting 

reports of resolution entities are furnished to courts, 

supervisory authorities, and others upon request. 

USE OF ESTIMATES 

The preparation of the financial statements in conformity 

with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets and 

liabilities, revenue and expenses, and disclosure of 

contingent liabilities. Actual results could differ from these 

estimates. Where it is reasonably possible that changes in 

estimates will cause a material change in the financial 

statements in the near term, the nature and extent of such 

potential changes in estimates have been disclosed. The 

more significant estimates include the assessments 

receivable and associated revenue; the allowance for loss on 

receivables from resolutions; the postretirement benefit 

obligation; and the estimated losses for anticipated failures. 

CASH EQUIVALENTS 

Cash equivalents are short-term, highly liquid investments 

consisting primarily of U.S. Treasury Overnight Certificates. 

INVESTMENT IN U.S. TREASURY SECURITIES 

The FDI Act requires that the DIF funds be invested in 

obligations of the United States or in obligations guaranteed 

as to principal and interest by the United States. The 

Secretary of the Treasury must approve all such investments 

in excess of $100,000 and has granted the FDIC approval to 

invest the DIF funds only in U.S. Treasury obligations that are 

purchased or sold exclusively through the Treasury’s Bureau 

of the Fiscal Service’s Government Account Series program. 

The DIF’s investments in U.S. Treasury securities are classified 

as available-for-sale (AFS). Securities designated as AFS are 

shown at fair value. Unrealized gains and losses arereported 

as other comprehensive income. Any realized gains and 

losses are included in the Statement of Income and Fund 

Balance as components of net income. Income on securities 

is calculated and recorded daily using the straight-line 

method (see Note 3). 

REVENUE RECOGNITION FOR ASSESSMENTS 

Assessment revenue is recognized for the quarterly period of 

insurance coverage based on an estimate. The estimate is 

derived from an institution’s regular risk-based assessment 

rate and assessment base for the prior quarter adjusted for 

certain changes in supervisory examination ratings for larger 

institutions, modest assessment base growth and average 

assessment rate adjustment factors. At the subsequent 

quarter-end, the estimated revenue amounts are adjusted 

when actual assessments for the covered period are 

determined for each institution (see Note 9). 

CAPITAL ASSETS AND DEPRECIATION 

The FDIC buildings are depreciated on a straight-line basis 

over a 35- to 50-year estimated life. Building improvements 

are capitalized and depreciated over the estimated useful life 

of the improvements. Leasehold improvements are 

capitalized and depreciated over the lesser of the remaining 

life of the lease or the estimated useful life of the 

improvements, if determined to be material. Capital assets 

depreciated on a straight-line basis over a five-year estimated 

useful life include mainframe equipment; furniture, fixtures, 

and general equipment; and internal-use software. 

Computer equipment is depreciated on a straight-line basis 

over a three-year estimated useful life (see Note 5). 

LEASES 

The Balance Sheet presents operating leases in the 

“Operating lease right-of-use assets” and “Operating lease 

liabilities” line items. Operating lease liabilities and right-ofuse (ROU) assets are recognized based on the present value of 

the future minimum lease payments over the lease term at 

the commencement date. The FDIC has elected to use its riskfree rate at the commencement date in determining the 

present value of future payments. 

The operating lease ROU asset also includes lease 

prepayments and excludes lease incentives received. The 

lease term includes options to extend or terminate the lease 

when it is reasonably certain that the FDIC will exercise that 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 133 

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NOTES TO THE FINANCIAL STATEMENTS 

option. For the DIF, the FDIC recognizes lease expense on a 

straight-line basis over the lease term. For lease 

arrangements that contain both lease and nonlease 

components, the FDIC has elected to account for them as a 

single lease component for all classes of underlying assets. 

PROVISION FOR INSURANCE LOSSES 

The provision for insurance losses primarily represents 

changes in the allowance for losses on receivables from 

resolutions and the contingent liability for anticipated failure 

of insured institutions (see Note 12). 

REPORTING ON VARIABLE INTEREST ENTITIES 

The receiverships engaged in structured transactions, some 

of which resulted in the issuance of note obligations that the 

FDIC guaranteed, in its corporate capacity. As the guarantor 

of note obligations for several structured transactions, the 

FDIC, in its corporate capacity, holds an interest in variable 

interest entities (VIEs). The FDIC conducts a qualitative 

assessment of its relationship with each VIE as required by the 

Financial Accounting Standards Board Accounting Standards 

Codification Topic 810, Consolidation. These assessments are 

conducted to determine if the FDIC, in its corporate capacity, 

has (1) the power to direct the activities that most 

significantly affect the economic performance of the VIE and 

(2) an obligation to absorb losses of the VIE or the right to

receive benefits from the VIE that could potentially be

significant to the VIE. When a variable interest holder has met 

both of these tests, the enterprise is considered the primary

beneficiary and must consolidate the VIE. 

In accordance with the provisions of FASB ASC Topic 810, an 

assessment of the terms of the legal agreement for each VIE 

was conducted to determine whether any of the terms had 

been activated or modified in a manner that would cause the 

FDIC, in its corporate capacity, to be characterized as a 

primary beneficiary. In making that determination, 

management considered which, if any, activities were 

significant to each VIE. Often, the right to service collateral, 

to liquidate collateral, or to unilaterally dissolve the VIE was 

determined to be the most significant activity. In other cases, 

it was determined that the structured transactions did not 

include such significant activities and that the design of the 

entity was the best indicator of which party was the primary 

beneficiary. 

The conclusion of these assessments was that the FDIC, in its 

corporate capacity, has not engaged in any activity that 

would cause the FDIC to be characterized as a primary 

beneficiary to any VIE with which it was involved as of 

December 31, 2021 and 2020. Therefore, consolidation is not 

required for the December 31, 2021 and 2020 DIF financial 

statements. 

Note 8 under FDIC Guaranteed Debt of Structured 

Transactions fully describes the FDIC’s involvement with VIEs. 

RELATED PARTIES 

The nature of related parties and a description of related 

party transactions are discussed in Note 1 and disclosed 

throughout the financial statements and footnotes. 

APPLICATION OF RECENT ACCOUNTING STANDARDS 

Recent accounting standards have been deemed not 

applicable or material to the financial statements as 

presented. 

3. Investment in U.S. Treasury Securities 

The “Investment in U.S. Treasury securities” line item on the Balance Sheet consisted of the following components by maturity 

(dollars in thousands). 

December 31, 2021 Net Unrealized Unrealized 

Yield at Face Carrying Holding Holding Fair 

Maturity Purchase Value Amount Gains Losses Value

U.S. Treasury notes and bonds 

Within 1 year 0.92% $ 47,400,000 $ 48,252,075 $ 169,305 $ (26,501) $ 48,394,879 

After 1 year through 5 0.47% 

years 64,775,000 66,448,280 106,617 (398,536) 66,156,361 

Total $ 112,175,000 $ 114,700,355 $ 275,922 $ (425,037) (a) $ 114,551,240 

(a) These unrealized losses occurred as a result of changes in market interest rates. The FDIC does not intend to sell the securities and is not likely to be required to sell them before 

their maturity date, thus, the FDIC does not consider these securities to be other than temporarily impaired at December 31, 2021. However, $18 million of the $425 million reported as 

total unrealized losses occurred over a period of 12 months or longer, with a fair value of $1.6 billion applied to the affected security. The aggregate related fair value of all securities 

with unrealized losses was $86.9 billion as of December 31, 2021. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 134 

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DEPOSIT INSURANCE FUND 

December 31, 2020 

Yield at 

Maturity Purchase 

Face 

Value 

Net Unrealized Unrealized 

Carrying Holding Holding 

Amount Gains Losses 

Fair 

Value 

U.S. Treasury notes and bonds 

Within 1 year 1.23% $ 56,100,000 $ 57,122,288 $ 280,526 $ (4,521) $ 57,398,293 

After 1 year through 1.05% 

5 years 51,000,000 52,272,106 795,791 (1,848) 53,066,049 

Total $ 107,100,000 $ 109,394,394 $ 1,076,317 $ (6,369) (a) $ 110,464,342 

(a) These unrealized losses occurred over a period of less than a year as a result of temporary changes in market interest rates. The FDIC does not intend to sell the securities and is not 

likely to be required to sell them before their maturity date, thus, the FDIC does not consider these securities to be other than temporarily impaired at December 31, 2020. The aggregate 

related fair value of securities with unrealized losses was $12.8 billion as of December 31, 2020. 

4. Receivables from Resolutions, Net 

The receivables from resolutions result from DIF payments to 

cover obligations to insured depositors (subrogated claims), 

advances to resolution entities for working capital, and 

administrative expenses paid on behalf of resolution entities. 

Any related allowance for loss represents the difference 

between the funds advanced and/or obligations incurred and 

the expected repayment. Assets held by resolution entities 

(including structured transaction-related assets; see Note 8) 

are the main source of repayment of the DIF’s receivables 

from resolutions. The “Receivables from resolutions, net” line 

item on the Balance Sheet consisted of the following 

components (dollars in thousands). 

December 31 December 31 

2021 2020 

Receivables from resolutions 

Allowance for losses 

$ 56,228,805 

(55,343,451) 

$ 61,340,917 

(59,974,181) 

Total $ 885,354 $ 1,366,736 

As of December 31, 2021, the FDIC, as receiver, managed 191 

active receiverships; no new receiverships were established in 

2021. The resolution entities held assets with a book value of 

$1.5 billion as of December 31, 2021, and $2.1 billion as of 

December 31, 2020 (including $1.4 billion and $1.8 billion, 

respectively, of cash, investments, receivables due from the 

DIF, and other receivables). 

Estimated cash recoveries from the management and 

disposition of assets that are used to determine the allowance 

for losses are based on asset recovery rates from severa l 

sources, which may include the following: actual or pending 

institution-specific asset disposition data, failed institutionspecific asset valuation data, aggregate asset valuation data 

on several recently failed or troubled institutions, sampled 

asset valuation data, and empirical asset recovery data based 

on failures since 2007. Methodologies for determining the 

asset recovery rates incorporate estimating future cash 

recoveries, net of applicable liquidation cost estimates, and 

discounting based on market-based risk factors applicable to 

a given asset’s type and quality. The resulting estimated cash 

recoveries are then used to derive the allowance for loss on 

the receivables from these resolutions. 

Note that estimated asset recoveries are regularly evaluated 

during the year, but remain subject to uncertainties because 

of potential changes in economic and market conditions, 

which may cause the DIF’s actual recoveries to vary 

significantly from current estimates. 

For failed institutions resolved using a whole bank purchase 

and assumption transaction with an accompanying sharedloss agreement (SLA), the FDIC agreed to share in future losses 

and recoveries experienced by the acquirer on those assets 

covered under the agreement. The projected shared-loss 

payments on the covered assets sold to the acquiring 

institution, which were included in the receiverships’ sharedloss liabilities, were considered in calculating the DIF’s 

allowance for loss on the receivables from these resolutions. 

As shared-loss claims were asserted and proven, 

receiverships typically satisfied these shared-loss payments 

using available liquidation funds. 

The final SLA expired in November 2021. As a result, the 

related shared-loss covered assets and net estimated liability 

were zero at December 31, 2021, compared to $3.1 billion and 

$8 million, respectively, atDecember 31, 2020. The year-overyear decreases in the shared–loss covered assets and net 

estimated liability were primarily due to settlements of final 

claim certificates for expired agreements and the natural or 

early termination of SLAs, respectively. 

CONCENTRATION OF CREDIT RISK 

Financial instruments that potentially subject the DIF to 

concentrations of credit risk are receivables from resolutions. 

4 
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NOTES TO THE FINANCIAL STATEMENTS 

December 31 

2021 

December 31 

2020 

Land 

Buildings (including building and leasehold improvements) 

Application software (includes work-in-process) 

Furniture, fixtures, and equipment 

Accumulated depreciation 

$ 37,352 

349,066 

101,362 

45,221 

(205,874) 

$ 37,352 

344,002 

129,410 

58,363 

(248,047) 

Total $ 327,127 $ 321,080 

The repayment of these receivables is influenced by 

recoveries on assets held by receiverships. As of December 

31, 2021, $43 million, or 49 percent, of assets in liquidation is 

concentrated in residual certificates collateralized by 

underlying residential mortgage-backed securities or loans 

(see Note 8). 

5. Property and Equipment, Net 

Depreciation expense was $44 million and $50 million for 2021 

and 2020, respectively. The “Property and equipment, net” 

line item on the Balance Sheet consisted of the following 

components (dollars in thousands). 

6. Leases 

The FDIC has operating leases for office space, a data center , 

and certain equipment. The lease agreements generally 

contain escalation clauses resulting in adjustments, usually 

on an annual basis. Many leases contain one or more options 

to extend, with renewal terms that can extend the lease term 

from one to five years, and some leases may include options 

to terminate. The following table provides relevan t 

information regarding FDIC operating leases for the years 

ended December 31, 2021 and 2020 (dollars in thousands). 

December 31 December 31 

2021 2020 

Operating lease cost $ 39,466 $ 48,481 

Cash paid for amounts included in the measurement 

of operating leases $ 48,400 48,263 

ROU assets obtained in exchange for new operating 

lease liabilities $ 1,656 22,817 

Weighted Average 

Remaining lease term (in years) 2.75 3.35

 Discount rate 1.24% 1.38% 

The following table provides a maturity analysis of the FDIC’s 

operating lease liabilities as of December 31, 2021 (dollars in 

thousands). 

December 31 

2021 

2022 

2023 

2024 

2025 

2026 

2027/Thereafter 

$ 37,734 

26,111 

22,438 

5,594 

719 

12 

Total future minimum lease payments $ 92,608 

Less: Imputed interest (1,651) 

Total operating lease liabilities $ 90,957 

As of December 31, 2021, the FDIC has additional operating 

leases with future payments totaling $31 million for office 

space, which commence after December 31, 2021, and are not 

included in the amounts presented above. 

7. Contingent Liabilities 

ANTICIPATED FAILURE OF INSURED INSTITUTIONS 

The DIF records a contingent liability and a loss provision for 

DIF-insured institutions that are likely to fail when the liability 

is probable and reasonably estimable, absent some favorable 

event such as obtaining additional capital or merging. The 

contingent liability is derived by applying expected failure 

rates and loss rates to the institutions based on supervisor y 

ratings, balance sheet characteristics, and projected capital 

levels. 

The banking industry’s financial condition and performance 

improved in 2021 from the economic stress related to the 

COVID-19 pandemic that was first experienced in 2020. 

During 2021, no institutions failed. According to the third 

quarter 2021 financial data submitted by DIF-insur ed 

institutions, the banking industry reported net income for the 

first nine months of $216 billion, an increase of 145 percent 

from the same period a year ago. The increase in net income 

was primarily the result of negative provision expenses as 

described below. 

Provisions for credit losses for the first nine months of 2021 

were negative $30.4 billion, as compared to $129.1 billion 

over the same time period a year ago, reflecting economic 

improvements and positive credit quality metrics. The total 

5 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 136 

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DEPOSIT INSURANCE FUND 

noncurrent loan rate was 0.94 percent as of September 30, 

2021, down 23 basis points from the same quarter in 2020 and 

well below the most recent high of 5.46 percent in March 31, 

2010. 

Due to the improvement in net income as well as growth in 

low-risk assets, risk-based capital levels improved in 2021, as 

compared to the same period in 2020, with total risk-based 

capital increasing 27 basis points to 15.63 percent. 

Despite the improvement in net income, the low interest-rate 

environment continues to challenge banks. During third 

quarter 2021, the average quarterly net interest margin (NIM) 

for the banking industry rose modestly to 2.56 percent, but 

remains one of the lowest NIMs ever reported in the FDIC’s 

Quarterly Banking Profile. 

Largely because of fiscal and monetary policy, deposits 

continued to grow, increasing by $2 trillion, or 12.0 percent, 

since September 30, 2020. 

The contingent liability decreased as of December 31, 2021, 

compared to December 31, 2020. The DIF recorded 

contingent liabilities totaling $21 million and $79 million as of 

December 31, 2021 and 2020, respectively. The decrease 

largely reflects improvements in the banking industry’s 

financial condition and performance noted above. 

During 2020, due to elevated risk and uncertainty arising from 

the effects of the COVID-19 pandemic on the banking industry, 

the FDIC supplemented its methodology for calculating the 

contingent liability to capture vulnerable institutions deemed 

likely to have failure risk not identified by the standard 

approach. That supplemental methodology incorporated a 

number of factors, including lending concentrations and 

various financial metrics, and resulted in a supplementa l 

liability of $44 million as of December 31, 2020 that was 

included in estimated losses for anticipated failures. As of 

December 31, 2021, the elevated risk and uncertainty that led 

to the need for a supplemental methodology in 2020 had 

subsided with regular supervision examinations. As of 

December 31, 2021, it was determined the standard approach 

appropriately captured failure risk and that a supplementa l 

liability was not considered necessary. 

In addition to the recorded contingent liabilities, the FDIC has 

identified risks in the financial services industry that could 

result in additional losses to the DIF, should potentially 

vulnerable insured institutions ultimately fail. As a result of 

these risks, the FDIC believes that it is reasonably possible 

that the DIF could incur additional estimated losses of 

approximately $68 million as of December 31, 2021, 

compared to $1.1 billion at year-end 2020. The actual losses, 

if any, will largely depend on future economic and market 

conditions and could differ materially from this estimate. 

During 2021, the economy supported banking conditions as 

Gross Domestic Product (GDP) grew to above its prepandemic peak. Although economic growth slowed in third 

quarter 2021, due to waning fiscal support to the economy 

and supply constraints to production, the economy 

continued to expand and sustain bank loan growth. The 

December 2021 Blue Chip Economic Indicators consensus 

forecast for GDP growth is 5.6 percent for full-year 2021, up 

from negative 3.4 percent in 2020 and well above its prepandemic growth rate. The labor market recovery continued, 

and the unemployment rate continued to decline. While the 

labor market has not fully recovered from deep job losses in 

2020, the labor market tightened with higher wages and 

worker shortages in many industries. Inflation increased to 

multi-decade highs during the year reflecting higher energy 

prices, supply chain issues, and strong demand. Monetar y 

policy remained accommodative with interest rates near zero 

during the year but, responding to developments in inflation 

and labor markets, the Federal Reserve began to tighten 

monetary policy in November 2021 by slowing the pace of its 

asset purchases. Although the improved economy boosted 

bank profitability, key risks for banks remain. Potential credit 

strains may emerge as pandemic support programs for 

borrowers begin to wind down and loan forbearance periods 

end. In addition, changing pandemic developments may shift 

economic conditions and interest rates, which could impact 

banking sector profitability. The FDIC continues to evaluate 

ongoing risks to affected institutions in light of existing 

economic and financial conditions, and the extent to which 

such risks may put stress on the resources of the insurance 

fund. 

LITIGATION LOSSES 

The DIF records an estimated loss for unresolved legal cases 

to the extent that those losses are considered probable and 

reasonably estimable. The FDIC recorded probable litigation 

losses of $200 thousand for the DIF as of December 31, 2021 

and 2020, respectively. In addition, the FDIC has identified 

reasonably possible losses from unresolved cases of $1 

million and $650 thousand as of December 31, 2021 and 2020, 

respectively. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 137 

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8. Other Contingencies 

PURCHASE AND ASSUMPTION INDEMNIFICATION 

In connection with purchase and assumption agreements for 

resolutions, the FDIC, in its receivership capacity, generally 

indemnifies the purchaser of a failed institution’s assets and 

liabilities in the event a third party asserts a claim against the 

purchaser unrelated to the explicit assets purchased or 

liabilities assumed at the time of failure. The FDIC, in its 

corporate capacity, is a secondary guarantor if a receivership 

is unable to pay. These indemnifications generally extend for 

a term of six years after the date of institution failure. The 

FDIC is unable to estimate the maximum potential liability for 

these types of guarantees as the agreements do not specify a 

maximum amount and any payments are dependent upon 

the outcome of future contingent events, the nature and 

likelihood of which cannot be determined at this time. During 

2021 and 2020, the FDIC, in its corporate capacity, made no 

indemnification payments under such agreements, and no 

amount has been accrued in the accompanying financial 

statements with respect to these indemnification guarantees. 

FDIC GUARANTEED DEBT OF STRUCTURED TRANSACTION S 

The FDIC, as receiver, used structured transactions 

(securitizations and structured sales of guaranteed notes 

(SSGNs) or collectively, “trusts”) to dispose of residentia l 

mortgage loans, commercial loans, and mortgage-backed 

securities held by the receiverships. For these transactions, 

certain loans or securities from failed institutions were pooled 

and transferred into a trust structure. The trusts issued senior 

and/or subordinated debt instruments and owner trust or 

residual certificates collateralized by the underlying 

mortgage-backed securities or loans. 

From March 2010 through March 2013, the receiverships 

transferred a portfolio of loans with an unpaid principal 

balance of $2.4 billion and mortgage-backed securities with a 

book value of $6.4 billion to 11 trusts. Private investor s 

purchased the senior notes issued by the trusts for $6.2 billion 

in cash and the receiverships held the subordinated debt 

instruments and owner trust or residual certificates. In 

exchange for a fee, the FDIC, in its corporate capacity, 

guarantees the timely payment of principal and interest due 

on the senior notes. 

The last guarantee terminated in December 2021 after the 

final repayment of the outstanding note balance. As of yearend 2020, three trusts remained with collateral balances of 

$459 million and a maximum loss exposure to the FDIC, as 

guarantor, of $46 million. 

NOTES TO THE FINANCIAL STATEMENTS 

Any estimated loss to the DIF from the guarantees was based 

on an analysis of the expected guarantee payments by the 

FDIC. The estimated cash flows from the assets of the three 

remaining trusts at year-end 2020 provided sufficient 

coverage to fully pay the debts. Through the end of the last 

guarantee, the FDIC collected $167 million in guarantee fees 

and made one guarantee payment of $4 million in 2020. 

The FDIC, in its corporate capacity, did not provide any form 

of financial or other type of support for structured 

transactions that it was not previously contractually required 

to provide. 

9. Assessments

The FDIC deposit insurance assessment system is mandated 

by section 7 of the FDI Act and governed by part 327 of title 12 

of the Code of Federal Regulations (12 CFR Part 327). The riskbased system requires the payment of quarterly assessments 

by all IDIs. 

In response to the Dodd-Frank Act, the FDIC implemented 

several changes to the assessment system and developed a 

comprehensive, long-term fund management plan. The longterm fund management plan is designed to restore and 

maintain a positive fund balance for the DIF even during a 

banking crisis and achieve moderate, steady assessment 

rates throughout any economic cycle. The DIF reserve ratio, 

which is the ratio of the DIF balance to estimated insured 

deposits, is a key measure of fund adequacy. Summarized 

below are key longer-term provisions of the plan. 

• The FDIC Board of Directors designates a reserve ratio 

for the DIF and publishes the designated reserve ratio 

(DRR) before the beginning of each calendar year, as 

required by the FDI Act. Accordingly, in December 

2021, the FDIC published a notice maintaining the DRR 

at 2 percent for 2022. The DRR is an integral part of the

FDIC’s comprehensive, long-term management plan 

for the DIF and is viewed as a long-range, minimum 

goal for the reserve ratio. 

• The FDIC suspended dividends indefinitely, and, in lieu 

of dividends, prescribes progressively lower 

assessment rates when the reserve ratio exceeds 2 

percent and 2.5 percent. 

The Dodd-Frank Act increased the minimum reserve ratio for 

the DIF to 1.35 percent, up from the previous statutor y 

minimum of 1.15 percent. This minimum was required to be 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 138 

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DEPOSIT INSURANCE FUND 

achieved by September 30, 2020, and the Dodd-Frank Act 

mandated that the FDIC offset the effect of increasing the 

minimum reserve ratio on institutions with less than $10 

billion in total assets (small banks). To implement this 

requirement, the FDIC provided for credits against quarterly 

assessments to small banks for their contribution to the 

growth in the reserve ratio from 1.15 percent to 1.35 percent. 

After the reserve ratio of the DIF exceeded 1.35 percent by 

reaching 1.36 percent as of September 30, 2018, the FDIC 

awarded small bank assessment credits of $765 million. As of 

year-end 2020, all credits have been used ($206 million in 

2020 and $559 million in 2019). 

As a result of the impact on the economy from the COVID-19 

pandemic and related stimulus programs, the FDIC took 

several actions, including initiating stimulus program offsets. 

The FDIC issued a final rule to mitigate the deposit insurance 

assessment effects of IDIs participating in certain stimulus 

programs, such as the Paycheck Protection Program. Absent 

the changes permitted by the final rule, some IDIs’ 

assessments would have increased. In accordance with the 

final rule, the FDIC applied the changes to IDI assessments 

starting in the second quarter of 2020. 

If the reserve ratio falls below 1.35 percent, or the FDIC 

projects that it will within six months, the FDIC generally must 

implement a Restoration Plan that will return the DIF to 1.35 

percent within eight years. In September 2020, the FDIC 

established a Restoration Plan when the reserve ratio fell 

below 1.35 percent, to 1.30 percent as of June 30, 2020, due 

to extraordinary insured deposit growth in the first and 

second quarters of 2020. Under the Restoration Plan, the FDIC 

will maintain the current schedule of assessment rates for all 

IDIs and closely monitor the factors affecting the reserve ratio, 

updating the plan as necessary. To determine whether the 

reserve ratio has reached the statutory minimum, the FDIC 

will rely on the reserve ratio as of September 30, 2028. 

ASSESSMENT REVENUE 

Annual assessment rates averaged approximately 3.6 cents 

and 4.0 cents per $100 of the assessment base in 2021 and 

2020, respectively. The assessment base is generally defined 

as average consolidated total assets minus average tangible 

equity (measured as Tier 1 capital) of an IDI during the 

assessment period. 

The “Assessments receivable” line item on the Balance Sheet 

of $1.7 billion and $1.9 billion represents the estimated 

premiums due from IDIs for the fourth quarter of 2021 and 

2020, respectively. The actual deposit insurance assessments 

for the fourth quarter of 2021 will be billed and collected at 

the end of the first quarter of 2022. The DIF recognized $7.1 

billion as assessment revenue from institutions during both 

2021 and 2020. 

PENDING LITIGATION FOR UNDERPAID ASSESSMENTS 

On January 9, 2017, the FDIC filed suit in the United States 

District Court for the District of Columbia (and amended this 

complaint on April 7, 2017), alleging that Bank of America, 

N.A. (BoA) underpaid its insurance assessments for multiple 

quarters based on the underreporting of counterparty 

exposures. In total, the FDIC alleges that BoA underpaid 

insurance assessments by $1.12 billion, including interest for 

the quarters ending March 2012 through December 2014. The 

FDIC invoiced BoA for $542 million and $583 million 

representing claims in the initial suit and the amended 

complaint, respectively. BoA has failed to pay these past due 

amounts. Pending resolution of this matter, BoA has fully 

pledged security with a third-party custodian pursuant to a 

security agreement with the FDIC. As of December 31, 2021, 

the total amount of unpaid assessments (including accrued 

interest) was $1.19 billion. For the years ending December 31, 

2021 and 2020, the impact of this litigation is not reflected in 

the financial statements of the DIF. 

RESERVE RATIO 

As of September 30, 2021 and December 31, 2020, the DIF 

reserve ratio was 1.27 percent and 1.29 percent, respectively. 

10. Return of Unclaimed Insured Deposits 

The Unclaimed Deposits Amendments Act of 1993 (UDAA), 

Public Law 103-44, amended the FDI Act effective June 28, 

1993 (codified as 12 U.S.C. § 1822 (e)). In accordance with the 

UDAA, the FDIC delivers to the appropriate states insured 

bank deposits not claimed within 18 months of the date when 

the FDIC initiates payment of insured deposits as a part of a 

bank failure, unless the appropriate state declines to accept 

custody. After receipt, states have custody of the deposits for 

10 years, during which time a state treats deposits as 

unclaimed property. At the end of the 10 years, states are 

required to transfer any remaining unclaimed deposits to the 

FDIC and those deposits become the FDIC’s property. As of 

December 31, 2021, states have returned $103 million of 

unclaimed insured deposits to the FDIC, which the DIF 

recognized as revenue. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 139 

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NOTES TO THE FINANCIAL STATEMENTS 

11. Operating Expenses 

The “Operating expenses” line item on the Statement of 

Income and Fund Balance consisted of the following 

components (dollars in thousands). 

December 31 

2021 

December 31 

2020 

Salaries and benefits $ 

Outside services 

Travel 

Buildings and leased space 

Software/Hardware maintenance 

Depreciation of property and equipment 

Other 

1,322,457 

267,279 

9,548 

84,496 

107,265 

43,764 

24,569 

$ 1,299,792 

271,885 

24,990 

90,496 

103,341 

49,902 

26,227 

Subtotal 

Less: Expenses billed to resolution entities and others 

1,859,378 

(16,655) 

1,866,633 

(20,142) 

Total $ 1,842,723 $ 1,846,491 

12. Provision for Insurance Losses

The “Provision for insurance losses” line item on the Statement of Income and Fund Balance is impacted by the Balance Sheet 

line item activity depicted in the table below. The table primarily analyzes the changes in estimated losses for actual and 

anticipated failures (dollars in millions). 

December 31, 2021 Contingent Liabilities for: 

Provision for Receivables Allowance Anticipated 

Insurance Losses from Resolutions for Losses Failures Litigation Losses 

Balance at January 1, 2021 $ 0 $ 61,341 $ (59,974) $ (79) $ 0

Change in contingent liability for anticipated failures, net 1 (58) 58 

Adjustments to estimated losses for prior year failures (85) 85 

Disbursements for prior year failures 12 

Recoveries from resolutions (574) 

Write-offs for inactivated receiverships (4,424) 4,425

 Other (127) 121 

Balance at December 31, 2021 56,228 $ (55,343) $ (21) $ 0 

1

Represents institutions that were added or removed from the contingent liability, as well as the change in the contingent liability for institutions that remained in the liability year-overyear. 

(1) 

0 

$ (144) $ 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 140 

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DEPOSIT INSURANCE FUND 

December 31, 2020 Contingent Liabilities for: 

Provision for Receivables Allowance Anticipated Guarantee Payments 

Insurance Losses from Resolutions for Losses Failures and Litigation Losses 

Balance at January 1, 2020 $ 0 $ 63,982 $ (61,313) $ (94) $ (34) 

Estimated losses for current year failures 99 (99) 

Change in contingent liability for anticipated failures, net 1 (15) 15 

Adjustments to estimated losses for prior year failures (237) 237 

Disbursements for failures 167 

Recoveries from resolutions2 (1,564) 

Write-offs for inactivated receiverships (1,145) 1,145

 Other (99) 56 34 

Balance at December 31, 2020 61,341 $ (59,974) $ (79) $ 0 

1

Represents institutions that were added or removed from the contingent liability, as well as the change in the contingent liability for institutions that remained in the liability year-overyear. 

2

Includes $298 million of non-cash recoveries from receiverships. 

0 

(4) 

$ (157) $ 

13. Employee Benefits

PENSION BENEFITS AND SAVINGS PLANS 

Eligible FDIC employees (permanent and term employees 

with appointments exceeding one year) are covered by the 

federal government retirement plans, either the Civil Service 

Retirement System (CSRS) or the Federal Employees 

Retirement System (FERS). Although the DIF contributes a 

portion of pension benefits for eligible employees, it does not 

account for the assets of either retirement system. The DIF 

also does not have actuarial data for accumulated plan 

benefits or the unfunded liability relative to eligible 

employees. These amounts are reported on and accounted 

for by the U.S. Office of Personnel Management (OPM). 

Under the Federal Thrift Savings Plan (TSP), the FDIC 

provides FERS employees with an automatic contribution of 

1 percent of pay and an additional matching contribution up 

to 4 percent of pay. CSRS employees also can contribute to 

the TSP, but they do not receive agency matching 

contributions. Eligible FDIC employees may also participate 

in an FDIC-sponsored tax-deferred 401(k) savings plan with 

an automatic contribution of 1 percent of pay and an 

additional matching contribution up to 4 percent of pay. The 

expenses for these plans are presented in the table below 

(dollars in thousands). 

December 3

2021 

December 31 

2020 

Civil Service Retirement System 

Federal Employees Retirement System (Basic Benefit) 

Federal Thrift Savings Plan 

FDIC Savings Plan 

$ 912 

151,797 

39,266

39,978

$ 1,189 

137,989 

37,149 

39,578 

Total $ 231,953 $ 215,905 

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 

The DIF has no postretirement health insurance liability since 

all eligible retirees are covered by the Federal Employees 

Health Benefits (FEHB) program. The FEHB is administer ed 

and accounted for by the OPM. In addition, OPM pays the

employer share of the retiree’s health insurance premiums. 

The FDIC provides certain life and dental insurance coverage 

for its eligible retirees, the retirees’ beneficiaries, and covered 

dependents. Retirees eligible for life and dental insurance 

coverage are those who have qualified due to (1) immediate 

enrollment upon appointment or five years of participation in 

the plan and (2) eligibility for an immediate annuity. The life 

insurance program provides basic coverage at no cost to 

retirees and allows for converting optional coverage to directpay plans. For the dental coverage, retirees are responsible 

for a portion of the premium. 

The FDIC has elected not to fund the postretirement life and 

dental benefit liabilities. As a result, the DIF recognized the 

underfunded status (the difference between the accumulated 

postretirement benefit obligation and the plan assets at fair 

value) as a liability. Since there are no plan assets, the plan’s 

benefit liability is equal to the accumulated postretirement 

benefit obligation. 

Postretirement benefit obligation, gain and loss, and expense 

information included in the Balance Sheet and Statement of 

Income and Fund Balance are summarized as follows (dollars 

in thousands). 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 141 

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Accumulated postretirement benefit obligation 

335,977 

(97,922) 

0

$ (37,490) 

2,364 

$ 16,236 

recognized in Postretirement benefit liability $ 331,599 $ 

Cumulative net actuarial (loss) recognized in 

accumulated other comprehensive income: Unrealized 

postretirement benefit (loss) $ (82,723) $ 

Amounts recognized in other comprehensive income: 

Unrealized postretirement benefit gain (loss) 

Actuarial gain (loss) $ 15,199 $ (37,490) 

Prior service credit 0 

 Total $ 15,199 

Net periodic benefit costs recognized in Operating 

expenses

 Service cost $ 6,365 $ 5,106 

Interest cost 7,128 8,766

 Net amortization out of other comprehensive

 i ncome 4,712 

 Total $ 18,205 

The year-over-year decrease in the accumulated 

postretirement benefit obligation of $4 million is primarily 

attributable to an increase in the discount rate used to 

present value expected benefit payments. The discount rate 

increased from 2.65 percent to 2.82 percent at year-end 2021 

to reflect changes in the economic environment. 

The annual postretirement contributions and benefits paid 

are included in the table below (dollars in thousands). 

December 31 December 31 

2021 2020 

December 31 December 31 

2021 2020 

Employer contributions 

Plan participants' contributions 

Benefits paid 

$ 7,384 

$ 1,148 

$ (8,532) 

$ 7,211 

$ 1,091 

$ (8,302) 

The expected contributions for the year ending December 31, 

2022, are $10 million. Expected future benefit payments for 

each of the next 10 years are presented in the following table 

(dollars in thousands). 

NOTES TO THE FINANCIAL STATEMENTS 

Assumptions used to determine the amount of the 

accumulated postretirement benefit obligation and the net 

periodic benefit costs are summarized as follows. 

Discount rate for future benefits (benefit obligation) 2.82% 

Rate of compensation increase 2.22% 2.18% 

Discount rate (benefit cost) 2.65% 3.46% 

Dental health care cost-trend rate

 Assumed for next year 3.50% 3.50% 

Ultimate 3.50% 3.50%

 Year rate will reach ultimate 2022 

2.65% 

2021 

14. Off-Balance-Sheet Exposure

DEPOSIT INSURANCE 

Estimates of insured deposits are derived primarily from 

quarterly financial data submitted by IDIs to the FDIC and 

represent the accounting loss that would be realized if all IDIs 

were to fail and the acquired assets provided no recoveries. 

As of September 30, 2021 and December 31, 2020, estimated 

insured deposits for the DIF were $9.6 trillion and $9.1 trillion, 

respectively. 

15. Fair Value of Financial Instruments 

As of December 31, 2021 and 2020, financial assets recognized 

and measured at fair value on a recurring basis include cash 

equivalents (see Note 2) of $4 billion and $3.3 billion, 

respectively, and the investment in U.S. Treasury securities 

(see Note 3) of $114.6 billion and $110.5 billion, respectively. 

The valuation is considered a Level 1 measurement in the fair 

value hierarchy, representing quoted prices in active markets 

for identical assets. Other financial assets and liabilities, 

measured at amortized cost, are the receivables from 

resolutions, assessments receivable, interest receivable on 

investments, other short-term receivables, and accounts 

payable and other liabilities. 

December 31 December 31 

2021 2020 

2022 2023 2024 2025 2026 2027-2031 

$9,127 $9,663 $10,227 $10,742 $11,289 $62,810 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 142 

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DEPOSIT INSURANCE FUND 

16. Information Relating to the Statement of Cash Flows 

The following table presents a reconciliation of net income to 

net cash from operating activities (dollars in thousands). 

December 31 December 31 

2021 2020 

Operating Activities 

Net Income: $ 6,448,140 $ 7,104,636 

Adjustments to reconcile net income to net cash 

provided by operating activities: 

Amortization of U.S. Treasury securities 2,547,445 2,229,257 

Depreciation on property and equipment 43,764 49,902 

Retirement of property and equipment 3,929 617 

Provision for insurance losses (143,681) (157,309) 

Unrealized gain (loss) on postretirement benefits 15,199 (37,490) 

Change in Assets and Liabilities: 

Decrease (Increase) in assessments receivable 237,967 (706,548) 

Decrease (Increase) in interest receivable and other assets 441,041 (138,038) 

Decrease in receivables from resolutions 566,646 1,445,147 

Decrease (Increase) in operating lease right-of-use assets 27,215 (112,453) 

Increase in accounts payable and other liabilities 4,788 36,166 

(Decrease) Increase in operating lease liabilities (28,502) 119,459 

(Decrease) Increase in postretirement benefit liability (4,378) 46,515 

(Decrease) in guarantee payment contingent liability 0 (33,831) 

(Decrease) in liabilities due to resolutions (14) (345,457) 

Net Cash Provided by Operating Activities $ 10,159,559 $ 9,500,573 

17. Subsequent Events 

Subsequent events have been evaluated through February 

10, 2022, the date the financial statements are available to be 

issued. Based on management’s evaluation, there were no 

subsequent events requiring disclosure. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 143 

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Federal Deposit Insurance Corporation 

FSLIC Resolution Fund Balance Sheet 

As of December 31 

(Dollars in Thousands) 2021 2020 

ASSETS

 Cash and cash equivalents 

 Other assets 

$ 907,625 

201 

$ 906,835 

612 

Total Assets $ 907,826 $ 907,447 

LIABILITIES

 Accounts payable and other liabilities $ 8 $ 17 

Total Liabilities 8 17 

RESOLUTION EQUITY (NOTE 5)

 Contributed capital 

 Accumulated deficit 

125,469,317 

(124,561,499) 

125,469,317 

(124,561,887) 

Total Resolution Equity 907,818 907,430 

Total Liabilities and Resolution Equity $ 907,826 $ 907,447 

The accompanying notes are an integral part of these financial statements. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 144 

FINANCIAL SECTION

 

 

 

Federal Deposit Insurance Corporation 

FSLIC Resolution Fund Statement of Income and Accumulated Deficit 

For the Years Ended December 31 

(Dollars in Thousands) 2021 

REVENUE

 Interest on U.S. Treasury securities $ 374 $ 3,314

2020 

 Other revenue 214 

Total Revenue 588 

EXPENSES AND LOSSES

721 

4,035 

 Operating expenses 227 320

 Losses related to thrift resolutions (27) 

Total Expenses and Losses 200 

Net Income 388 4,010 

(295) 

25 

Accumulated Deficit - Beginning (124,561,887) (124,565,897) 

Accumulated Deficit - Ending $ (124,561,499) $ (124,561,887) 

The accompanying notes are an integral part of these financial statements. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 145 

FINANCIAL SECTION

 

 

 

 

Federal Deposit Insurance Corporation 

FSLIC Resolution Fund Statement of Cash Flows 

For the Years Ended December 31 

(Dollars in Thousands) 2021 2020 

OPERATING ACTIVITIES 

Provided by: 

Interest on U.S. Treasury securities $ 

Recoveries from thrift resolutions 

Used by: 

Operating expenses 

374 

670 

(254) 

$ 3,314 

941 

(331) 

Net Cash Provided by Operating Activities 

FINANCING ACTIVITIES 

Used by: 

Payment to Resolution Funding Corporation (Note 5) $ 

790 

0 

3,924 

$ (20,000) 

Net Cash (Used) in Financing Activities 0 (20,000) 

Net Increase (Decrease) in Cash and Cash Equivalents 

Cash and Cash Equivalents - Beginning 

Cash and Cash Equivalents - Ending $ 

790 

906,835 

907,625 

(16,076) 

922,911 

$ 906,835 

The accompanying notes are an integral part of these financial statements. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 146 

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FSLIC RESOLUTION FUND 

NOTES TO THE FINANCIAL STATEMENTS 

December 31, 2021 and 2020 

1. Operations/Dissolution of the FSLIC Resolution Fund 

OVERVIEW 

The Federal Deposit Insurance Corporation (FDIC) is the 

independent deposit insurance agency created by Congress 

in 1933 to maintain stability and public confidence in the 

nation’s banking system. Provisions that govern the FDIC’s 

operations are generally found in the Federal Deposit 

Insurance (FDI) Act, as amended (12 U.S.C. 1811, et seq). In 

accordance with the FDI Act, the FDIC, as administrator of the 

Deposit Insurance Fund (DIF), insures the deposits of banks 

and savings associations (insured depository institutions). In 

cooperation with other federal and state agencies, the FDIC 

promotes the safety and soundness of insured depositor y 

institutions by identifying, monitoring, and addressing risks 

to the DIF. 

In addition to being the administrator of the DIF, the FDIC is 

the administrator of the Federal Savings and Loan Insurance 

Corporation (FSLIC) Resolution Fund (FRF). As such, the FDIC 

is responsible for the sale of remaining assets and 

satisfaction of liabilities associated with the former FSLIC 

and the former Resolution Trust Corporation (RTC). The FDIC 

maintains the DIF and the FRF separately to support their 

respective functions. 

The FSLIC was created through the enactment of the 

National Housing Act of 1934. The Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (FIRREA) 

abolished the insolvent FSLIC and created the FRF. At that 

time, the assets and liabilities of the FSLIC were transferred 

to the FRF – except those assets and liabilities transferred to 

the newly created RTC – effective on August 9, 1989. Further, 

the FIRREA established the Resolution Funding Corporation 

(REFCORP) to provide part of the initial funds used by the RTC 

for thrift resolutions by authorizing REFCORP to issue debt 

obligations. The REFCORP issued debt obligations in the 

form of long-term bonds ranging in maturity from 2019 to 

2030. 

The RTC Completion Act of 1993 terminated the RTC as of 

December 31, 1995. All remaining assets and liabilities of the 

RTC were transferred to the FRF on January 1, 1996. The FRF 

consists of two distinct pools of assets and liabilities: one 

composed of the assets and liabilities of the FSLIC 

transferred to the FRF upon the dissolution of the FSLIC (FRFFSLIC), and the other composed of the RTC assets and 

liabilities (FRF-RTC). The assets of one pool are not available 

to satisfy obligations of the other. 

OPERATIONS/DISSOLUTION OF THE FRF 

The FRF will continue operations until all of its assets are sold 

or otherwise liquidated and all of its liabilities are satisfied. 

Any funds remaining in the FRF-FSLIC will be paid to the U.S. 

Treasury. Any remaining funds of the FRF-RTC will be 

distributed to the REFCORP to pay interest on the REFCORP 

bonds. In addition, the FRF-FSLIC has available until 

expended $602 million in appropriations to facilitate, if 

required, efforts to wind up the resolution activity of the FRFFSLIC. 

The FDIC has extensively reviewed and cataloged the FRF's 

remaining assets and liabilities. Some of the unresolved 

issues are: 

• criminal restitution orders (generally have from 1 to 

26 years remaining to enforce); 

• collections of judgments obtained against officers 

and directors and other professionals responsible 

for causing or contributing to thrift losses (generally 

have up to 10 years remaining to enforce, unless the 

judgments are renewed or are covered by the 

Federal Debt Collections Procedures Act, which will 

result in significantly longer periods for collection of 

some judgments); 

• liquidation/disposition of residual assets purchased 

by the FRF from terminated receiverships; and 

• Affordable Housing Disposition Program monitoring 

(the last agreement expires no later than 2045; see 

Note 4). 

The FRF could realize recoveries from criminal restitution 

orders and professional liability claims. However, any 

potential recoveries are not reflected in the FRF’s financial 

statements, given the significant uncertainties surrounding 

the ultimate outcome. 

On April 1, 2014, the FDIC concluded its role as receiver, on 

behalf of the FRF, when the last active receivership was 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 147 

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FSLIC RESOLUTION FUND 

terminated. In total, 850 receiverships were liquidated by the 

FRF and the RTC. To facilitate receivership terminations, the 

FRF, in its corporate capacity, acquired the remaining 

receivership assets that could not be liquidated during the 

life of the receiverships due to restrictive clauses and other 

impediments. These assets are included in the “Other 

assets” line item on the Balance Sheet. 

During the years of receivership activity, the assets held by 

receivership entities, and the claims against them, were 

accounted for separately from the FRF’s assets and liabilities 

to ensure that receivership proceeds were distributed in 

accordance with applicable laws and regulations. Also, the 

income and expenses attributable to receiverships were 

accounted for as transactions of those receiverships. The 

FDIC, as administrator of the FRF, billed receiverships for 

services provided on their behalf. 

2. Summary of Significant Accounting Policies 

GENERAL 

The financial statements include the financial position, 

results of operations, and cash flows of the FRF and are 

presented in accordance with U.S. generally accepted 

accounting principles (GAAP). During the years of 

receivership activity, these statements did not include 

reporting for assets and liabilities of receivership entities 

because these entities were legally separate and distinct, and 

the FRF did not have any ownership or beneficial interest in 

them. 

The FRF is a limited-life entity, however, it does not meet the 

requirements for presenting financial statements using the 

liquidation basis of accounting. According to Accounting 

Standards Codification Topic 205, Presentation of Financial 

Statements, a limited-life entity should apply the liquidation 

basis of accounting only if a change in the entity’s governing 

plan has occurred since its inception. By statute, the FRF is a 

limited-life entity whose dissolution will occur upon the 

satisfaction of all liabilities and the disposition of all assets. 

No changes to this statutory plan have occurred since 

inception of the FRF. 

USE OF ESTIMATES 

The preparation of the financial statements in conformity 

with GAAP requires management to make estimates and 

assumptions that affect the reported amounts of assets and 

liabilities, revenue and expenses, and disclosure of 

contingent liabilities. Actual results could differ from these 

estimates. Where it is reasonably possible that changes in 

estimates will cause a material change in the financial 

statements in the near term, the nature and extent of such 

potential changes in estimates have been disclosed. The 

estimate for the Affordable Housing Disposition Program 

indemnifications is considered significant (see Note 4). 

CASH EQUIVALENTS 

Cash equivalents are short-term, highly liquid investments 

consisting primarily of U.S. Treasury Overnight Certificates. 

RELATED PARTIES 

The nature of related parties and a description of related 

party transactions are discussed in Note 1 and disclosed 

throughout the financial statements and footnotes. 

APPLICATION OF RECENT ACCOUNTING STANDARDS 

Recent accounting standards have been deemed not 

applicable or material to the financial statements as 

presented. 

3. Goodwill Litigation 

In United States v. Winstar Corp., 518 U.S. 839 (1996), the 

Supreme Court held that when it became impossible 

following the enactment of FIRREA in 1989 for the federal 

government to perform certain agreements to count 

goodwill toward regulatory capital, the plaintiffs were 

entitled to recover damages from the United States. The 

contingent liability associated with the nonperformance of 

these agreements was transferred to the FRF on August 9, 

1989, upon the dissolution of the FSLIC. 

The FRF can draw from an appropriation provided by Section 

110 of the Department of Justice Appropriations Act, 2000 

(Public Law 106-113, Appendix A, Title I, 113 Stat. 1501A-3, 

1501A-20), such sums as may be necessary for the payment 

of judgments and compromise settlements in the goodwill 

litigation. This appropriation is to remain available until 

expended. 

All known goodwill cases have been litigated, including the 

last remaining goodwill case that was resolved in 2015. 

However, a determination regarding the continued need for 

the appropriation will be made as the FRF winds up its 

operations. 

4. Affordable Housing Disposition Program 

Required by FIRREA under section 501, the Affordable 

Housing Disposition Program (AHDP) was established in 1989 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 148 

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- -

NOTES TO THE FINANCIAL STATEMENTS 

to ensure the preservation of affordable housing for lowincome households. The FDIC, in its capacity as 

administrator of the FRF-RTC, assumed responsibility for 

monitoring property owner compliance with land use 

restriction agreements (LURAs). To enforce the property 

owners’ LURA obligation, the RTC, prior to its dissolution, 

entered into Memoranda of Understanding with 34 

monitoring agencies to oversee these LURAs. As of December 

31, 2021, 23 monitoring agencies oversee these LURAs. The 

FDIC, through the FRF, has agreed to indemnify the 

monitoring agencies for all losses related to LURA legal 

enforcement proceedings. 

From 2006 through 2018, two lawsuits against property 

owners resulted in $23 thousand in legal expenses, which 

were fully reimbursed due to successful litigation. In 2019, 

new litigation against two property owners has thus far 

resulted in legal expenses of $12 thousand. The maximum 

potential exposure to the FRF cannot be estimated as it is 

contingent upon future legal proceedings. However, loss 

mitigation factors include: (1) the indemnification may 

become void if the FDIC is not immediately informed upon 

receiving notice of any legal proceedings and (2) the FDIC is 

entitled to reimbursement of any legal expenses incurred for 

successful litigation against a property owner. AHDP 

guarantees will continue until the termination of the last 

LURA, or 2045 (whichever occurs first). As of December 31, 

2021 and 2020, no contingent liability for this 

indemnification has been recorded. 

5. Resolution Equity 

As stated in the Overview section of Note 1, the FRF is 

composed of two distinct pools: the FRF-FSLIC and the FRFRTC. The FRF-FSLIC consists of the assets and liabilities of 

the former FSLIC. The FRF-RTC consists of the assets and 

liabilities of the former RTC. Pursuant to legal restrictions, 

the two pools are maintained separately and the assets of 

one pool are not available to satisfy obligations of the other. 

Contributed capital, accumulated deficit, and resolution 

equity consisted of the following components by each pool 

(dollars in thousands). 

December 31, 2021 

FRF-FSLIC FRF-RTC FRF Consolidated 

Contributed capital $ 43,864,980 $ 81,604,337 $ 125,469,317 

Accumulated deficit (42,982,564) (81,578,935) (124,561,499) 

Total Resolution Equity $ 882,416 $ 25,402 $ 907,818 

December 31, 2020 

FRF FSLIC FRF RTC FRF Consolidated 

Contributed capital -

beginning $ 43,864,980 $ 81,624,337 $ 125,489,317 

Less: Payment to REFCORP 0 (20,000) (20,000) 

Contributed capital -

ending 43,864,980 81,604,337 125,469,317 

Accumulated deficit (42,982,914) (81,578,973) (124,561,887) 

Total Resolution Equity $ 882,066 $ 25,364 $ 907,430 

CONTRIBUTED CAPITAL 

The FRF-FSLIC and the former RTC received $43.5 billion and 

$60.1 billion from the U.S. Treasury, respectively, to fund 

losses from thrift resolutions prior to July 1, 1995. 

Additionally, the FRF-FSLIC issued $670 million in capital 

certificates to the Financing Corporation (a mixed-ownership 

government corporation established to function solely as a 

financing vehicle for the FSLIC) and the RTC issued $31.3 

billion of these instruments to the REFCORP. FIRREA 

prohibited the payment of dividends on any of these capital 

certificates. Through December 31, 2021, the FRF-FSLIC 

received a total of $2.3 billion in goodwill appropriations, the 

effect of which increased contributed capital. 

Through December 31, 2021, the FRF-RTC had returned $4.6 

billion to the U.S. Treasury and made payments of $5.2 billion 

to the REFCORP. The most recent payment to the REFCORP 

was in July of 2020 for $20 million. In addition, the FDIC 

returned $2.6 billion to the U.S. Treasury on behalf of the FRFFSLIC in 2013. These actions reduced contributed capital. 

ACCUMULATED DEFICIT 

The accumulated deficit represents the cumulative excess of 

expenses and losses over revenue for activity related to the 

FRF-FSLIC and the FRF-RTC. Approximately $29.8 billion and 

$87.9 billion were brought forward from the former FSLIC 

and the former RTC on August 9, 1989, and January 1, 1996, 

respectively. Since the dissolution dates, the FRF-FSLIC 

accumulated deficit increased by $13.2 billion, whereas the 

FRF-RTC accumulated deficit decreased by $6.3 billion. 

6. Fair Value of Financial Instruments 

At December 31, 2021 and 2020, the FRF’s financial assets 

measured at fair value on a recurring basis are cash 

equivalents (see Note 2) of $882 million. Cash equivalents are 

Special U.S. Treasury Certificates with overnight maturities 

valued at prevailing interest rates established by the U.S. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 149 

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FSLIC RESOLUTION FUND 

Treasury’s Bureau of the Fiscal Service. The valuation is 

considered a Level 1 measurement in the fair value hierarchy, 

representing quoted prices in active markets for identica l 

assets. 

7. Information Relating to the Statement of Cash Flows 

The following table presents a reconciliation of net income to 

net cash from operating activities (dollars in thousands). 

December 31 December 31 

2021 2020 

Operating Activities 

Net Income: $ 388 $ 4,010 

Change in Assets and Liabilities: 

Decrease (Increase) in other assets 411 (87) 

(Decrease) Increase in accounts payable and 

other liabilities (9) 1 

Net Cash Provided by Operating Activities $ 790 $ 3,924 

8. Subsequent Events 

Subsequent events have been evaluated through February 

10, 2022, the date the financial statements are available to be 

issued. Based on management’s evaluation, there were no 

subsequent events requiring disclosure. 
 

 

FINANCIAL SECTION 

441 G St. N.W. 

Washington, DC 20548 

Independent Auditor’s Report 

To the Board of Directors 

The Federal Deposit Insurance Corporation 

In our audits of the 2021 and 2020 financial statements of the Deposit Insurance Fund (DIF) and 

of the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund (FRF), both of 

which the Federal Deposit Insurance Corporation (FDIC) administers,1 we found 

• the financial statements of the DIF and of the FRF as of and for the years ended 

December 31, 2021, and 2020, are presented fairly, in all material respects, in accordance 

with U.S. generally accepted accounting principles; 

• although internal controls could be improved, FDIC maintained, in all material respects, 

effective internal control over financial reporting relevant to the DIF and to the FRF as of 

December 31, 2021; and 

• with respect to the DIF and to the FRF, no reportable noncompliance for 2021 with 

provisions of applicable laws, regulations, contracts, and grant agreements we tested. 

The following sections discuss in more detail (1) our report on the financial statements and on 

internal control over financial reporting and other information included with the financial 

statements;2 (2) our report on compliance with laws, regulations, contracts, and grant 

agreements; and (3) agency comments. 

Report on the Financial Statements and on Internal Control over Financial Reporting 

Opinions on the Financial Statements 

In accordance with Section 17 of the Federal Deposit Insurance Act, as amended,3 and the 

Government Corporation Control Act,4 we have audited the financial statements of the DIF and 

of the FRF, both of which FDIC administers. The financial statements of the DIF comprise the 

balance sheets as of December 31, 2021, and 2020; the related statements of income and fund 

balance and of cash flows for the years then ended; and the related notes to the financial 

statements. The financial statements of the FRF comprise the balance sheets as of 

December 31, 2021, and 2020; the related statements of income and accumulated deficit and of 

1A third fund managed by FDIC, the Orderly Liquidation Fund, established by Section 210(n) of the Dodd-Frank Wall 

Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376, 1506 (2010), is unfunded and did 

not have any transactions from its inception in 2010 through 2021. 

2Other information consists of information included with the financial statements, other than the auditor’s report. 

3Act of September 21, 1950, Pub. L. No. 797, § 2[17], 64 Stat. 873, 890, classified as amended at 12 U.S.C. § 1827. 

431 U.S.C. §§ 9101-9110. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 150 
 

 

FINANCIAL SECTION 

cash flows for the years then ended; and the related notes to the financial statements. In our 

opinion, 

• the DIF’s financial statements present fairly, in all material respects, the DIF’s financial

position as of December 31, 2021, and 2020, and the results of its operations and its cash

flows for the years then ended, in accordance with U.S. generally accepted accounting

principles, and

• the FRF’s financial statements present fairly, in all material respects, the FRF’s financial

position as of December 31, 2021, and 2020, and the results of its operations and its cash

flows for the years then ended, in accordance with U.S. generally accepted accounting

principles.

Opinions on Internal Control over Financial Reporting 

We also have audited FDIC’s internal control over financial reporting relevant to the DIF and to 

the FRF as of December 31, 2021, based on criteria established under 31 U.S.C. § 3512(c), (d), 

commonly known as the Federal Managers’ Financial Integrity Act (FMFIA). 

In our opinion, although certain internal controls could be improved, 

• FDIC maintained, in all material respects, effective internal control over financial reporting

relevant to the DIF as of December 31, 2021, based on criteria established under FMFIA,

and

• FDIC maintained, in all material respects, effective internal control over financial reporting

relevant to the FRF as of December 31, 2021, based on criteria established under FMFIA.

As discussed below in more detail, our 2021 audit continued to identify deficiencies in FDIC’s 

controls over contract documentation and payment review processes that collectively represent 

a significant deficiency in FDIC’s internal control over financial reporting.5 We considered this 

significant deficiency in determining the nature, timing, and extent of our audit procedures on 

the DIF’s and the FRF’s 2021 financial statements. 

Although the significant deficiency in internal control did not affect our opinions on the 2021 and 

2020 financial statements of the DIF and of the FRF, misstatements may occur in unaudited 

financial information reported internally and externally by FDIC because of this significant 

deficiency. 

In addition to the significant deficiency in internal control over contract documentation and 

payment review processes, we also identified other deficiencies in FDIC’s internal control over 

financial reporting that we do not consider to be material weaknesses or significant deficiencies. 

Nonetheless, these deficiencies warrant FDIC management’s attention. We have communicated 

these matters to FDIC management and, where appropriate, will report on them separately. 

5A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, 

misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal 

control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s 

financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material 

weakness, yet important enough to merit the attention by those charged with governance. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 151 
 

 

FINANCIAL SECTION 

Significant Deficiency in Internal Control over Contract Documentation and Payment Review 

Processes 

During our 2021 audit, we continued to identify deficiencies in contract documentation and 

payment review processes that collectively represent a significant deficiency in FDIC’s internal 

control over financial reporting. Specifically, as in the prior year,6 FDIC did not consistently 

implement controls over contract documentation and payment review processes. FDIC 

oversight managers are responsible for verifying that contractors deliver purchased goods or 

services and perform their work according to contract terms and delivery schedules. Oversight 

managers also monitor the expenditures of funds in relation to contract dollar ceilings and 

approve invoices for payment. FDIC contracting officers, acting within the scope of their 

authority to contract on behalf of FDIC, are responsible for entering into, administering, and 

terminating contracts; making related decisions; and executing contract modifications. We 

identified several deficiencies in FDIC’s implementation of these internal controls that increased 

the risks that improper payments could occur and operating expenses and accounts payable 

could be misstated. For example: 

• We found five instances where an oversight manager approved and paid a contractor

invoice that did not agree to the terms of the contract, resulting in an improper payment.

• We found three additional instances where the oversight managers approved contract

payments without obtaining or reviewing sufficient documentation to support the invoices.

• We found three instances of ineffective controls over contract modification documentation

because of a contracting officer not implementing existing FDIC acquisition policies and

procedures. The three instances included (1) a contract modification that was signed by a

contracting officer with insufficient warrant authority; (2) a lack of contract modification

documentation for a contract ceiling increase correction; and (3) a lack of contract

modification documentation reflecting a contract’s expired status, as it was superseded by

another contract before its initial expiration date, before it was closed out.

According to GAO’s Standards for Internal Control in the Federal Government,7 agency 

management is responsible for establishing and maintaining effective internal control to serve 

as the first line of defense in safeguarding assets and preventing and detecting errors and fraud. 

Further, GAO’s Framework for Assessing the Acquisition Function for Federal Agencies,8 states 

that when financial data are not useful, relevant, timely, or reliable, the acquisition function is at 

risk of inefficient or wasteful business practices. Without adequate contract documentation and 

payment review processes, FDIC cannot reasonably assure that internal controls over contract 

payments are operating effectively, which increases the risks of improper payments and 

misstatements in the financial statements. 

6GAO, Financial Audit: Federal Deposit Insurance Corporation Funds’ 2020 and 2019 Financial Statements, GAO-21-

284R (Washington, D.C.: Feb. 18, 2021). 

7GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: September 

2014). 

8GAO, Framework for Assessing the Acquisition Function at Federal Agencies, GAO-05-218G (Washington, D.C.: 

September 2005). 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 152 
 

 

FINANCIAL SECTION 

While these deficiencies do not individually or collectively constitute a material weakness, 

FDIC’s deficiencies related to contract documentation and payment review processes are 

important enough to merit the attention of those charged with governance of FDIC. Thus, these 

deficiencies continue to represent a significant deficiency in FDIC’s internal control over 

financial reporting as of December 31, 2021. Management commitment and attention will be 

essential to continue addressing these deficiencies and improving FDIC’s controls over contract 

documentation and payment review processes. 

As in the prior year,9 we plan to report additional details concerning the significant deficiency 

separately to FDIC management, along with recommendations for corrective actions. 

Basis for Opinions 

We conducted our audits in accordance with U.S. generally accepted government auditing 

standards. Our responsibilities under those standards are further described in the Auditor’s 

Responsibilities for the Audits of the Financial Statements and Internal Control over Financial 

Reporting section of our report. We are required to be independent of FDIC and to meet our 

other ethical responsibilities, in accordance with the relevant ethical requirements relating to our 

audits. We believe that the audit evidence we have obtained is sufficient and appropriate to 

provide a basis for our audit opinions. 

Responsibilities of Management for the Financial Statements and Internal Control over Financial 

Reporting 

FDIC management is responsible for (1) the preparation and fair presentation of these financial 

statements in accordance with U.S. generally accepted accounting principles; (2) preparing and 

presenting other information included in the annual report, and ensuring the consistency of that 

information with the audited financial statements; (3) designing, implementing, and maintaining 

effective internal control over financial reporting relevant to the preparation and fair presentation 

of financial statements that are free from material misstatement, whether due to fraud or error; 

(4) evaluating the effectiveness of internal control over financial reporting based on the criteria 

established under FMFIA; and (5) its assessment about the effectiveness of internal control over 

financial reporting as of December 31, 2021, included in the accompanying Management’s 

Report on Internal Control over Financial Reporting in appendix I. 

In preparing the financial statements, management is required to evaluate whether there are 

conditions or events, considered in the aggregate, that raise substantial doubt about the DIF’s 

and the FRF’s ability to continue as going concerns for a reasonable period of time. 

Auditor’s Responsibilities for the Audits of the Financial Statements and Internal Control over 

Financial Reporting 

Our objectives are to obtain reasonable assurance about whether the financial statements as a 

whole are free from material misstatement, whether due to fraud or error, and about whether 

effective internal control over financial reporting was maintained in all material respects, and to 

issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of 

assurance but is not absolute assurance and therefore is not a guarantee that an audit of the 

financial statements or an audit of internal control over financial reporting conducted in 

9GAO, Management Report: Improvements Needed in FDIC’s Internal Control over Contract-Payment Review 

Processes, GAO-21-420R (Washington, D.C.: May 13, 2021). 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 153 
FINANCIAL SECTION 

accordance with U.S. generally accepted government auditing standards will always detect a 

material misstatement or a material weakness when it exists. The risk of not detecting a material 

misstatement resulting from fraud is higher than for one resulting from error, as fraud may 

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal 

control. Misstatements, including omissions, are considered to be material if there is a 

substantial likelihood that, individually or in the aggregate, they would influence the judgment 

made by a reasonable user based on the financial statements. 

In performing an audit of financial statements and an audit of internal control over financial 

reporting in accordance with U.S. generally accepted government auditing standards, we: 

• Exercise professional judgment and maintain professional skepticism throughout the audits.

• Identify and assess the risks of material misstatement of the financial statements, whether

due to fraud or error, and design and perform audit procedures responsive to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and

disclosures in the financial statements.

• Obtain an understanding of internal control relevant to our audit of the financial statements

in order to design audit procedures that are appropriate in the circumstances.

• Obtain an understanding of internal control relevant to our audit of internal control over

financial reporting, assess the risks that a material weakness exists, and test and evaluate

the design and operating effectiveness of internal control over financial reporting based on

the assessed risk. Our audit also considered FDIC’s process for evaluating and reporting on

internal control over financial reporting based on criteria established under FMFIA. We did

not evaluate all internal controls relevant to operating objectives as broadly established

under FMFIA, such as those controls relevant to preparing performance information and

ensuring efficient operations. We limited our internal control testing to testing controls over

financial reporting. Our internal control testing was for the purpose of expressing an opinion

on whether effective internal control over financial reporting was maintained, in all material

respects. Consequently, our audit may not identify all deficiencies in internal control over

financial reporting that are less severe than a material weakness.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

significant accounting estimates made by management, as well as evaluate the overall

presentation of the financial statements.

• Perform other procedures we consider necessary in the circumstances.

• Conclude, based on the audit evidence obtained, whether there are conditions or events,

considered in the aggregate, that raise substantial doubt about the DIF’s and the FRF’s

ability to continue as going concerns for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control-related matters that we identified during the financial statement audit. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 154 
FINANCIAL SECTION 

Definition and Inherent Limitations of Internal Control over Financial Reporting 

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, the objectives of which are to provide 

reasonable assurance that (1) transactions are properly recorded, processed, and summarized 

to permit the preparation of financial statements in accordance with U.S. generally accepted 

accounting principles, and assets are safeguarded against loss from unauthorized acquisition, 

use, or disposition, and (2) transactions are executed in accordance with provisions of 

applicable laws, regulations, contracts, and grant agreements, noncompliance with which could 

have a material effect on the financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements due to fraud or error. We also caution that projecting any 

evaluation of effectiveness to future periods is subject to the risk that controls may become 

inadequate because of changes in conditions, or that the degree of compliance with the policies 

or procedures may deteriorate. 

Other Information 

FDIC’s other information contains a wide range of information, some of which is not directly 

related to the financial statements. This information is presented for purposes of additional 

analysis and is not a required part of the financial statements. Management is responsible for 

the other information included in the annual report. The other information comprises the 

information included in the annual report, but does not include the financial statements and our 

auditor’s report thereon. Our opinion on the DIF’s and the FRF’s financial statements does not 

cover the other information, and we do not express an opinion or any form of assurance 

thereon. 

In connection with our audit of the financial statements, our responsibility is to read the other 

information and consider whether a material inconsistency exists between the other information 

and the financial statements, or the other information otherwise appears to be materially 

misstated. If, based on the work performed, we conclude that an uncorrected material 

misstatement of the other information exists, we are required to describe it in our report. 

Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements 

In connection with our audits of the financial statements of the DIF and of the FRF, we tested 

compliance with selected provisions of applicable laws, regulations, contracts, and grant 

agreements consistent with our auditor’s responsibilities discussed below. 

Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant Agreements 

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and 

grant agreements disclosed no instances of noncompliance for 2021 that would be reportable, 

with respect to the DIF and to the FRF, under U.S. generally accepted government auditing 

standards. However, the objective of our tests was not to provide an opinion on compliance with 

applicable laws, regulations, contracts, and grant agreements. Accordingly, we do not express 

such an opinion. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 155 
 

FINANCIAL SECTION 

Basis for Results of Our Tests for Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

We performed our tests of compliance in accordance with U.S. generally accepted government 

auditing standards. Our responsibilities under those standards are further described in the 

Auditor’s Responsibilities for Tests of Compliance section below. 

Responsibilities of Management for Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

FDIC management is responsible for complying with applicable laws, regulations, contracts, and 

grant agreements. 

Auditor’s Responsibilities for Tests of Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

Our responsibility is to test compliance with selected provisions of applicable laws, regulations, 

contracts, and grant agreements that have a direct effect on the determination of material 

amounts and disclosures in the financial statements of the DIF and of the FRF and to perform 

certain other limited procedures. Accordingly, we did not test FDIC’s compliance with all 

applicable laws, regulations, contracts, and grant agreements. We caution that noncompliance 

may occur and not be detected by these tests. 

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant 

Agreements 

The purpose of this report is solely to describe the scope of our testing of compliance with 

selected provisions of applicable laws, regulations, contracts, and grant agreements, and the 

results of that testing, and not to provide an opinion on compliance. This report is an integral 

part of an audit performed in accordance with U.S. generally accepted government auditing 

standards in considering compliance. Accordingly, this report on compliance with laws, 

regulations, contracts, and grant agreements is not suitable for any other purpose. 

Agency Comments 

In commenting on a draft of this report, FDIC stated that it was pleased to receive unmodified 

opinions for the 30th consecutive year on the DIF’s and the FRF’s financial statements. In 

regard to the significant deficiency in internal control over contract documentation and payment 

review processes, FDIC stated that it has taken several measures during 2021 and will continue 

to enhance and maintain effective internal controls to prevent, detect, and mitigate the risks 

associated with contract payment review processes. FDIC added that its commitment to sound 

financial management has been and will remain a top priority. The complete text of FDIC’s 

response is reprinted in appendix II. 

M. Hannah Padilla

Director

Financial Management and Assurance

February 10, 2022 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 156 
FINANCIAL SECTION 

APPENDIX I 

Federal Deposit Insurance Corporation

550 17th Street NW, Washington, D.C. 20429-9990 Office of the Chairman

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL SECTION 

APPENDIX II 

Federal Deposit I nsurance Corporation 

550 17th Street NW, Washington, D.C. 20429-9990 Deputy to the Chairman and CFO 

February 10, 2022 

Ms. M. Hannah Padilla 

Director, Financial Management and Assurance 

U.S. Government Accountability Office 

441 G Street, NW 

Washington, D.C. 20548 

Re: FDIC Management Response to the 2021 and 2020 Financial Statements Audit Report 

Dear Ms. Padilla: 

Thank you for the opportunity to review and comment on the U.S. Government Accountability Office's (GAO's) 

draft report titled, Financial Audit: Federal Deposit Insurance Corporation Funds' 2021 and 2020 Financial 

Statements, GAO-22-104601. We are pleased that the Federal Deposit Insurance Corporation (FDIC) has 

received unmodified opinions for the thirtieth consecutive year on the financial statements of its funds: the 

Deposit Insurance Fund (DIF) and the FSLIC Resolution Fund (FRF). GAO also reported that although internal 

controls can be improved, the FDIC maintained, in all material respects, effective internal control over financial 

reporting, and that there was no reportable noncompliance with provisions of applicable laws, regulations, 

contracts, and grant agreements that were tested. However, GAO did report that more work was needed to 

address FDIC’s significant deficiency in internal control over contract documentation and contract payment 

review processes. 

The FDIC has taken several measures over the 2021 audit year to resolve the issues concerning contract 

documentation and contract payment review processes. These measures included creating a contracting 

governance project team, developing new training, and reinforcing the importance of reviewing invoices prior 

to payment. The FDIC will continue to enhance and maintain effective internal controls to prevent, detect, and 

mitigate the risks associated with contract payment review processes. Our commitment to sound financial 

management has been and will remain a top priority. 

In complying with audit standards that require management to provide a written assessment about the 

effectiveness of its internal control over financial reporting, the FDIC has prepared Management's Report on 

Internal Control over Financial Reporting. The report acknowledges management's responsibility for 

establishing and maintaining internal control over financial reporting and provides the FDIC's conclusion 

regarding the effectiveness of its internal control. 

We want to thank the GAO staff for their professionalism and dedication during the audit and look forward to 

another positive and productive relationship during the 2022 audit. If you have any questions or concerns, 

please do not hesitate to contact me. 

Sincerely, 

BRET EDWARDS Digitally signed by

BRET EDWARDS 

Bret D. Edwards 

Deputy to the Chairman 

and Chief Financial Officer 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
VI. 

RISK MANAGEMENT 

AND INTERNAL 

CONTROLS 
RISK MANAGEMENT AND INTERNAL CONTROLS 

Federal Deposit Insurance Corporation

550 17th Street NW, Washington, D.C. 20429-9990 Office of the Chairman

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 160
RISK MANAGEMENT AND INTERNAL CONTROLS 

The FDIC uses several means to identify and address enterprise risks, maintain comprehensive 

internal controls, ensure the overall effectiveness and efficiency of operations, and otherwise 

comply as necessary with the following federal standards, among others: 

 Chief Financial Officers Act (CFO Act) 

 Federal Managers’ Financial Integrity Act (FMFIA)

 Federal Financial Management Improvement Act (FFMIA)

 Government Performance and Results Act (GPRA)

 Federal Information Security Modernization Act of 2014 (FISMA)

 OMB Circular A-123

 GAO’s Standards for Internal Control in the Federal Government 

As a foundation for these efforts, the Office of Risk Management and Internal Controls 

(ORMIC) oversees a corporate-wide program of risk management and internal control 

activities and works closely with FDIC division and office management. The FDIC has made 

a concerted effort to identify and assess financial, reputational, and operational risks and 

incorporate corresponding controls into day-to-day operations. The program also requires 

that divisions and offices document comprehensive procedures, thoroughly train employees, 

and hold supervisors accountable for performance and results. Divisions and offices monitor 

compliance through periodic management reviews and various activity reports distributed to 

all levels of management. The FDIC also takes seriously FDIC Office of Inspector General and 

GAO audit recommendations and strives to implement agreed upon actions promptly. The 

FDIC has received unmodified opinions on its financial statement audits for 30 consecutive 

years, and these and other positive results reflect the effectiveness of the overall management 

control program. 

In 2021, ORMIC continued to enhance the FDIC’s Enterprise Risk Management (ERM) program. 

The focus was raising awareness of ERM in the FDIC regional offices and initial actions to 

integrate the program with the FDIC’s strategic planning and budget formulation process. 

During 2022, ORMIC will continue to enhance the ERM program, strengthen acquisition-related 

controls, and expand internal control testing efforts. 

Program Evaluation 

ORMIC periodically evaluates selected program areas responsible for achieving FDIC strategic 

objectives and performance goals. During 2021, ORMIC evaluated Division of Depositor 

and Consumer Protection (DCP) processes for achieving a strategic objective and related 

performance goal from the FDIC’s 2021 Annual Performance Plan. The objective and goal 

evaluated and summary results follow. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

RISK MANAGEMENT AND INTERNAL CONTROLS 

Strategic Objective: Consumers have access to accurate and easily understood information 

about their rights and the disclosures due them under consumer protection and fair lending 

laws. 

Performance Goal: Effectively investigate and respond to written consumer complaints and 

inquiries about FDIC-supervised financial institutions. 

Targets: 1) Respond to 95 percent of written consumer complaints and inquiries within 

timeframes established by policy, with all complaints and inquiries receiving at least an initial 

acknowledgement within two weeks; 2) Publish, through the Consumer Response Center 

(CRC), an annual report regarding the nature of the FDIC’s interactions with consumers and 

depositors; and 3) Publish on the FDIC’s public website (https://www.fdic.gov) and regularly 

update performance metrics regarding FDIC’s responsiveness to requests from the public for 

FDIC assistance. 

The objective of ORMIC’s evaluation was to determine if DCP has processes in place to achieve 

the performance goal and confirm that there is documentary support confirming that the 

performance goal was met. ORMIC reviewed the National Center for Consumer and Depositor 

Assistance (NCDA) Consumer Response Unit (CRU) Operations Manual, the Discrimination 

Complaint Investigation Procedures, the CRU Consumer Complaints and Inquires Dashboard, 

the Transparency and Accountability: Consumer Protection and Deposit Annual Report, the 

Public Requests for FDIC Assistance Report, and relevant information on FDIC’s external 

website and DCP’s internal website. DCP provided ORMIC staff a walkthrough of the consumer 

complaints processing system and procedures. Additionally, ORMIC held interview sessions 

with senior officials and examination specialists from DCP’s National Center for Consumer and 

Depositor Assistance Section, and the Internal Control and Review Unit, respectively. ORMIC is 

familiar with the DCP operations from on-going risk management and internal control-related 

collaboration activities. 

The evaluation noted that DCP has systems and processes in place to: 

 Promptly record complaints in the official system of record, 

 Track complaint status and resolution through closure, 

 Monitor stages and response times, 

 Effectuate consistency in handling correspondence with similar issues, 

 Perform quality control reviews, and 

 Report performance metrics and other consumer information. 

ORMIC validated the timeliness of the process by random selection of a complaint entered 

in the system and following it through from inception to completion. ORMIC concluded that 

DCP has an effective process in place to achieve its performance goal and targets; responding 

timely to written consumer complaints and inquiries, and makes consumer complaint 

information publicly available. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Fraud Reduction and Data 

Analytics Act of 2015 

The Fraud Reduction and Data Analytics Act of 2015 was signed into law on June 30, 2016. The 

law is intended to improve: 

 Federal agency financial and administrative controls and procedures to assess

and mitigate fraud risks, and

 Federal agencies’ development and use of data analytics for the purpose of 

identifying, preventing, and responding to fraud, including improper payments.

The FDIC’s enterprise risk management and internal control program considers the potential 

for fraud and incorporates elements of Principle 8—Assess Fraud Risk—from the GAO’s 

Standards for Internal Control in the Federal Government. The FDIC implemented a Fraud Risk 

Assessment Framework as a basis for identifying potential financial fraud risks and schemes 

and ensuring that preventive and detective controls are present and working as intended. 

Examples of transactions more susceptible to fraud include contractor payments, wire 

transfers, travel card purchases, and cash receipts. 

As part of the Framework, management identifies potential fraud areas and implements and 

evaluates key controls as proactive measures to prevent fraud. Although no system of internal 

control provides absolute assurance, the FDIC’s system of internal control provides reasonable 

assurance that key controls are adequate and working as intended. Monitoring activities 

include supervisory approvals, management reporting, and exception reporting. 

FDIC management performs due diligence in areas of suspected or alleged fraud. At the 

conclusion of due diligence, the matter is either closed or referred to the Office of Inspector 

General for investigation. 

During 2021, there was no systemic fraud identified within the FDIC. 

Management Report 

on Final Actions 

As required under the provisions of Section 5 of the Inspector General Act of 1978, amended, 

the FDIC must report information on final action taken by management on certain audit 

reports. The tables on the following pages provide information on final actions taken by 

management on audit reports for the federal fiscal year period October 1, 2020, through 

September 30, 2021. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 1: 

Management Report on Final Action on Audits 

with Disallowed Costs for Fiscal Year 2021 

(There were no audit reports in this category.) 

Table 2: 

Management Report on Final Action on Audits 

with Recommendations to Put Funds to Better Use 

for Fiscal Year 2021 

 

(There were no audit reports in this category.) 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 

Report No. and 

Issue Date OIG Audit Recommendation Management Action Disallowed Costs 

AUD-17-001 OIG recommends that the The OCIO worked with teams $0 

11/2/2016 CIO should review existing 

resource commitments and 

priorities for addressing 

data communications 

(DCOM) plan of actions & 

milestones (POA&Ms) and 

take appropriate steps to 

ensure they are addressed 

in a timely manner. 

to develop risk tolerances 

levels for the FDIC Policy 

19-001, on Management of

POA&Ms, which reflect the 

level of risk associated with 

open POA&Ms, including the

acceptable amount of time

needed to address them.®

Substantial progress has been 

made in closing out several 

aging POA&Ms.® Furthermore,

an Integrated Project Team

has been established to work 

with System Owners to ensure 

timely remediation of POA&Ms

and to conduct root cause

analyses to develop a revised 

process to prevent overdue 

POA&Ms that fall outside of 

tolerance levels. 

Status: Undergoing 

ORMIC Review 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

AUD-20-001 OIG recommends that the The CIOO has established a $0 

10/23/2019 CIO monitor employee and 

contractor compliance 

with policy requirements 

for properly safeguarding 

sensitive electronic and 

hardcopy information. 

plan, in coordination with 

relevant stakeholders, to 

monitor the security of 

hardcopy information in 

common areas via facility 

walkthroughs. This plan 

was implemented in 

phases starting with facility 

walkthroughs of common 

o3ice areas. Using existing 

communications channels, 

the CIO reminded Division 

and O3ice leadership of policy

requirements applicable to

protecting sensitive electronic 

and hardcopy information by

employees and contractors.®

Status: Undergoing 

ORMIC Review 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-001 OIG recommends that the The Division of Information $0 

10/28/2019 Deputy to the Chairman 

and Chief Operating 

O3icer provide enhanced 

contract portfolio reports 

to FDIC executives, senior 

management, and the 

Board Directors. 

Technology (DIT), 

working with Division 

of Administration (DOA) 

Acquisition Services Branch 

(ASB), developed a report: 

Report of Increased/ 

Decreased Award Amounts 

for Contracts and TOs (Task 

Orders) to capture key data 

to enhance the analyses 

and reporting to support 

the contracting program.® 

Additional changes have since 

been made to the data within 

the Report and to its format 

based on feedback received 

by ASB.® FDIC met with the 

OIG sta3 to discuss these 

changes.® DOA is assessing the 

need to add any additional 

information to the Report. 

Due Date:® 6/30/2022 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

AUD-20-003 OIG recommends that the The FDIC Privacy Program $0 

12/18/2019 CIO/CPO (Chief Privacy 

O3icer)develop and 

provide privacy plans for 

all information systems 

containing PII consistent 

with OMB Circular A-130. 

has implemented a Privacy 

Continuous Monitoring 

(PCM) program that ensures 

that Privacy Plans are 

developed and approved 

for all information systems 

containing PII consistent 

with OMB Circular A-130. 

As indicated in the FDIC’s 

IT systems Assessment 

and Authorization Process 

Guide (A&A Guide), the 

identification, selection, 

and periodic assessment of 

privacy controls has been 

fully integrated within FDIC’s 

assessment and authorization 

process, which incorporates 

a risk management 

framework consistent with 

NIST 800-37. It guides and 

informs the categorization 

of Federal information and 

information systems; the 

selection, implementation, 

and assessment of security 

and privacy controls; the 

authorization of information 

systems and common 

controls; and the continuous 

monitoring of information 

systems. 

Status: Undergoing 

ORMIC Review 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

AUD-20-003 OIG recommends that The CIOO has amended $0 

12/18/2019 the CIO/CPO coordinate Privacy Program Directive 

(continued) with the Chief Operating 

O3icer (COO) to update 

policies and procedures 

to reflect the current 

organizational structure of 

the Privacy Program and 

responsibilities of agency 

personnel and component 

o3ices that support the 

FDIC’s Privacy Program.

(1360.20) which, upon 

finalization, will supersede 

this existing directive and 

will also supersede privacy 

program related directives: 

1360.19 (Privacy Impact 

Assessment Requirements), 

1311.1 (Measuring and 

Customizing User Activity on 

FDIC External Websites), and 

1031.1 (Administration of the 

Privacy Act).® 

Status: Undergoing 

ORMIC Review 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
ANNUAL REPORT  9


RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

AUD-20-003 OIG recommends that All employees and contractors $0 

12/18/2019 the CIO/CPO develop and were sent global emails 

(continued) implement controls to 

ensure that PII stored in 

network shared drives and 

in hard copy is regularly 

monitored and reviewed 

for compliance with 

privacy laws, regulations, 

policy and guidelines. 

containing important 

guidance on protecting 

sensitive information. 

Additionally, FDIC has 

implemented the Physical 

Walkthrough Plan. To monitor 

compliance with policy 

requirements for safeguarding 

sensitive electronic 

information, the CIOO has 

developed and implemented 

a Standard Operating 

Procedure (SOP). The SOP 

includes identifying network 

shares with overly broad 

permissions, coordinating 

with the owning division 

or o3ice, and restricting 

permissions appropriately. 

Status: Undergoing 

ORMIC Review 

FEDERAL DEPOSIT INSURANCE CORPORATION 
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-003 OIG recommends that the DIR developed a corporate $0 

2/4/2020 FDIC establish, document, 

and implement policy and 

procedures for conducting 

cost benefit analyses, 

including when and how 

the cost benefit analyses 

will be performed. 

directive to ensure the robust 

and consistent application 

of the principles established 

in the Statement of Policy 

on the Development and 

Review of Regulations and 

Policies approved by the 

FDIC Board of Directors. The 

directive details the process 

for analyzing the potential 

e3ects of regulatory actions 

and outlines specific roles 

and responsibilities for FDIC 

sta3, including when such 

analysis will be performed. 

In addition, DIR developed 

sta3 guidance on analysis of 

FDIC regulations as a resource 

for FDIC sta3 involved in 

agency regulatory actions. 

The guidance outlines general 

concepts and best practices 

for regulatory analysis for 

sta3 use when preparing 

evaluations of the expected 

e3ects, costs and benefits of 

FDIC regulatory actions, and 

discusses how the analysis 

will be performed. 

Due Date:® 3/31/2022 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-003 

2/4/2020 

(continued) 

OIG recommends that the 

FDIC establish, document, 

and implement policy 

and procedures that 

clearly define the roles 

and responsibilities for 

the Regulatory Analysis 

Section (RAS), and early 

involvement for the RAS 

in participating in and 

framing the initial policy 

direction of a rule. 

OIG recommends that 

the FDIC establish, 

document, and implement 

policy and procedures 

that clearly define the 

Chief Economist’s roles 

and responsibilities for 

reviewing and concurring 

on cost benefit analyses 

performed. 

The FDIC has draμed a 

corporate directive and 

procedures for these 

recommendations. The 

directive and guidance are 

currently under final review. 

Due Date:® 3/31/2022 

The FDIC has draμed a 

corporate directive and 

procedures addressing these 

recommendations. The 

directive and guidance are 

currently under final review. 

The cost benefit directive and 

cost benefit analysis guidance 

will be implemented when 

the directive is issued and the 

guidance is finalized. 

Due Date:® 3/31/2022 

$0 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-003 OIG recommends that the The FDIC has draμed a $0 

2/4/2020 FDIC establish, document, corporate directive and 

(continued) and implement policy 

and procedures that 

address how cost benefit 

analyses and supporting 

information, such as 

scope and methodology, 

analyses, conclusions, 

and reconciliation 

to the Agency’s final 

policy decision will be 

documented and published 

in the Federal Register to 

ensure transparency. 

procedures addressing the 

recommendations. The 

directive and guidance are 

currently under final review. 

The cost benefit directive and 

cost benefit analysis guidance 

will be implemented when 

the directive is issued and the 

guidance is finalized. 

Due Date:® 3/31/2022 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 

RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-007 OIG recommends that the RMS has completed $0 

® 9/30/2020 Director, Division of Risk 

Management Supervision 

(RMS) train examiners 

on the importance of 

understanding and 

documenting the 

independence and 

qualifications of internal 

auditor(s), and reviewing 

internal audit work papers 

and results. 

the development of the 

Wheatfield Bank case 

study. This case study is 

based on the Enloe State 

Bank In-Depth Review and 

highlights the importance 

of early identification of risk 

and the subsequent use of 

appropriate supervisory 

responses. Participants 

analyze and discuss how 

unresolved weaknesses could 

a3ect various areas of the 

fictional bank. Participants 

also assess the e3ectiveness 

of regulatory supervision 

and consider other actions 

the FDIC could have taken 

to encourage the Board to 

implement timely corrective 

action. 

Status: Subsequently closed. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 

RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-007 OIG recommends RMS has completed $0 

® 9/30/2020 that the Director, RMS the development of the 

(continued) train examiners on the 

importance of adequate 

annual external financial 

audit coverage, and under 

what circumstances and 

with what justifications 

banks may obtain reviews 

in place of audits. 

Wheatfield Bank case 

study. This case study is 

based on the Enloe State 

Bank In-Depth Review and 

highlights the importance 

of early identification of risk 

and the subsequent use of 

appropriate supervisory 

responses. Participants 

analyze and discuss how 

unresolved weaknesses could 

a3ect various areas of the 

fictional bank. Participants 

also assess the e3ectiveness 

of regulatory supervision 

and consider other actions 

the FDIC could have taken 

to encourage the Board to 

implement timely corrective 

action. 

Status: Subsequently closed. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
 

 

RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-007 OIG recommends that the RMS has completed $0 

® 9/30/2020 Director, RMS enhance the development of the 

(continued) case study training to 

incorporate the lessons 

learned from Enloe 

State Bank in regard to 

performing additional 

procedures related to the 

bank’s loan related activity. 

Wheatfield Bank case 

study. This case study is 

based on the Enloe State 

Bank In-Depth Review and 

highlights the importance 

of early identification of risk 

and the subsequent use of 

appropriate supervisory 

responses. Participants 

analyze and discuss how 

unresolved weaknesses could 

a3ect various areas of the 

fictional bank. Participants 

also assess the e3ectiveness 

of regulatory supervision 

and consider other actions 

the FDIC could have taken 

to encourage the Board to 

implement timely corrective 

action. 

Status: Subsequently closed. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-007 OIG recommends RMS conducted nationwide $0 

® 9/30/2020 that the Director, RMS training for all Commissioned 

(continued) train examiners on the 

importance of ensuring 

that information system 

user access controls be 

adequately tested. 

OIG recommends that 

the Director, RMS train 

examiners to perform 

additional procedures to 

determine the likelihood 

of fraud once a dominant 

o3icial designation is 

made at a bank with a

weak internal control

environment.

Examiners, Case Managers, 

Commissioned Examination 

Specialists, and RMS 

Managers. The comprehensive 

training reinforces the 

principles of the existing 

statutory framework and 

supervisory guidance in its 

case study library as well 

as incorporating additional 

elements of fraud into its case 

study library. 

Status: Subsequently closed. 

RMS conducted nationwide 

training for all Commissioned 

Examiners, Case Managers, 

Commissioned Examination 

Specialists, and RMS 

Managers. The comprehensive 

training reinforces the 

principles of the existing 

statutory framework and 

supervisory guidance in its 

case study library as well 

as incorporating additional 

elements of fraud into its case 

study library. 

Status: Subsequently closed. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
RISK MANAGEMENT AND INTERNAL CONTROLS 

Table 3: 

Audit Reports Without Final Actions but with Management 

Decisions over One Year Old for Fiscal Year 2021 (continued) 

Report No. and 

Issue Date 

OIG Audit Recommendation Management Action 

Disallowed 

Costs 

EVAL-20-007 OIG recommends that RMS conducted nationwide $0 

® 9/30/2020 the Director, RMS train training for all Commissioned 

(continued) examiners on indicators of 

fraud and how individual 

issues identified during 

an examination should be 

considered holistically to 

facilitate fraud detection. 

Examiners, Case Managers, 

Commissioned Examination 

Specialists, and RMS 

Managers. The comprehensive 

training reinforces the 

principles of the existing 

statutory framework and 

supervisory guidance in its 

case study library as well 

as incorporating additional 

elements of fraud into its case 

study library. 

Status: Subsequently closed. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
PAGE INTENTIONALLY LEFT BLANK
VII. 

APPENDICES 
PAGE INTENTIONALLY LEFT BLANK
 

APPENDICES 

A. Key Statistics

FDIC Actions on Financial Institutions Applications 

2021 2020 2019 

Deposit Insurance 15 18 15 

Approved1 15 18 15 

Denied 0 0 0 

New Branches 493 430 548 

Approved 493 430 548 

Denied 0 0 0 

Mergers 187 159 243 

Approved 187 159 243 

Denied 0 0 0 

Requests for Consent to Serve2 47 79 87 

Approved 47 78 87 

Section 19 5 11 5 

Section 32 42 67 82 

Denied 0 1 0 

Section 19 0 0 0 

Section 32 0 1 0 

Notices of Change in Control 34 17 12 

Letters of Intent Not to Disapprove 34 17 12 

Disapproved 0 0 0 

Brokered Deposit Waivers 1 4 3 

Approved 1 4 3 

Denied 0 0 0 

Savings Association Activities3 0 0 2 

Approved 0 0 2 

Denied 0 0 0 

State Bank Activities/Investments4 25 31 20 

Approved 25 31 20 

Denied 0 0 0 

Conversion of Mutual Institutions 4 2 4 

Non-Objection 4 2 4 

Objection 0 0 0 

1

 Includes deposit insurance applications filed on behalf of (1) newly organized institutions, (2) existing uninsured financial 

services companies seeking establishment as an insured institution, and (3) interim institutions established to facilitate merger 

or conversion transactions, and applications to facilitate the establishment of thriμ holding companies. 

2

 Under Section 19 of the Federal Deposit Insurance (FDI) Act, an insured institution must receive FDIC approval before employing 

a person convicted of dishonesty or breach of trust. Under Section 32, the FDIC must approve any change of directors or senior 

executive o3icers at a state nonmember bank that is not in compliance with capital requirements or is otherwise in troubled 

condition. 

3

 Section 28 of the FDI Act, in general, prohibits a federally-insured state savings association from engaging in an activity not 

permissible for a federal savings association and requires notices or applications to be filed with the FDIC. 

4

 Section 24 of the FDI Act, in general, prohibits a federally-insured state bank from engaging in an activity not permissible for a 

national bank and requires notices or applications to be filed with the FDIC. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

APPENDICES 

Combined Risk and Consumer Enforcement Actions 

2021 2020 2019 

Total Number of Actions Initiated by the FDIC 99 169 183 

Termination of Insurance 7 10 17 

Involuntary Termination 0 0 0 

Sec. 8a For Violations, Unsafe/Unsound Practices or Conditions 0 0 0 

Voluntary Termination 7 10 17 

Sec. 8a By Order Upon Request 0 0 0 

Sec. 8p No Deposits 6 8 12 

Sec. 8q Deposits Assumed 1 2 5 

Sec. 8b Consent and Cease-and-Desist Actions 10 23 24 

Notices of Charges Issued 1 1 1 

Orders to Pay Restitution 0 0 0 

Consent and Cease and Desist Orders 8 20 18 

Personal Cease and Desist Orders 1 2 5 

Sec. 8e Removal/Prohibition of Director or O ̈icer 25 37 34 

Notices of Intention to Remove/Prohibit 4 4 1 

Consent Orders 21 33 33 

Sec. 8g Suspension/Removal When Charged With Crime 0 0 0 

Civil Money Penalties Actions 30 21 29 

Sec. 7a Call Report Penalty Orders 0 0 0 

Sec. 8i Flood Act and Civil Money Penalty Orders 26 16 27 

Sec. 8i Civil Money Penalty Notices of Assessment 4 5 2 

Sec. 10c Orders of Investigation 2 4 11 

Sec. 19 Waiver Orders 24 74 64 

Approved Section 19 Waiver Orders 24 74 64 

Denied Section 19 Waiver Orders 0 0 0 

Sec. 32 Notices Disapproving O ̈icer/Director’s Request for Review 0 0 0 

Truth-in-Lending Act Reimbursement Actions 44 41 58 

Denials of Requests for Relief 0 0 0 

Grants of Relief 0 0 0 

Banks Making Reimbursemento 44 41 58 

Suspicious Activity Reports (Open and closed institutions) 360,121 299,887 225,270 

Other Actions Not Listed« 1 0 4 

1

 These actions do not constitute the initiation of a formal enforcement action and, therefore, are not included in the total number 

of actions initiated. 2

 The Other Actions Not Listed were, in 2021: 1 Supervisory Prompt Corrective Action Directive; in 2020: 0; in 2019: 3 Supervisory 

Prompt Corrective Action Directives and 1 Other Formal Action. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

APPENDICES 

Estimated Insured Deposits and the Deposit Insurance Fund, 

December 31, 1934, through September 30, 20211 

Dollars in Millions (except Insurance Coverage) 

Deposits in Insured 

Institutions2 

Insurance Fund as 

a Percentage of 

Year 

Insurance 

Coverage2 

Total 

Domestic 

Deposits 

Est. Insured 

Deposits 

Percentage 

of Domestic 

Deposits 

Deposit 

Insurance 

Fund 

Total 

Domestic 

Deposits 

Est. Insured 

Deposits 

2021 $250,000 $17,676,713 $9,577,101 54.2 $121,934.6 0.69 1.27 

2020 250,000 16,339,032 9,123,046 55.8 117,896.8 0.72 1.29 

2019 250,000 13,262,843 7,828,160 59.0 110,346.9 0.83 1.41 

2018 250,000 12,659,406 7,525,204 59.4 102,608.9 0.81 1.36 

2017 250,000 12,129,503 7,154,379 59.0 92,747.5 0.76 1.30 

2016 250,000 11,693,371 6,915,663 59.1 83,161.5 0.71 1.20 

2015 250,000 10,952,922 6,518,675 59.5 72,600.2 0.66 1.11 

2014 250,000 10,410,687 6,195,554 59.5 62,780.2 0.60 1.01 

2013 250,000 9,825,479 5,998,238 61.0 47,190.8 0.48 0.79 

2012 250,000 9,474,720 7,402,053 78.1 32,957.8 0.35 0.45 

2011 250,000 8,782,291 6,973,483 79.4 11,826.5 0.13 0.17 

2010 250,000 7,887,858 6,301,542 79.9 (7,352.2) (0.09) (0.12) 

2009 250,000 7,705,354 5,407,773 70.2 (20,861.8) (0.27) (0.39) 

2008 100,000 7,505,408 4,750,783 63.3 17,276.3 0.23 0.36 

2007 100,000 6,921,678 4,292,211 62.0 52,413.0 0.76 1.22 

2006 100,000 6,640,097 4,153,808 62.6 50,165.3 0.76 1.21 

2005 100,000 6,229,753 3,890,930 62.5 48,596.6 0.78 1.25 

2004 100,000 5,724,621 3,622,059 63.3 47,506.8 0.83 1.31 

2003 100,000 5,223,922 3,452,497 66.1 46,022.3 0.88 1.33 

2002 100,000 4,916,078 3,383,598 68.8 43,797.0 0.89 1.29 

2001 100,000 4,564,064 3,215,581 70.5 41,373.8 0.91 1.29 

2000 100,000 4,211,895 3,055,108 72.5 41,733.8 0.99 1.37 

1999 100,000 3,885,826 2,869,208 73.8 39,694.9 1.02 1.38 

1998 100,000 3,817,150 2,850,452 74.7 39,452.1 1.03 1.38 

1997 100,000 3,602,189 2,746,477 76.2 37,660.8 1.05 1.37 

1996 100,000 3,454,556 2,690,439 77.9 35,742.8 1.03 1.33 

1995 100,000 3,318,595 2,663,873 80.3 28,811.5 0.87 1.08 

1994 100,000 3,184,410 2,588,619 81.3 23,784.5 0.75 0.92 

1993 100,000 3,220,302 2,602,781 80.8 14,277.3 0.44 0.55 

1992 100,000 3,275,530 2,677,709 81.7 178.4 0.01 0.01 

1991 100,000 3,331,312 2,733,387 82.1 (6,934.0) (0.21) (0.25) 

1990 100,000 3,415,464 2,784,838 81.5 4,062.7 0.12 0.15 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

APPENDICES 

Estimated Insured Deposits and the Deposit Insurance Fund, 

December 31, 1934, through September 30, 20211 (continued) 

Dollars in Millions (except Insurance Coverage) 

Deposits in Insured 

Institutions2 

Insurance Fund as 

a Percentage of 

Year 

Insurance 

Coverage2 

Total Domestic 

Deposits 

Est. Insured 

Deposits 

Percentage 

of Domestic 

Deposits 

Deposit 

Insurance 

Fund 

Total 

Domestic 

Deposits 

Est. Insured 

Deposits 

1989 100,000 3,412,503 2,755,471 80.7 13,209.5 0.39 0.48 

1988 100,000 2,337,080 1,756,771 75.2 14,061.1 0.60 0.80 

1987 100,000 2,198,648 1,657,291 75.4 18,301.8 0.83 1.10 

1986 100,000 2,162,687 1,636,915 75.7 18,253.3 0.84 1.12 

1985 100,000 1,975,030 1,510,496 76.5 17,956.9 0.91 1.19 

1984 100,000 1,805,334 1,393,421 77.2 16,529.4 0.92 1.19 

1983 100,000 1,690,576 1,268,332 75.0 15,429.1 0.91 1.22 

1982 100,000 1,544,697 1,134,221 73.4 13,770.9 0.89 1.21 

1981 100,000 1,409,322 988,898 70.2 12,246.1 0.87 1.24 

1980 100,000 1,324,463 948,717 71.6 11,019.5 0.83 1.16 

1979 40,000 1,226,943 808,555 65.9 9,792.7 0.80 1.21 

1978 40,000 1,145,835 760,706 66.4 8,796.0 0.77 1.16 

1977 40,000 1,050,435 692,533 65.9 7,992.8 0.76 1.15 

1976 40,000 941,923 628,263 66.7 7,268.8 0.77 1.16 

1975 40,000 875,985 569,101 65.0 6,716.0 0.77 1.18 

1974 40,000 833,277 520,309 62.4 6,124.2 0.73 1.18 

1973 20,000 766,509 465,600 60.7 5,615.3 0.73 1.21 

1972 20,000 697,480 419,756 60.2 5,158.7 0.74 1.23 

1971 20,000 610,685 374,568 61.3 4,739.9 0.78 1.27 

1970 20,000 545,198 349,581 64.1 4,379.6 0.80 1.25 

1969 20,000 495,858 313,085 63.1 4,051.1 0.82 1.29 

1968 15,000 491,513 296,701 60.4 3,749.2 0.76 1.26 

1967 15,000 448,709 261,149 58.2 3,485.5 0.78 1.33 

1966 15,000 401,096 234,150 58.4 3,252.0 0.81 1.39 

1965 10,000 377,400 209,690 55.6 3,036.3 0.80 1.45 

1964 10,000 348,981 191,787 55.0 2,844.7 0.82 1.48 

1963 10,000 313,304 177,381 56.6 2,667.9 0.85 1.50 

1962 10,000 297,548 170,210 57.2 2,502.0 0.84 1.47 

1961 10,000 281,304 160,309 57.0 2,353.8 0.84 1.47 

1960 10,000 260,495 149,684 57.5 2,222.2 0.85 1.48 

1959 10,000 247,589 142,131 57.4 2,089.8 0.84 1.47 

1958 10,000 242,445 137,698 56.8 1,965.4 0.81 1.43 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
 

APPENDICES 

Estimated Insured Deposits and the Deposit Insurance Fund, 

December 31, 1934, through September 30, 20211 (continued) 

Dollars in Millions (except Insurance Coverage) 

Deposits in Insured 

Institutions2 

Insurance Fund as 

a Percentage of 

Year 

Insurance 

Coverage2 

Total Domestic 

Deposits 

Est. Insured 

Deposits 

Percentage 

of Domestic 

Deposits 

Deposit 

Insurance 

Fund 

Total 

Domestic 

Deposits 

Est. Insured 

Deposits 

1957 10,000 225,507 127,055 56.3 1,850.5 0.82 1.46 

1956 10,000 219,393 121,008 55.2 1,742.1 0.79 1.44 

1955 10,000 212,226 116,380 54.8 1,639.6 0.77 1.41 

1954 10,000 203,195 110,973 54.6 1,542.7 0.76 1.39 

1953 10,000 193,466 105,610 54.6 1,450.7 0.75 1.37 

1952 10,000 188,142 101,841 54.1 1,363.5 0.72 1.34 

1951 10,000 178,540 96,713 54.2 1,282.2 0.72 1.33 

1950 10,000 167,818 91,359 54.4 1,243.9 0.74 1.36 

1949 5,000 156,786 76,589 48.8 1,203.9 0.77 1.57 

1948 5,000 153,454 75,320 49.1 1,065.9 0.69 1.42 

1947 5,000 154,096 76,254 49.5 1,006.1 0.65 1.32 

1946 5,000 148,458 73,759 49.7 1,058.5 0.71 1.44 

1945 5,000 157,174 67,021 42.6 929.2 0.59 1.39 

1944 5,000 134,662 56,398 41.9 804.3 0.60 1.43 

1943 5,000 111,650 48,440 43.4 703.1 0.63 1.45 

1942 5,000 89,869 32,837 36.5 616.9 0.69 1.88 

1941 5,000 71,209 28,249 39.7 553.5 0.78 1.96 

1940 5,000 65,288 26,638 40.8 496.0 0.76 1.86 

1939 5,000 57,485 24,650 42.9 452.7 0.79 1.84 

1938 5,000 50,791 23,121 45.5 420.5 0.83 1.82 

1937 5,000 48,228 22,557 46.8 383.1 0.79 1.70 

1936 5,000 50,281 22,330 44.4 343.4 0.68 1.54 

1935 5,000 45,125 20,158 44.7 306.0 0.68 1.52 

1934 5,000 40,060 18,075 45.1 291.7 0.73 1.61 

1 For 2021, figures are as of September 30; all other prior years are as of December 31. Prior to 1989, figures are for the Bank Insurance Fund (BIF) only 

and exclude insured branches of foreign banks. For 1989 to 2005, figures represent the sum of the BIF and Savings Association Insurance Fund (SAIF) 

amounts; for 2006 to 2021, figures are for DIF. Amounts for 1989-2021 include insured branches of foreign banks. Prior to year-end 1991, insured 

deposits were estimated using percentages determined from June Call and Thriμ Financial Reports. 

2

 The year-end 2008 coverage limit and estimated insured deposits do not reflect the temporary increase to $250,000 then in e3ect under the 

Emergency Economic Stabilization Act of 2008. The Dodd-Frank Wall Street Reform and Consumer Protection (Dodd-Frank) Act made this coverage 

limit permanent. The year-end 2009 coverage limit and estimated insured deposits reflect the $250,000 coverage limit. The Dodd-Frank Act also 

temporarily provided unlimited coverage for non-interest bearing transaction accounts for two years beginning December 31, 2010. Coverage for 

certain retirement accounts increased to $250,000 in 2006. Initial coverage limit was $2,500 from January 1 to June 30, 1934. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 ̈

APPENDICES 

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, 

September 11, 1933, through December 31, 2021 

Dollars in Millions 

Income Expenses and Losses 

Year Total 

Assessment 

Income 

Assessment 

Credits 

Investment 

and Other 

Effective 

Assessment 

Rate1 Total 

Provision 

for 

Ins. Losses 

Admin. 

and 

Operating 

Expenses2 

Interest 

& Other Ins. 

Expenses 

Funding 

Transfer 

from the 

FSLIC 

Resolution 

Fund 

Net Income/ 

(Loss) 

TOTAL $277,509.1 $204,998.5 $12,157.2 $84,667.8 $154,421.7 $106,142.1 $38,798.5 $9,481.2 $139.5 $123,226.9 

2021 8,153.4 7,080.2 0.0 1,073.2 0.0358% 1,705.3 (143.7) 1,842.7 6.3 0.0 6,448.1 

2020 8,796.5 7,153.9 60.7 $1,703.3 0.0395% 1,691.9 (157.3) 1,846.5 2.7 0.0 7,104.6 

2019 7,095.3 5,642.7 703.6 2,156.2 0.0312% 513.2 (1,285.5) 1,795.6 3.1 0.0 6,582.1 

2018 11,170.8 9,526.7 0.0 1,644.1 0.0626% 1,205.2 (562.6) 1,764.7 3.1 0.0 9,965.6 

2017 11,663.7 10,594.8 0.0 1,068.9 0.0716% 1,558.2 (183.1) 1,739.4 2.0 0.0 10,105.5 

2016 10,674.1 9,986.6 0.0 687.5 0.0699% 150.6 (1,567.9) 1,715.0 3.5 0.0 10,523.5 

2015 9,303.5 8,846.8 0.0 456.7 0.0647% (553.2) (2,251.3) 1,687.2 10.9 0.0 9,856.7 

2014 8,965.1 8,656.1 0.0 309.0 0.0663% (6,634.7) (8,305.5) 1,664.3 6.5 0.0 15,599.8 

2013 10,458.9 9,734.2 0.0 724.7 0.0775% (4,045.9) (5,659.4) 1,608.7 4.8 0.0 14,504.8 

2012 18,522.3 12,397.2 0.2 6,125.3 0.1012% (2,599.0) (4,222.6) 1,777.5 (153.9) 0.0 21,121.3 

2011 16,342.0 13,499.5 0.9 2,843.4 0.1115% (2,915.4) (4,413.6) 1,625.4 (127.2) 0.0 19,257.4 

2010 13,379.9 13,611.2 0.8 (230.5) 0.1772% 75.0 (847.8) 1,592.6 (669.8) 0.0 13,304.9 

2009 24,706.4 17,865.4 148.0 6,989.0 0.2330% 60,709.0 57,711.8 1,271.1 1,726.1 0.0 (36,002.6) 

2008 7,306.3 4,410.4 1,445.9 4,341.8 0.0418% 44,339.5 41,838.8 1,033.5 1,467.2 0.0 (37,033.2) 

2007 3,196.2 3,730.9 3,088.0 2,553.3 0.0093% 1,090.9 95.0 992.6 3.3 0.0 2,105.3 

2006 2,643.5 31.9 0.0 2,611.6 0.0005% 904.3 (52.1) 950.6 5.8 0.0 1,739.2 

2005 2,420.5 60.9 0.0 2,359.6 0.0010% 809.3 (160.2) 965.7 3.8 0.0 1,611.2 

2004 2,240.3 104.2 0.0 2,136.1 0.0019% 607.6 (353.4) 941.3 19.7 0.0 1,632.7 

2003 2,173.6 94.8 0.0 2,078.8 0.0019% (67.7) (1,010.5) 935.5 7.3 0.0 2,241.3 

2002 2,384.7 107.8 0.0 2,276.9 0.0023% 719.6 (243.0) 945.1 17.5 0.0 1,665.1 

2001 2,730.1 83.2 0.0 2,646.9 0.0019% 3,123.4 2,199.3 887.9 36.2 0.0 (393.3) 

2000 2,570.1 64.3 0.0 2,505.8 0.0016% 945.2 28.0 883.9 33.3 0.0 1,624.9 

1999 2,416.7 48.4 0.0 2,368.3 0.0013% 2,047.0 1,199.7 823.4 23.9 0.0 369.7 

1998 2,584.6 37.0 0.0 2,547.6 0.0010% 817.5 (5.7) 782.6 40.6 0.0 1,767.1 

1997 2,165.5 38.6 0.0 2,126.9 0.0011% 247.3 (505.7) 677.2 75.8 0.0 1,918.2 

1996 7,156.8 5,294.2 0.0 1,862.6 0.1622% 353.6 (417.2) 568.3 202.5 0.0 6,803.2 

1995 5,229.2 3,877.0 0.0 1,352.2 0.1238% 202.2 (354.2) 510.6 45.8 0.0 5,027.0 

1994 7,682.1 6,722.7 0.0 959.4 0.2192% (1,825.1) (2,459.4) 443.2 191.1 0.0 9,507.2 

1993 7,354.5 6,682.0 0.0 672.5 0.2157% (6,744.4) (7,660.4) 418.5 497.5 0.0 14,098.9 

1992 6,479.3 5,758.6 0.0 720.7 0.1815% (596.8) (2,274.7) 614.83 1,063.1 35.4 7,111.5 

1991 5,886.5 5,254.0 0.0 632.5 0.1613% 16,925.3 15,496.2 326.1 1,103.0 42.4 (10,996.4) 

1990 3,855.3 2,872.3 0.0 983.0 0.0868% 13,059.3 12,133.1 275.6 650.6 56.1 (9,147.9) 

1989 3,494.8 1,885.0 0.0 1,609.8 0.0816% 4,352.2 3,811.3 219.9 321.0 5.6 (851.8) 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 ̈

APPENDICES 

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, 

September 11, 1933, through December 31, 2021 (continued) 

Dollars in Millions 

Income Expenses and Losses 

Year Total 

Assessment 

Income 

Assessment 

Credits 

Investment 

and Other 

Effective 

Assessment 

Rate1 Total 

Provision 

for 

Ins. Losses 

Admin. 

and 

Operating 

Expenses2 

Interest 

& Other Ins. 

Expenses 

Funding 

Transfer 

from the

 FSLIC 

Resolution 

Fund 

Net Income/ 

(Loss) 

1988 3,347.7 1,773.0 0.0 1,574.7 0.0825% 7,588.4 6,298.3 223.9 1,066.2 0.0 (4,240.7) 

1987 3,319.4 1,696.0 0.0 1,623.4 0.0833% 3,270.9 2,996.9 204.9 69.1 0.0 48.5 

1986 3,260.1 1,516.9 0.0 1,743.2 0.0787% 2,963.7 2,827.7 180.3 (44.3) 0.0 296.4 

1985 3,385.5 1,433.5 0.0 1,952.0 0.0815% 1,957.9 1,569.0 179.2 209.7 0.0 1,427.6 

1984 3,099.5 1,321.5 0.0 1,778.0 0.0800% 1,999.2 1,633.4 151.2 214.6 0.0 1,100.3 

1983 2,628.1 1,214.9 164.0 1,577.2 0.0714% 969.9 675.1 135.7 159.1 0.0 1,658.2 

1982 2,524.6 1,108.9 96.2 1,511.9 0.0769% 999.8 126.4 129.9 743.5 0.0 1,524.8 

1981 2,074.7 1,039.0 117.1 1,152.8 0.0714% 848.1 320.4 127.2 400.5 0.0 1,226.6 

1980 1,310.4 951.9 521.1 879.6 0.0370% 83.6 (38.1) 118.2 3.5 0.0 1,226.8 

1979 1,090.4 881.0 524.6 734.0 0.0333% 93.7 (17.2) 106.8 4.1 0.0 996.7 

1978 952.1 810.1 443.1 585.1 0.0385% 148.9 36.5 103.3 9.1 0.0 803.2 

1977 837.8 731.3 411.9 518.4 0.0370% 113.6 20.8 89.3 3.5 0.0 724.2 

1976 764.9 676.1 379.6 468.4 0.0370% 212.3 28.0 180.44 3.9 0.0 552.6 

1975 689.3 641.3 362.4 410.4 0.0357% 97.5 27.6 67.7 2.2 0.0 591.8 

1974 668.1 587.4 285.4 366.1 0.0435% 159.2 97.9 59.2 2.1 0.0 508.9 

1973 561.0 529.4 283.4 315.0 0.0385% 108.2 52.5 54.4 1.3 0.0 452.8 

1972 467.0 468.8 280.3 278.5 0.0333% 65.7 10.1 49.6 6.05 0.0 401.3 

1971 415.3 417.2 241.4 239.5 0.0345% 60.3 13.4 46.9 0.0 0.0 355.0 

1970 382.7 369.3 210.0 223.4 0.0357% 46.0 3.8 42.2 0.0 0.0 336.7 

1969 335.8 364.2 220.2 191.8 0.0333% 34.5 1.0 33.5 0.0 0.0 301.3 

1968 295.0 334.5 202.1 162.6 0.0333% 29.1 0.1 29.0 0.0 0.0 265.9 

1967 263.0 303.1 182.4 142.3 0.0333% 27.3 2.9 24.4 0.0 0.0 235.7 

1966 241.0 284.3 172.6 129.3 0.0323% 19.9 0.1 19.8 0.0 0.0 221.1 

1965 214.6 260.5 158.3 112.4 0.0323% 22.9 5.2 17.7 0.0 0.0 191.7 

1964 197.1 238.2 145.2 104.1 0.0323% 18.4 2.9 15.5 0.0 0.0 178.7 

1963 181.9 220.6 136.4 97.7 0.0313% 15.1 0.7 14.4 0.0 0.0 166.8 

1962 161.1 203.4 126.9 84.6 0.0313% 13.8 0.1 13.7 0.0 0.0 147.3 

1961 147.3 188.9 115.5 73.9 0.0323% 14.8 1.6 13.2 0.0 0.0 132.5 

1960 144.6 180.4 100.8 65.0 0.0370% 12.5 0.1 12.4 0.0 0.0 132.1 

1959 136.5 178.2 99.6 57.9 0.0370% 12.1 0.2 11.9 0.0 0.0 124.4 

1958 126.8 166.8 93.0 53.0 0.0370% 11.6 0.0 11.6 0.0 0.0 115.2 

1957 117.3 159.3 90.2 48.2 0.0357% 9.7 0.1 9.6 0.0 0.0 107.6 

1956 111.9 155.5 87.3 43.7 0.0370% 9.4 0.3 9.1 0.0 0.0 102.5 

1955 105.8 151.5 85.4 39.7 0.0370% 9.0 0.3 8.7 0.0 0.0 96.8 

1954 99.7 144.2 81.8 37.3 0.0357% 7.8 0.1 7.7 0.0 0.0 91.9 

1953 94.2 138.7 78.5 34.0 0.0357% 7.3 0.1 7.2 0.0 0.0 86.9 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 ̈

APPENDICES 

Income and Expenses, Deposit Insurance Fund, from Beginning of Operations, 

September 11, 1933, through December 31, 2021 (continued) 

Dollars in Millions 

Income Expenses and Losses 

Year Total 

Assessment 

Income 

Assessment 

Credits 

Investment 

and Other 

Effective 

Assessment 

Rate1 Total 

Provision 

for 

Ins. Losses 

Admin. 

and 

Operating 

Expenses2 

Interest 

& Other Ins. 

Expenses 

Funding 

Transfer 

from the

 FSLIC 

Resolution 

Fund 

Net Income/ 

(Loss) 

1952 88.6 131.0 73.7 31.3 0.0370% 7.8 0.8 7.0 0.0 0.0 80.8 

1951 83.5 124.3 70.0 29.2 0.0370% 6.6 0.0 6.6 0.0 0.0 76.9 

1950 84.8 122.9 68.7 30.6 0.0370% 7.8 1.4 6.4 0.0 0.0 77.0 

1949 151.1 122.7 0.0 28.4 0.0833% 6.4 0.3 6.1 0.0 0.0 144.7 

1948 145.6 119.3 0.0 26.3 0.0833% 7.0 0.7 6.36 0.0 0.0 138.6 

1947 157.5 114.4 0.0 43.1 0.0833% 9.9 0.1 9.8 0.0 0.0 147.6 

1946 130.7 107.0 0.0 23.7 0.0833% 10.0 0.1 9.9 0.0 0.0 120.7 

1945 121.0 93.7 0.0 27.3 0.0833% 9.4 0.1 9.3 0.0 0.0 111.6 

1944 99.3 80.9 0.0 18.4 0.0833% 9.3 0.1 9.2 0.0 0.0 90.0 

1943 86.6 70.0 0.0 16.6 0.0833% 9.8 0.2 9.6 0.0 0.0 76.8 

1942 69.1 56.5 0.0 12.6 0.0833% 10.1 0.5 9.6 0.0 0.0 59.0 

1941 62.0 51.4 0.0 10.6 0.0833% 10.1 0.6 9.5 0.0 0.0 51.9 

1940 55.9 46.2 0.0 9.7 0.0833% 12.9 3.5 9.4 0.0 0.0 43.0 

1939 51.2 40.7 0.0 10.5 0.0833% 16.4 7.2 9.2 0.0 0.0 34.8 

1938 47.7 38.3 0.0 9.4 0.0833% 11.3 2.5 8.8 0.0 0.0 36.4 

1937 48.2 38.8 0.0 9.4 0.0833% 12.2 3.7 8.5 0.0 0.0 36.0 

1936 43.8 35.6 0.0 8.2 0.0833% 10.9 2.6 8.3 0.0 0.0 32.9 

1935 20.8 11.5 0.0 9.3 0.0833% 11.3 2.8 8.5 0.0 0.0 9.5 

1933-

34 

7.0 0.0 0.0 7.0 N/A 10.0 0.2 9.8 0.0 0.0 (3.0) 

1 The e3ective assessment rate is calculated from annual assessment income (net of assessment credits), excluding transfers to the Financing Corporation (FICO), 

Resolution Funding Corporation (REFCORP) and FSLIC Resolution Fund, divided by the average assessment base. Figures represent only BIF-insured institutions 

prior to 1990, and BIF- and SAIF-insured institutions from 1990 through 2005. Aμer 1995, all thriμ closings became the responsibility of the FDIC and amounts are 

reflected in the SAIF. Beginning in 2006, figures are for the DIF. 

The annualized assessment rate for 2021 is based on full year assessment income divided by a four quarter average of 2021 quarterly assessment base amounts. 

The assessment base for fourth quarter 2021 was estimated using the third quarter 2021 assessment base and an assumed quarterly growth rate of one percent. 

Historical Assessment Rates: 

1934 – 1949 The statutory assessment rate was 0.0833 percent. 

1950 – 1984 The e3ective assessment rates varied from the statutory rate of 0.0833 percent due to assessment credits provided in those years. 

1985 – 1989 The statutory assessment rate was 0.0833 percent (no credits were given). 

1990 The statutory rate increased to 0.12 percent. 

1991 – 1992 The statutory rate increased to a minimum of 0.15 percent. The e3ective rates in 1991 and 1992 varied because the FDIC exercised new authority 

to increase assessments above the statutory minimum rate when needed. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 ANNUAL REPORT  
9

APPENDICES 

1993 – 2006 Beginning in 1993, the e3ective rate was based on a risk-related premium system under which institutions paid assessments in the range of 0.23 

percent to 0.31 percent. In May 1995, the BIF reached the mandatory recapitalization level of 1.25 percent. As a result, BIF assessment rates were 

reduced to a range of 0.04 percent to 0.31 percent of assessable deposits, e3ective June 1995, and assessments totaling $1.5 billion were refunded 

in September 1995. Assessment rates for the BIF were lowered again to a range of 0 to 0.27 percent of assessable deposits, e3ective the start of 

1996. In 1996, the SAIF collected a one-time special assessment of $4.5 billion. Subsequently, assessment rates for the SAIF were lowered to the 

same range as the BIF, e3ective October 1996. This range of rates remained unchanged for both funds through 2006. 

2007 – 2008 As part of the implementation of the Federal Deposit Insurance Reform Act of 2005, assessment rates were increased to a range of 0.05 percent to 

0.43 percent of assessable deposits e3ective at the start of 2007, but many institutions received a one-time assessment credit ($4.7 billion in total) 

to o3set the new assessments. 

2009 – 2011 For the first quarter of 2009, assessment rates were increased to a range of 0.12 percent to 0.50 percent of assessable deposits. On June 30, 

2009, a special assessment was imposed on all insured banks and thriμs, which amounted in aggregate to approximately $5.4 billion. For 8,106 

institutions, with $9.3 trillion in assets, the special assessment was 5 basis points of each insured institution’s assets minus tier one capital; 89 

other institutions, with assets of $4.0 trillion, had their special assessment capped at 10 basis points of their second quarter assessment base. 

From the second quarter of 2009 through the first quarter of 2011, initial assessment rates ranged between 0.12 percent and 0.45 percent of 

assessable deposits. Initial rates were subject to further adjustments. 

2011 – 2016 Beginning in the second quarter of 2011, the assessment base changed to average total consolidated assets less average tangible equity (with 

certain adjustments for banker’s banks and custodial banks), as required by the Dodd-Frank Act. The FDIC implemented a new assessment rate 

schedule at the same time to conform to the larger assessment base. Initial assessment rates were lowered to a range of 0.05 percent to 0.35 

percent of the new base. The annualized assessment rates averaged approximately 17.6 cents per $100 of assessable deposits for the first quarter 

of 2011 and 11.1 cents per $100 of the new base for the last three quarters of 2011 (which is shown in the table). 

2016 Beginning July 1, 2016, initial assessment rates were lowered from a range of 5 basis points to 35 basis points to a range of 3 basis points to 30 

basis points, and an additional surcharge was imposed on large banks (generally institutions with $10 billion or more in assets) of 4.5 basis points 

of their assessment base (aμer making adjustments). 

2018 The 4.5 basis point surcharge imposed on large banks ended e3ective October 1, 2018. The annualized assessment rates averaged approximately 

7.2 cents per $100 of the assessable base for the first three quarters of 2018 and 3.5 cents per $100 of the assessment base for the last quarter of 

2018. The full year annualized assessment rate averaged 6.3 cents per $100 (which is shown in the table). 

2019 Assessment income for 2019 included small bank credits of $703.6 million. 

2020 Assessment income for 2020 included small bank credits of $60.7 million. 

2 These expenses, which are presented as operating expenses in the Statement of Income and Fund Balance, pertain to the FDIC in its corporate capacity only 

and do not include costs that are charged to the failed bank receiverships that are managed by the FDIC. The receivership expenses are presented as part of the 

“Receivables from Resolutions, net” line on the Balance Sheet. The narrative and graph presented on page 123 of this report shows the aggregate (corporate and 

receivership) expenditures of the FDIC. 

3 Includes $210 million for the cumulative e3ect of an accounting change for certain postretirement benefits (1992). 

4 Includes a $106 million net loss on government securities (1976). 

5 This amount represents interest and other insurance expenses from 1933 to 1972. 

6 Includes the aggregate amount of $81 million of interest paid on capital stock between 1933 and 1948. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 ANNUAL REPORT  9 

 

 

 

APPENDICES 

Assets and Deposits of Failed or Assisted Insured Institutions and 

Losses to the Deposit Insurance Fund, 1934 - 2021 

Dollars in Thousands 

Bank and Thri® Failures1 

Year2 

Number 

of Banks/ 

Thri®s 

Total 

Assets3 

Total 

Deposits3 

Losses to 

the Fund4 

Total 2,631 $947,307,165 $713,862,572 $105,132,739 

2021 0 0 0 0 

2020 4 454,986 437,138 95,259 

2019 4 208,767 $190,547 27,197 

2018 0 0 0 0 

2017 8 5,081,737 4,683,360 1,083,350 

2016 5 277,182 268,516 42,474 

2015 8 6,706,038 4,870,464 859,244 

2014 18 2,913,503 2,691,485 378,362 

2013 24 6,044,051 5,132,246 1,204,884 

2012 51 11,617,348 11,009,630 2,385,085 

2011 92 34,922,997 31,071,862 6,392,952 

20105 157 92,084,988 78,290,185 15,810,119 

20095 140 169,709,160 137,835,208 25,963,909 

20085 25 371,945,480 234,321,715 17,805,073 

2007 3 2,614,928 2,424,187 157,440 

2006 0 0 0 0 

2005 0 0 0 0 

2004 4 170,099 156,733 3,917 

2003 3 947,317 901,978 62,647 

2002 11 2,872,720 2,512,834 413,989 

2001 4 1,821,760 1,661,214 292,465 

2000 7 410,160 342,584 32,138 

1999 8 1,592,189 1,320,573 586,027 

1998 3 290,238 260,675 221,606 

1997 1 27,923 27,511 5,026 

1996 6 232,634 230,390 60,615 

1995 6 802,124 776,387 84,472 

1994 13 1,463,874 1,397,018 179,051 

1993 41 3,828,939 3,509,341 632,646 

1992 120 45,357,237 39,921,310 3,674,149 

1991 124 64,556,512 52,972,034 6,001,595 

1990 168 16,923,462 15,124,454 2,771,489 

1989 206 28,930,572 24,152,468 6,195,286 

1988 200 38,402,475 26,524,014 5,377,497 

1987 184 6,928,889 6,599,180 1,862,492 

1986 138 7,356,544 6,638,903 1,682,538 

1985 116 3,090,897 2,889,801 648,179 

1934 - 1984 729 16,719,435 12,716,627 2,139,567 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 ANNUAL REPORT  9
 

 

APPENDICES 

Assets and Deposits of Failed or Assisted Insured Institutions and 

Losses to the Deposit Insurance Fund, 1934 - 2021 (continued) 

Dollars in Thousands 

Assistance Transactions 

Year2 

Number 

of Banks/ 

Thri®s 

Total 

Assets3 

Total 

Deposits3 

Losses to 

the Fund4 

154 $3,317,099,253 $1,442,173,417 $5,430,481 

2010 - 2021 0 0 0 0 

20096 8 1,917,482,183 1,090,318,282 0 

20086 5 1,306,041,994 280,806,966 0 

1993 - 2007 0 0 0 0 

1992 2 33,831 33,117 250 

1991 3 78,524 75,720 3,024 

1990 1 14,206 14,628 2,338 

1989 1 4,438 6,396 2,296 

1988 80 15,493,939 11,793,702 1,540,642 

1987 19 2,478,124 2,275,642 160,164 

1986 7 712,558 585,248 93,179 

1985 4 5,886,381 5,580,359 359,056 

1984 2 40,470,332 29,088,247 1,116,275 

1983 4 3,611,549 3,011,406 337,683 

1982 10 10,509,286 9,118,382 1,042,784 

1981 3 4,838,612 3,914,268 772,790 

1980 1 7,953,042 5,001,755 0 

1934 - 1979 4 1,490,254 549,299 0 

o Institutions for which the FDIC is appointed receiver, including deposit payo3, insured deposit transfer, and deposit assumption 

cases. 

» For 1990 through 2005, amounts represent the sum of BIF and SAIF failures (excluding those handled by the RTC); prior to 1990, 

figures are only for the BIF. Aμer 1995, all thriμ closings became the responsibility of the FDIC and amounts are reflected in the 

SAIF. For 2006 to 2021, figures are for the DIF. 

1⁄4 Assets and deposit data are based on the last Call Report or TFR filed before failure. 

1⁄2 Losses to the fund include final and estimated losses. Final losses represent actual losses for unreimbursed subrogated claims 

of inactivated receiverships. Estimated losses generally represent the di3erence between the amount paid by the DIF to cover 

obligations to insured depositors and the estimated recoveries from the liquidation of receivership assets. 

5

 Includes amounts related to transaction account coverage under the Transaction Account Guarantee Program (TAG). The 

estimated losses as of December 31, 2021, for TAG accounts in 2010, 2009, and 2008 are $362 million, $1.1 billion, and $12 

million, respectively. 

6 Includes institutions where assistance was provided under a systemic risk determination. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  
9 

APPENDICES 

B. More About the FDIC

FDIC BOARD OF DIRECTORS 

Jelena McWilliams 

Jelena McWilliams was sworn in as the 21st Chairman of the FDIC 

on June 5, 2018.® She serves a six-year term on the FDIC Board of 

Directors, and is designated as Chairman for a term of five years. 

Ms. McWilliams was Executive Vice President, Chief Legal Officer, 

and Corporate Secretary for Fifth Third Bank in Cincinnati, 

Ohio.® At Fifth Third Bank she served as a member of the 

executive management team and numerous bank committees 

including:®Management Compliance, Enterprise Risk, Risk and 

Compliance, Operational Risk, Enterprise Marketing, and Regulatory Change. 

Prior to joining Fifth Third Bank, Ms. McWilliams worked in the U.S. Senate for six years, most 

recently as Chief Counsel and Deputy Staff Director with the Senate Committee on Banking, 

Housing and Urban Affairs, and previously as Assistant Chief Counsel with the Senate Small 

Business and Entrepreneurship Committee.® 

From 2007 to 2010, Ms. McWilliams served as an attorney at the Federal Reserve Board of 

Governors, where she drafted consumer protection regulations, reviewed and analyzed 

comment letters on regulatory proposals, and responded to consumer complaints.® 

Before entering public service, she practiced corporate and securities law at Morrison & 

Foerster LLP in Palo Alto, California, and Hogan & Hartson LLP (now Hogan Lovells LLP) 

in Washington, D.C.® In legal practice, Ms. McWilliams advised management and boards of 

directors on corporate governance, compliance, and reporting requirements under the 

Securities Act of 1933 and the Securities Exchange Act of 1934.® She also represented publiclyand privately-held companies in mergers and acquisitions, securities offerings, strategic 

business ventures, venture capital investments, and general corporate matters. 

Ms. McWilliams graduated with highest honors from the University of California at Berkeley 

with a B.S. in political science, and earned her law degree from U.C. Berkeley School of Law. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  9
 

APPENDICES 

Martin J. Gruenberg 

Martin J. Gruenberg has been the Acting Chairman of the FDIC 

Board of Directors since February 5, 2022.® Since mid-2018, he 

has served as a member of the FDIC Board.® Prior to that time, 

Mr. Gruenberg also served as Chairman of the FDIC, receiving 

Senate confirmation on November 15, 2012, for a five-year term.® 

Mr. Gruenberg served as Vice Chairman and Member of the FDIC 

Board of Directors from August 2005, until his confirmation 

as Chairman.® He served as Acting Chairman from July 2011 to 

November 2012, and also from November 2005 to June 2006. 

Mr. Gruenberg joined the FDIC Board after broad congressional experience in the financial 

services and regulatory areas.® He served as Senior Counsel to Senator Paul S. Sarbanes 

(D-MD) on the staff of the Senate Committee on Banking, Housing, and Urban Affairs from 

1993 to 2005.® He also served as Staff Director of the Banking Committee’s Subcommittee on 

International Finance and Monetary Policy from 1987 to 1992.® 

Mr. Gruenberg served as Chairman of the Executive Council and President of the International 

Association of Deposit Insurers (IADI) from November 2007 to November 2012.® 

In addition, Mr. Gruenberg served as Chairman of the Federal Financial Institutions 

Examination Council from April 2017 to June 2018. 

Since June 2019, Mr. Gruenberg has served as Chairman of the Board of Directors of the 

Neighborhood Reinvestment Corporation (NeighborWorks America), and he has been a 

member of the Board since April 2018. 

Mr. Gruenberg holds a J.D. from Case Western Reserve Law School and an A.B. from Princeton 

University, Woodrow Wilson School of Public and International Affairs. 

Michael J. Hsu 

Michael J. Hsu became Acting Comptroller of the Currency on 

May 10, 2021, upon his designation as First Deputy Comptroller by 

Secretary of the Treasury Janet Yellen pursuant to her authority 

under 12 U.S.C. 4. 

As Acting Comptroller of the Currency, Mr. Hsu is the administrator 

of the federal banking system and chief executive officer of the 

Office of the Comptroller of the Currency (OCC). The OCC ensures 

that the federal banking system operates in a safe and sound 

manner, provides fair access to financial services, treats customers fairly, and complies with 

applicable laws and regulations. It supervises nearly 1,200 national banks, federal savings 

associations, and federal branches and agencies of foreign banks that serve consumers, 

businesses, and communities across the United States and conducts approximately 70 percent 

of banking activity in the country. These banks range from community banks serving local 

neighborhood needs to the nation’s largest most internationally active banks. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  9
¥ 

APPENDICES 

The Comptroller also serves as a Director of the Federal Deposit Insurance Corporation and 

a member of the Financial Stability Oversight Council and the Federal Financial Institutions 

Examination Council. 

Prior to joining the OCC, Mr. Hsu served as an Associate Director in the Division of Supervision 

and Regulation at the Federal Reserve Board of Governors. In that role, he chaired the 

Large Institution Supervision Coordinating Committee Operating Committee, which has 

responsibility for supervising the global systemically important banking companies operating 

in the United States. He co-chaired the Federal Reserve’s Systemic Risk Integration Forum, 

served as a member of the Basel Committee Risk and Vulnerabilities Group, and co-sponsored 

forums promoting interagency coordination with foreign and domestic financial regulatory 

agencies. 

His career has included serving as a Financial Sector Expert at the International Monetary 

Fund, Financial Economist at the U.S. Department of the Treasury helping to establish the 

Troubled Asset Relief Program, and Financial Economist at the Securities and Exchange 

Commission overseeing the largest securities firms. 

Mr. Hsu began his career in 2002 as a staff attorney in the Federal Reserve Board’s Legal 

Division. He holds of a bachelor of arts from Brown University, a master of science in finance 

from George Washington University, and juris doctor degree from New York University School 

of Law. 

Rohit Chopra 

Rohit Chopra was confirmed as Director of the Consumer Financial 

Protection Bureau on October 12, 2021. The CFPB is a unit of the 

Federal Reserve System charged with protecting families and 

honest businesses from illegal practices by financial institutions, 

and ensuring that markets for consumer financial products and 

services are fair, transparent, and competitive. 

In 2018, Mr. Chopra was unanimously confirmed by the U.S. Senate 

as a Commissioner on the Federal Trade Commission, where he 

served until assuming office as CFPB Director. During his tenure at the FTC, he successfully 

worked to strengthen sanctions against repeat offenders, to reverse the agency’s reliance on 

no-money, no-fault settlements in fraud cases, and to halt abuses of small businesses. He also 

led efforts to revitalize dormant authorities, such as those to protect the Made in USA label 

and to promote competition. 

Mr. Chopra previously served at the CFPB from 2010 to 2015. In 2011, the Secretary of the 

Treasury designated him as the agency’s student loan ombudsman, where he led the Bureau’s 

efforts on student lending issues. Prior to his government service, Mr. Chopra worked at 

McKinsey & Company, the global management consultancy, where he consulted in the 

financial services, health care, and consumer technology sectors. 

Mr. Chopra holds a BA from Harvard University and an MBA from the Wharton School at the 

University of Pennsylvania. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  
9 

APPENDICES 

Blake Paulson 

Blake Paulson resigned from the FDIC Board of Directors as of May 

10, 2021. Mr. Paulson had been an Acting FDIC Board member since 

January 14, 2021. 

Dave Uejio 

Dave Uejio resigned from the FDIC Board of Directors as of October 

12, 2021. Mr. Uejio had been an Acting FDIC Board member since 

January 20, 2021. 

Subsequent Event: 

Jelena McWilliams resigned from the FDIC Board of Directors effective February 4, 2022. 

Director Martin Gruenberg was named Acting FDIC Chairman effective February 5, 2022. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 

APPENDICES 

F

D

IC O

r

g

a

n

i

z

a

t

i

o

n

al C

h

a

rt 

DIVISION OF

INFORMATION 

TECHNOLOGY

Zachary Brown

CISO

OFFICE OF

CHIEF INFORMATION 

SECURITY OFFICER 

DEPUTY TO THE 

CHAIRMAN FOR 

EXTERNAL AFFAIRS 

DEPUTY TO THE 

CHAIRMAN AND

CHIEF FINANCIAL OFFICER

CHIEF INFORMATION 

OFFICER AND

CHIEF PRIVACY OFFICER

Sylvia W. Burns Bret D. Edwards 

OFFICE OF INSPECTOR GENERAL

Jay N. Lerner

OFFICE OF FINANCIAL

INSTITUTION ADJUDICATION

DIVISION OF

RESOLUTIONS AND 

RECEIVERSHIPS

Maureen Sweeney 

LEGAL DIVISION

Revised January 5, 2022 

DIVISION OF

INSURANCE AND 

RESEARCH

Diane Ellis 

DEPUTY TO THE CHAIRMAN 

FOR CONSUMER PROTECTION

AND INNOVATION

Leonard Chanin

DIVISION OF DEPOSITOR 

AND CONSUMER 

PROTECTION

Mark E. Pearce

FDiTECH

Sultan Meghji

Chief Innvovation

Ocer 

DIVISION OF COMPLEX 

INSTITUTION 

SUPERVISION AND 

RESOLUTION

John P. Conneely 

Nikita Pearson 

DEPUTY TO THE 

CHAIRMAN FOR 

FINANCIAL STABILITY

Arthur J. Murton 

DEPUTY TO THE 

CHAIRMAN FOR POLICY

Travis Hill 

GENERAL COUNSEL

Nicholas Podsiadly

Nicholas Podsiadly 

OFFICE OF

LEGISLATIVE AFFAIRS

Andy Jiminez 

OFFICE OF

THE OMBUDSMAN

M. Anthony Lowe

Ombudsman 

OFFICE OF RISK

MANAGEMENT AND 

INTERNAL CONTROLS

Marshall Gentry

Director Director 

Director 

(1) Christopher B. McNeil

(2) Jennifer Whang 

DEPUTY TO THE CHAIRMAN, 

CHIEF OF STAFF AND 

CHIEF OPERATING OFFICER

Brandon Milhorn

BOARD OF DIRECTORS

Jelena McWilliams

FDIC

Chairman 

Martin J. Gruenberg

FDIC

Board Member 

Vacant

FDIC

Vice Chairman 

Michael J. Hsu

Acting Comptroller 

of the Currency

Board Member 

Rohit Chopra

CFPB Director

Board Member

DIVISION OF

RISK MANAGEMENT 

SUPERVISION

Doreen R. Eberley 

OFFICE OF MINORITY AND 

WOMEN INCLUSION 

Nikita Pearson

Director 

Dan Bendler

Director 

DIVISION OF ADMINISTRATION

CORPORATE UNIVERSITY

Suzannah L. Susser 

DIVISION OF

FINANCE 

OFFICE OF

COMMUNICATIONS

Amy Thompson

Director Director General Counsel Director Director 

Administrative Law Judges 

Director and

Chief Learning O›icer 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 196 
ANNUAL REPORT  9
 

APPENDICES 

CORPORATE STAFFING TRENDS 

9,000 

6,000 

3,000 

0 

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

7,476 7,254 6,631 6,385 6,096 5,880 5,693 5,593 5,776 5,670 

FDIC Year–End Stang 

Note: 2012-2021 sta3ing totals reflect year-end full time equivalent sta3. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  9
 

APPENDICES 

Number of Employees by Division/O2ce (Year-End)1 

Total Washington Regional/Field 

Division or O ̈ice: 2021 2020 2021 2020 2021 2020 

Division of Risk 

Management Supervision 2,484 2,559 159 152 2,325 2,407 

Division of Depositor and 

Consumer Protection 787 818 115 116 672 702 

Legal Division 440 438 295 293 145 145 

Division of Administration 375 370 269 264 106 106 

Division of Resolutions 

and Receiverships 317 343 90 96 228 248 

Division of Information 

Technology 284 299 225 234 59 65 

Division of Complex Institution 

Supervision and Resolution 280 258 130 125 150 133 

Division of Insurance 

and Research 199 205 163 166 36 39 

Division of Finance 134 154 131 150 3 4 

Executive Support O3ices» 103 67 92 58 11 9 

Corporate University 65 63 57 56 8 7 

O3ice of the Chief Information 

Security O3icer 49 48 49 48 0 0 

Executive O3ices1⁄4 21 25 21 25 0 0 

O3ice of Inspector General 132 130 84 79 48 51 

TOTAL 5,670 5,776 1,879 1,860 3,792 3,916 

1

 The FDIC reports sta3ing totals using a full-time equivalent methodology, which is based on an employee’s scheduled 

work hours. Division/O3ice sta3ing has been rounded to the nearest whole FTE. Totals may not foot due to rounding. 

2

 Includes the O3ices of the Legislative A3airs, Communications, Ombudsman, FDITECH, Financial Adjudication, 

Minority and Women Inclusion, and Risk Management and Internal Controls. 

3

 Includes the O3ices of the Chairman, Vice Chairman, Director (Appointive), Chief Operating O3icer, Chief Financial 

O3icer, Chief Information O3icer, Consumer Protection and Innovation, External A3airs, Policy, and Financial Stability. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
ANNUAL REPORT  
9
9

APPENDICES 

Sources of Information 

FDIC WEBSITE 

www.fdic.gov 

A wide range of banking, consumer, and financial information is available on the FDIC3⁄4s 

website. This includes the FDIC3⁄4s Electronic Deposit Insurance Estimator (EDIE), which 

estimates an individual’s deposit insurance coverage; the Institution Directory, which contains 

financial profiles of FDIC-insured institutions; Community Reinvestment Act evaluations 

and ratings for institutions supervised by the FDIC; Call Reports, which are bank reports of 

condition and income; and Money Smart, a training program to help individuals outside the 

financial mainstream enhance their money management skills and create positive banking 

relationships. Readers also can access a variety of consumer pamphlets, FDIC press releases, 

speeches, and other updates on the agency’s activities, as well as corporate databases and 

customized reports of FDIC and banking industry information. 

FDIC CALL CENTER 

Phone: 877-275-3342 (877-ASK-FDIC) 

703-562-2222

Hearing Impaired: 800-925-4618 

703-562-2289

The FDIC Call Center in Washington, DC, is the primary telephone point of contact for general 

questions from the banking community, the public, and FDIC employees. The Call Center 

directly, or with other FDIC subject-matter experts, responds to questions about deposit 

insurance and other consumer issues and concerns, as well as questions about FDIC programs 

and activities. The Call Center also refers callers to other federal and state agencies as 

needed. Hours of operation are 8:00 a.m. to 8:00 p.m., Eastern Time, Monday – Friday, and 

9:00 a.m. to 5:00 p.m., Saturday – Sunday. Recorded information about deposit insurance and 

other topics is available 24 hours a day at the same telephone number. 

As a customer service, the FDIC Call Center has many bilingual Spanish agents on staff and has 

access to a translation service, which is able to assist with over 40 different languages. 

FEDERAL DEPOSIT INSURANCE CORPORATION 
APPENDICES 

PUBLIC INFORMATION CENTER 

3501 Fairfax Drive 

Room E-1021 

Arlington, VA 22226 

Phone: 877-275-3342 (877-ASK-FDIC), 

703-562-2200 

Fax: 703-562-2296 

FDIC Online Catalog: https://catalog.fdic.gov 

E-mail: publicinfo@fdic.gov 

Publications such as FDIC Quarterly and Consumer News and a variety of deposit insurance and 

consumer pamphlets are available at www.fdic.gov or may be ordered in hard copy through 

the FDIC online catalog. Other information, press releases, speeches and congressional 

testimony, directives to financial institutions, policy manuals, and FDIC documents are 

available on request through the Public Information Center. Hours of operation are 9:00 a.m. 

to 4:00 p.m., Eastern Time, Monday – Friday. 

OFFICE OF THE OMBUDSMAN 

3501 Fairfax Drive 

Room E-2022 

Arlington, VA 22226 

Phone: 877-275-3342 (877-ASK-FDIC) 

Fax: 703-562-6057 

E-mail: ombudsman@fdic.gov 

The Office of the Ombudsman (OO) is an independent, neutral, and confidential resource and 

liaison for the banking industry and the general public. The OO responds to inquiries about 

the FDIC in a fair, impartial, and timely manner. It researches questions and fields complaints 

from bankers and bank customers. OO representatives are present at all bank closings to 

provide accurate information to bank customers, the media, bank employees, and the 

general public. The OO also recommends ways to improve FDIC operations, regulations, 

and customer service. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
APPENDICES 

Regional and Area Offices 

ATLANTA REGIONAL OFFICE 

Frank Hughes, Acting Regional Director 

10 Tenth Street, NE 

Suite 800 

Atlanta, Georgia 30309 

(678) 916-2200 

States represented: 

Alabama 

Florida 

Georgia 

North Carolina 

South Carolina 

Virginia 

West Virginia 

DALLAS REGIONAL OFFICE 

Kristie K. Elmquist, Regional Director 

1601 Bryan Street 

Dallas, Texas 75201 

(214) 754-0098 

States represented: 

Arkansas 

Colorado 

Louisiana 

Mississippi 

New Mexico 

Oklahoma 

Tennessee 

Texas 

CHICAGO REGIONAL OFFICE 

Gregory Bottone, Regional Director 

300 South Riverside Plaza 

Suite 1700 

Chicago, Illinois 60606 

(312) 382-6000 

States represented: 

Illinois 

Indiana 

Kentucky 

Michigan 

Ohio 

Wisconsin 

KANSAS CITY REGIONAL OFFICE 

James D. LaPierre, Regional Director 

1100 Walnut Street 

Suite 2100 

Kansas City, Missouri 64106 

(816) 234-8000 

States represented: 

Iowa 

Kansas 

Minnesota 

Missouri 

Nebraska 

North Dakota 

South Dakota 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
APPENDICES 

NEW YORK REGIONAL OFFICE 

Jessica Kaemingk, Acting Regional Director 

350 Fifth Avenue 

Suite 1200 

New York, New York 10118 

(917) 320-2500 

States represented: 

Delaware 

District of Columbia 

Maryland 

New Jersey 

New York 

Pennsylvania 

SAN FRANCISCO REGIONAL OFFICE 

Kathy L. Moe, Regional Director 

25 Jessie Street at Ecker Square 

Suite 2300 

San Francisco, California 94105 

(415) 546-0160 

States and territories represented: 

Alaska 

American Samoa 

Arizona 

California 

Federated States of Micronesia 

Guam 

Hawaii 

Idaho 

Montana 

Nevada 

Oregon 

Utah 

Washington 

Wyoming 

BOSTON AREA OFFICE 

Jessica Kaemingk, Acting Regional Director 

15 Braintree Hill Office Park 

Suite 200 

Braintree, Massachusetts 02184 

(781) 794-5500 

States and territories represented: 

Connecticut 

Maine 

Massachsetts 

New Hampshire 

Puerto Rico 

Rhode Island 

Vermont 

Virgin Islands 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 



APPENDICES 

T op M anagement and P erformance Challenges

Facing the Federal Deposit I nsurance Corporation 

February 2022 

Federal Deposit Insurance Corporation 

Office of Inspector General 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 

 

 

 

 

 

 

 

 

 

 

APPENDICES 

Federal Deposit Insurance Corporation 

Office of Inspector General 

Date: February 17, 2022 

M emorandum T o: Board of Directors 

From: Jay N. L erner 

Inspector General 

Subj ect Top Management and Performance Challenges Facing the Federal 

Deposit Insurance Corporation 

The Office of Inspector General (OIG) presents its annual assessment of the Top Management 

and Performance Challenges facing the Federal Deposit Insurance Corporation (FDIC). This 

document summarizes the most serious challenges facing the FDIC and briefly assesses the 

Agency’s progress to address them. 

This Challenges document is based on the OIG’s experience and observations from our 

oversight work, reports by other oversight bodies, review of academic and relevant literature, 

perspectives from Government agencies and officials, and information from private-sector 

entities. In several instances, we discuss topic areas where the OIG had previously conducted 

work to evaluate, audit, and review the FDIC’s progress in these Challenge areas. 

We identified nine Top Challenges facing the FDIC. This document incorporates and 

consolidates discussions of the risks identified in prior years and updates our assessments with 

respect to current conditions and circumstances. This year, we added a new Challenge 

regarding the FDIC’s collection, analysis, and use of data, and we highlighted the importance of 

governance to ensure the effective execution of the FDIC’s mission. 

The Top Challenges facing the FDIC include: 

1. The FDIC’s Readiness for Crises; 

2. Cybersecurity for Banks and Third-Party Service Providers ;

3. Supporting Underserved Communities in Banking ;

4. Organizational Governance at the FDIC; 

5. Information Technology Security at the FDIC; 

6. Security and Privacy at the FDIC; 

7. The FDIC’s Collection, Analysis, and Use of Data; 

8. Contracting and Supply Chain Management at the FDIC; and 

9. Human Resources at the FDIC. 

We believe that this researched and deliberative analysis is beneficial and constructive for 

policy makers, including the FDIC Board and officials, as well as Congressional oversight 

bodies. We further hope that it is informative for the American people regarding the programs 

and operations at the FDIC and the Challenges it faces. 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT  ¥ 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 205 

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Executive Summary 

The FDIC plays a unique and vital role in support of the U.S. financial system. The FDIC 

insures approximately $9.5 trillion in bank deposits at over 4,900 banks, supervises and 

examines more than 3,200 banks, oversees over $123 billion in the Deposit Insurance Fund 

(DIF) that protects bank depositor accounts, and resolves failed and failing banks. 

This Top Management and Performance Challenges (TMPC) document summarizes the most 

serious challenges facing the FDIC and briefly assesses the Agency’s progress to address 

them, in accordance with the Reports Consolidation Act of 2000 and Office of Management and 

Budget Circular A-136 (revised August 10, 2021). This TMPC report is based on the OIG’s 

experience and observations from our oversight work, reports by other oversight bodies, review 

of academic and relevant literature, perspectives from Government agencies and officials, and 

information from private-sector entities. 

To compile this document, we considered comments from the FDIC, and while exercising our 

independent judgment, we incorporated suggestions where appropriate. We acknowledge 

several instances where the FDIC has taken steps to address the Challenge, particularly where 

the Agency has implemented concrete actions that demonstrate a direct relationship towards 

achieving a desired outcome. We also recognize that there may be other ongoing plans and 

intentions for future activities that might still be under development at the time of this writing. 

We identified nine Top Challenges facing the FDIC: 

The FDIC’s Readiness for Crises. The FDIC must be prepared for all crises, because of its 

unique role in overseeing and administering the DIF, which insures the bank accounts of 

millions of depositors and consumers. The FDIC faces Challenges in fully developing its plans 

to respond to an unfolding crisis. Further, the FDIC should consider climate-related risks with 

respect to the report issued by the Financial Stability Oversight Council, and whether it will take 

actions in response to the report’s recommendations in preparing its supervisory and 

examination processes. The FDIC should also be ready to respond to evolving risks associated 

with the current pandemic and other crises, including supervising and examining Governmentguaranteed loans at banks and related fraud risks. 

Cybersecurity for Banks and Third-Party Service Providers. Cybersecurity has been 

identified as the most significant threat to the banking sector and the critical infrastructure of the 

United States. The FDIC faces Challenges to ensure that examiners have the appropriate 

skillsets and knowledge to conduct information technology examinations that adequately identify 

and mitigate cybersecurity risks at banks and their third-party service providers (TSP). Further, 

the FDIC should establish a process to receive, analyze, and act on reports of significant cyber 

incidents at banks in order to adjust supervisory strategies, policies, and training for bank 

examiners; to warn other banks of such threats; and to prepare for potential bank failures. 

Mitigating cybersecurity risk is critical as a cyber incident at one bank or TSP has the potential 

to cause contagion within the financial sector. The FDIC also should assess the risks to banks 

presented by crypto assets, particularly with respect to the anonymous nature of these assets 

and the increased risk of money laundering and other wrongdoing. 

Supporting Underserved Communities in Banking. The FDIC should ensure that its 

programs – including those that support Minority Depository Institutions and Community 

Development Financial Institutions -- are effectively designed to foster financial inclusion and 

reduce the number of unbanked and underbanked individuals. Further, the FDIC’s 

examinations should continue to ensure that banks are in compliance with regulations that 
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combat discriminatory lending practices against low-income borrowers and minority populations. 

The FDIC also should ensure that its examiners have the skills, capabilities, and procedures to 

assess the effect of banks’ use of artificial intelligence in decision-making and minimize any 

undue bias related to the algorithms or historical data used. 

Organizational Governance at the FDIC. Effective governance allows FDIC Board members 

and senior FDIC officials to manage the affairs of the Agency and its risks, formulate regulatory 

policy, and provide clear guidance to banks and FDIC Regional Offices. Through these 

processes, the FDIC can allocate resources, prioritize and improve the flow of risk information to 

decision-makers, and work towards achieving the FDIC’s mission. The FDIC faces Challenges 

in providing clarity concerning the submission of motions presented to the Board of Directors for 

consideration and approval. Further, the FDIC should ensure that the Board, through its Audit 

Committee, can oversee and manage the risks identified and monitored through its Enterprise 

Risk Management Program. The FDIC also should clarify under what circumstances and which 

portions or provisions of Executive Branch policies or guidance are to be followed. In addition, 

the FDIC should ensure that weaknesses in FDIC programs are corrected and 

recommendations are addressed in a timely manner. FDIC rulemaking and guidance should 

also be aligned with other regulators to ensure that banks are not treated differently depending 

upon their primary regulator. FDIC internal guidance also should be clearly defined to ensure 

consistent application of FDIC program requirements. In addition, FDIC rulemaking should be a 

transparent process that analyzes the need for safety and soundness regulations and the 

compliance burden placed on banks. 

Information Technology Security at the FDIC. The FDIC relies on its IT systems for day-today activities and especially during crises. The FDIC continues to face Challenges to ensure 

that it has strong information security processes to guard against persistent and increasing 

cyber threats against Federal agencies. Security control weaknesses of FDIC systems limit the 

effectiveness of FDIC controls, which places the confidentiality, integrity, and availability of FDIC 

systems and data at risk. The FDIC should address its outstanding corrective actions related to 

IT security controls, management of privileged Administrative Accounts, and oversight and 

monitoring of information systems. Further, the FDIC should ensure that it establishes effective 

security controls for its mobile devices and for the automated systems that monitor and control 

critical building services at facilities. 

Security and Privacy at the FDIC. The FDIC employs a workforce of approximately 5,800 

employees and 1,600 contract personnel at 92 FDIC facilities throughout the country, and it is 

custodian of 76 IT systems and voluminous hard-copy records. The FDIC should continue to 

manage risks associated with its personnel security and suitability processes to ensure that 

employees and contractors undergo appropriate and timely investigations and re-investigations 

commensurate with their positions. As well, the FDIC should maintain its risk-based physical 

security program and ensure that its policies promote an FDIC work environment that is free 

from discrimination, harassment, and retaliation. Further, the FDIC should have effective 

programs to safeguard all forms of sensitive and Personally Identifiable Information in its 

possession. 

The FDIC’s Collection, Analysis, and Use of Data. Data and information can enhance 

capabilities to mitigate threats against banks and the U.S. financial system. The FDIC faces 

Challenges in establishing effective processes to govern its sharing of threat information to 

guide the supervision of financial institutions. Effective sharing of threat information helps the 

FDIC to protect the DIF and the financial system by building situational awareness; supporting 

risk-informed decision-making; and influencing supervisory strategies, policies, and training. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 207 

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The FDIC should establish a written governance structure and implement a Charter to establish 

a common understanding of its Threat Information Sharing program and define an overall 

strategy and requirements for it. Further, the FDIC should develop goals, objectives, and 

measures to guide the performance of its Intelligence Support Program, and it should establish 

adequate policies and procedures to define roles and responsibilities. The FDIC faces 

Challenges in the four component functions of Threat Information Sharing – acquisition, 

analysis, dissemination, and feedback. Further, the FDIC should improve the reliability of its 

internal data to ensure that the FDIC Board and senior officials can depend upon the data to 

assess program effectiveness throughout the organization. 

Contracting and Supply Chain Management at the FDIC. The FDIC awarded over $2 billion 

in contracts for goods and services in 2021 in support of its mission. The FDIC faces 

Challenges to establish an effective contract management program that ensures the FDIC 

receives goods and services according to contract terms, price, and timeframes. Further, the 

FDIC should have processes in place to identify and ensure heightened monitoring of contracts 

for Critical Functions, so that the Agency maintains control of its mission functions and prevents 

over-reliance on contractors. The FDIC also should have programs in place to manage and 

mitigate security risks associated with the supply chains for contracted goods and services. 

Further, the FDIC should ensure notifications to contractors and sub-contractor personnel, so 

that they are advised about and aware of their whistleblower rights and protections, and that 

they know how to report allegations of misconduct, violations, and gross mismanagement. 

Human Resources at the FDIC. The FDIC relies on the talents and skills of its employees to 

achieve its mission, and it faces Challenges in managing its human capital lifecycle. At the 

present time, nearly 25 percent of the FDIC workforce is eligible to retire, and this figure climbs 

to nearly 40 percent by 2026. These figures include personnel in key divisions supporting the 

FDIC mission – including the Division of Resolutions and Receiverships (over 59 percent by 

2026); Division of Finance (over 55 percent by 2026); Legal Division (over 51 percent by 2026); 

and Division of Administration (about 49 percent by 2026). Further, the FDIC should continue to 

improve its program for the retention of employees, as well as the collection and analysis of 

relevant personnel data. In addition, the FDIC should continue to ensure diversity and inclusion 

among its workforce. Absent effective human capital management, the FDIC may lose valuable 

knowledge and leadership skill sets upon the departure of experienced examiners, managers, 

and executives. Meeting these Challenges is especially important as the FDIC shifts its 

operations to a hybrid work environment. 
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FDIC’ Readiness ’s Readine ss for C s for Crises

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Crisis Readiness are: 

• Improving the Crisis Readiness

framework at the FDIC and

coordination with other financial

regulators;

• Addressing climate-related risks to

banks; and

• Supervising and examining banks

for the risks associated with

Government-guaranteed loans and

fraud.

The OIG has identified Crisis Readiness as 

a Top Challenge for the FDIC since 2018. 

The Financial Stability Oversight Council 

(FSOC), in its 2021 Annual Report 

(December 2021), stated that the “risks to 

U.S. financial stability today are elevated 

compared to before the pandemic.” The 

FSOC Annual Report further indicated that 

“[s]ome episodes in financial markets [in 

2021] generated unusually high volatility. . . 

Vulnerabilities include structural weakness 

in the financial system and its regulatory 

framework. Vulnerabilities in the financial 

system can amplify the impact of an initial 

shock, potentially leading to substantial 

disruptions in the provision of financial 

services.” The FDIC should continue its 

efforts to be prepared for a wide range of 

crises that could affect bank operations, 

including cybersecurity threats, natural 

disasters, climate change, money 

laundering, and terrorism. 

Improving the Crisis Readiness 

Framework at the FDIC and 

Coordination with Other Financial 

Regulators 

The FDIC should fortify its operations and 

activities to address risks through the 

implementation of its Crisis Readiness 

plans. The FDIC should have agile 

supervisory processes to address risks 

stemming from crises, including climaterelated risks. 

In our OIG report, The FDIC’s Readiness for 

Crises (April 2020), we found that the FDIC 

did not have documented Agency policy and 

procedures for a crisis readiness planning 

process; did not have an Agency-wide allhazards readiness plan nor Agency-wide 

hazard-specific readiness plans; and did not 

train personnel on the plans’ contents. The 

FDIC needed to fully establish seven 

elements of crisis readiness to be prepared 

to respond to any type of crisis that may 

impact the banking system: (1) policies and 

procedures; (2) plans; (3) training; (4) 

exercises; (5) lessons learned; (6) 

maintenance; and (7) assessment and 

reporting. 

Based upon the findings in our report, the 

FDIC has taken several steps to institute 

crisis planning policies and procedures and 

has established a new Crisis Readiness & 

Response Section within the Division of 

Administration. While most of our 

recommendations have been implemented, 

the FDIC has yet to implement an important 

recommendation from our report issued in 

April 2020: to establish and implement 

Agency-wide hazard-specific readiness 

plans. Hazard-specific plans address 

special response procedures that may be 

unique to a particular hazard. The FDIC 

plans to implement this recommendation by 

March 2022. 

In addition, the FDIC should coordinate with 

FSOC and its member agencies on Crisis 

Readiness planning. Both the Government 

Accountability Office (GAO) and the 

International Monetary Fund (IMF) have 

recommended that FSOC enhance its crisis 

preparedness role.

1 In particular, the IMF 

stated that FSOC “should devote greater 

attention to ensuring that the [Federal 

banking regulatory agencies] and the 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 209 

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Treasury have comprehensive and 

complementary organization-wide 

preparedness plans.” FSOC’s mandate 

includes responding to emerging financial 

stability threats and serving as a forum for 

coordination among its member agencies. 

As noted by the IMF, this design of FSOC 

allows for “collective crisis preparation to 

ensure decisive and coordinated responses 

from the entire FSOC community.” 

The Council of Inspectors General on 

Financial Oversight (CIGFO)2 is preparing a 

guidance document for FSOC that is a 

compilation of information and activities that 

are integral to pre-crisis planning and crisis 

management. Once issued, the CIGFO 

Guidance may be used to assist FSOC in 

fulfilling its coordination role and help 

identify risks to the financial stability of the 

United States by considering: (i) the type of 

crisis planning materials that are available 

for collection and dissemination to and from 

member agencies; (ii) the threats posed to 

financial stability relating to potential gaps in 

crisis planning activities; and (iii) prioritizing 

crisis planning. In addition, the Guidance 

will provide useful information to member 

agencies about crisis readiness practices in 

order to improve preparedness procedures; 

identify potential gaps in readiness plans; 

and assist in managing future crises. The 

FDIC, as a member agency of FSOC, is in a 

position to support and advance this 

interagency effort. 

Addressing Climate-Related Risks 

to Banks 

Banks may incur climate-related risks from 

exposure to losses from companies that rely 

on fossil fuels.3 For example, banks may 

face losses on loans issued to entities that 

invest in oil, gas, power, utilities, and 

agriculture. According to CNBC, the “60 

largest commercial and investment banks 

have collectively financed $3.8 trillion in 

fossil fuel company loans between 2016 

and 2020.”4 

For the first time, both FSOC and the 

Federal Reserve Bank of New York have 

reported that climate change may affect the 

financial sector.5 According to the Office of 

the Comptroller of the Currency (OCC), 

“[w]eaknesses in how banks identify, 

measure, monitor, and control the potential 

physical and transition risks associated with 

a changing climate could adversely affect a 

bank’s safety and soundness, as well as the 

overall financial system.”6 

Further, bank portfolios include risk 

exposure to businesses and households 

that may suffer physical effects from 

climate-related risks.

7 According to 

estimates from the National Oceanic and 

Atmospheric Administration (NOAA), the 

cumulative cost for the 285 weather and 

climate disasters in the United States in 

2020 exceeded $1.875 trillion, with 22 

events resulting in at least $1 billion in 

damages (Figure 1). 
 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDICES 

Figure 1: U.S. 2020 Billion-Dollar Weather and Climate Disasters 

Source: NOAA National Centers for Environmental Information, U.S. Billion-Dollar Weather and Climate Disasters (2021). 

On May 20, 2021, the President signed should compile an inventory of 

E xecutive Order 14030, C limate-Related existing climate-related risk data and 

F inancial Risk, to “advance consistent clear, develop plans to acquire additional 

intelligible, comparable, and accurate needed data through collection, 

disclosure of climate-related financial risk.” sharing, or procurement. 

This E xecutive Order required, among other 

things, an assessment of climate-related 

financial risk by Federal financial regulators. 

• Enhancing public climate-related

disclosures. Agencies should

assess current public disclosure

On October 21, 2021, FSOC issued its 

requirements and adj ust them to

address climate-related risks.

Repo rt o n C limate-Related F inancial Risk 

(FSOC Climate Report). The FSOC 

• Assessing and mitigating climaterelated risks that could threaten

Climate Report characterized climate 

change as an “emerging threat to the 

financial stability of the United States” and 

made 30 recommendations to FSOC 

the stability of the financial

system. Agencies should use

scenario analysis such as modeling

to assess climate-related financial

financial risks. Agencies should

invest in their capacity to define,

identify, measure, monitor, assess,

and report on the financial impact of

climate change.

• Filling climate-related data and

methodology gaps. Agencies

FEDERAL DEPOSIT INSURANCE CORPORATION 

members related to four topic areas : risk and assess whether additional

regulations or guidance are needed

• Building capacity and expanding

efforts to address climate-related

to clarify supervisory expectations.

The FSOC Climate Report noted that 

coordination among regulators, including 

international bodies, should be robust in 

order to expand capacity, improve data and 

measurement, enhance disclosures, assess 

the scale of potential vulnerabilities, and 

make appropriate adj ustments in regulatory 

ANNUAL REPORT   
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and supervisory tools. CIGFO is currently 

reviewing the actions of FSOC and its 

member agencies regarding the 

implementation of Executive Order 14030 

and the recommendations in the FSOC 

Climate Report. 

The FDIC Chair (hereinafter referring to the 

Chair who served from June 2018 to 

February 2022) abstained from casting her 

vote on the FSOC Climate Report, 

explaining that “FSOC has not had an 

adequate opportunity to conduct sufficient 

analysis, fully consider broader macro 

consequences, and thoroughly evaluate the 

impact of its recommendations.”8 The FDIC 

will need to determine whether it intends to 

implement the recommendations contained 

in the FSOC Climate Report. If the FDIC 

plans to implement the FSOC 

recommendations, the Agency will need to 

decide how it will undertake such actions. If 

the FDIC does not intend to implement such 

recommendations, it may be out of step with 

other Federal financial regulators with 

respect to bank examinations, crisis 

preparedness, and risk management. 

In response to performance goals noted in 

the FDIC 2021 Annual Performance Plan, 

FDIC economists and policy staff have been 

working with other regulatory agencies and 

international bodies on climate-related 

financial risks, including participation on the 

Task Force for Climate-Related Financial 

Risks of the Basel Committee on Banking 

Supervision. The FDIC Division of 

Insurance and Research also has 

conducted research on climate-related risk 

to local banks and economies for six 

weather events in the United States. This 

research also assessed the impact on lowand moderate-income areas before and 

after each climate event. 

In late 2021, the FDIC engaged with other 

banking regulators to draft a Request for 

Information and Comment (RFI/C) on 

climate-related financial risks. However, 

this RFI/C document was never issued or 

published, and as a result, no comments 

were received. 

On December 16, 2021, the OCC issued a 

set of draft principles designed to support 

the identification and management of 

climate-related financial risks at institutions. 

These risks include Credit Risk, Liquidity 

Risk, Operational Risk, Legal/Compliance 

Risk, as well as other financial and nonfinancial risks. FDIC Regional Risk 

Committees have identified climate-related 

risks on a regional level, but as of 

December 2021, the FDIC had not identified 

climate-related risk on its Agency-wide Risk 

Inventory or Risk Profile as part of its 

Enterprise Risk Management program. 

In order to address the FSOC 

recommendations, the FDIC would need a 

coordinated effort among its Divisions and 

Offices, other regulators, and international 

organizations.9 In so doing, the FDIC would 

need to continue to gather climate-related 

risk data and establish processes to define, 

measure, monitor, assess, and report on 

these risks. 

Further, according to the FSOC Climate 

Report, climate-related risk may 

disproportionately affect vulnerable 

populations and underserved communities. 

Additionally, the Environmental Protection 

Agency stated that “the most severe harms 

from climate change fall disproportionally 

upon underserved communities who are 

least able to prepare for, and recover from, 

heat waves, poor air quality, flooding and 

other impacts.”10 The FDIC will need to 

continue to consider how such risks affect 

its programs serving these communities. 

Supervising and Examining Banks 

for the Risks Associated with 

Government-Guaranteed Loans 

and Fraud 

In March 2020, the Coronavirus Aid, Relief, 

and Economic Security Act (CARES Act) 

created the Paycheck Protection Program 
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(PPP) in order to provide financial relief and 

Government-guaranteed loans to small 

businesses adversely affected by the 

pandemic. The PPP loans are provided 

through our Nation’s banks and the program 

is administered by the Small Business 

Administration (SBA). According to the 

SBA, more than 11 million PPP loans were 

issued by more than 5,400 lenders— 

primarily community banks supervised by 

the FDIC. These PPP loans amounted to 

nearly $800 billion.11 According to a study 

by the University of Texas, it is estimated 

that more than seven percent of loans made 

by banks had indications of fraud.

12 

As of March 2021, approximately 83 percent 

of FDIC-supervised institutions (2,689 

banks) carried PPP loans on their balance 

sheets. These institutions held 

approximately 1.5 million PPP loans totaling 

about $145 billion. Based on our analysis of 

PPP loan data, 46 FDIC-regulated banks 

had PPP loan portfolios that accounted for 

more than 20 percent of the bank’s total 

assets. In fact, six such banks held 

portfolios where PPP loans ranged from 50 

to 75 percent of the bank’s total assets. 

As of March 2021, the U.S. Government 

has charged 474 defendants in 56 Federal 

districts with crimes related to pandemic 

fraud.13 In particular, FDIC OIG 

investigations resulted in more than 110 

indictments and criminal complaints, 

resulting in 65 arrests and 41 convictions. 

These cases involve defendants who aim to 

steal funds from a Government program 

that was intended to help those most in 

need during the pandemic. The PPP fraud 

schemes are complex and sophisticated, 

and they involve the use of synthetic 

identities, financial technology services 

(FinTech), bank insiders, and criminal 

organizations. 

In June 2020, the FDIC stated its view that, 

“[g]iven the 100 percent SBA guarantee, 

there is, in effect, no credit risk associated 

with loans extended under the program, 

provided the lender complied with its 

obligations under the PPP.”14 However, 

because of the substantial volume of PPP 

loans at FDIC banks and the potential fraud 

associated with this program, there may be 

risk to banks that have not complied with 

the requirements of the PPP loan program. 

According to the program requirements, the 

Government may be released from its 

guarantee obligation if a bank fails to 

materially comply with program 

requirements, such as loan administration, 

underwriting, and servicing. If banks are not 

in compliance with program requirements, 

they may be required to absorb PPP loan 

losses. As a result, the loan guarantee is 

not absolute, and banks may bear credit risk 

for non-compliance with the PPP program. 

The OCC has recognized banks’ 

heightened compliance risks for PPP loans 

in its recent report Semiannual Risk 

Perspectives (Fall 2021), as well as in its 

prior OCC reports. In addition, PPP loans 

may pose reputational and compliance risks 

to financial institutions, and banks may have 

to set aside additional funding to address 

compliance and legal risks associated with 

potential loan revocation. We have ongoing 

work to review the FDIC’s examination of 

the risks associated with PPP and other 

Government-guaranteed loans. 

As a banking regulator that insures deposits 

and resolves failed banks, the FDIC must 

remain vigilant in preparing for future crises. 

The FDIC should continue to expeditiously 

develop and implement its Crisis Readiness 

framework and coordinate with other 

financial regulators. In so doing, the FDIC 

should assess and address the impact of 

climate-change risks in its crisis 

preparedness program activities and bank 

supervision. Further, the FDIC should 

closely examine the risks posed by 

guaranteed loan fraud. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 213 

APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cybe cu ty at Banks and

Thi a y ice P viders

Cyberse ricuty at Banks and 

Third-P rt Serv d-Party Service Providers 

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Cybersecurity at Banks and 

Third-Party Service Providers (TSP) are: 

• Ensuring that FDIC bank 

examinations adequately assess 

and address cybersecurity risks at 

financial institutions and their TSPs; 

• Ensuring that banks report serious 

cyber security incidents to the FDIC 

in a timely manner, so that it can 

take appropriate action; and 

• Supervising and managing risks 

associated with crypto assets. 

The OIG has identified Cybersecurity in the 

banking sector as a Top Challenge for the 

FDIC since 2018, particularly with respect to 

TSPs and emerging technologies. 

FSOC, in its 2021 Annual Report 

(December 2021), noted that “[a] 

destabilizing cybersecurity incident could 

potentially threaten the stability of the U.S. 

financial system by disrupting a key 

financial service or utility, causing loss of 

confidence among a broad set of customers 

or market participants, or compromising the 

integrity of critical data.” The FSOC Annual 

Report continued that the financial sector “is 

vulnerable to ransomware and other 

malware attacks, denial of service attacks, 

data breaches, and other events. Such 

incidents have the potential to impact tens 

or even hundreds of millions of Americans 

and result in financial losses of billions of 

dollars due to disruption of operations, theft, 

and recovery costs.” 

In April 2021, the Chairman of the Federal 

Reserve Board (FRB) also identified 

cybersecurity risk at banks as the most 

significant risk to financial institutions 

today.15 The FRB Chairman explained that 

"[t]here are cyber-attacks every day on all 

major institutions” and a successful attack 

on a large institution could cause a broad 

part of the financial system to come to a 

halt. According to the OCC Semiannual 

Risk Perspective (Fall 2021), banks’ 

expanded use of remote work for 

employees and increased use of TSPs 

increases the importance of cyber controls. 

Analysis by the Financial Crimes 

Enforcement Network (FinCEN) found that 

banks reported more than $590 million in 

suspicious activity related to ransomware in 

just the first 6 months of 2021. This figure 

was greater than the amount reported for 

the entire previous year ($416 million 

reported in 2020) – an increase of 

approximately 41 percent. 

Banks may suffer cyber attacks directly at 

the institutions, or alternatively through 

interconnections with third parties that 

provide banks with services, such as 

accounting, transaction processing, loan 

servicing, and human resources.16 The 

2021 FSOC Annual Report stated that 

“financial institutions have increased their 

reliance on third-party service providers for 

teleworking tools and services. The 

interdependency of these networks and 

technologies supporting critical operations 

magnifies cyber risks, threatening the 

operational risk mitigation capabilities not 

just at individual institutions, but also of the 

financial sector as a whole.” 

In the OCC Semiannual Risk Report (Fall 

2021), the OCC recognized that cyber 

actors continue to exploit “vulnerabilities in 

third-party hardware and software systems 

to conduct malicious cyber activities.” 

Further, the Federal Reserve noted that 

“[c]yber shocks may spread through the 

financial system through complex and often 

unrecognized interdependencies across 

firms, including a layer of exposures to 

shared technologies and third-party service 

providers.”17 For example, in December 
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2021, the Cybersecurity & Infrastructure 

Security Agency issued an Emergency 

Directive regarding a vulnerability in remote 

software used by banks known as Apache 

Software Foundation’s Log4j. For banks 

running this software, the vulnerability may 

allow hackers to download malware in order 

to steal customer login information, transfer 

funds, and open fraudulent accounts.18 

Also, in July 2021, cyber-hackers targeted 

the remote software of information 

technology (IT) firm Kaseya, which provides 

software as a service to banks. As a result, 

hackers were able to infiltrate Kaseya 

customers’ networks and install 

ransomware. The ransomware locked the 

victim companies’ data and released it only 

after a ransom of $70 million was paid in 

cryptocurrency. 

Assessing and Addressing 

Cybersecurity Risks at Banks and 

Third-Party Service Providers 

According to the Boston Consulting Group, 

“[f]inancial services firms are 300 times as 

likely as other companies to be targeted by 

a cyberattack.”19 A study by Constella 

Intelligence found that between 2018 and 

2021, financial services companies suffered 

nearly 6,500 breaches that exposed 3.3 

million records, including email 

communications, dates of birth, credit card 

information, addresses, telephone numbers, 

and account login credentials.20 Further, 

bank employees’ remote work increases 

cyber risks as employees access 

information remotely through multiple 

connections.

21 Employee wireless 

networks, router software, and cameras 

provide new means for cyber attacks. 

Financial institutions of all sizes, including 

community banks, may be targets of cyber 

attacks. For example, in May 2021, two 

ransomware groups appear to have 

infiltrated the servers of three community 

banks, stealing data and demanding a 

ransom.22 In the following month, a 

ransomware group attacked a New Jersey 

community bank. The bank stated that it 

was able to contain the attack, because it 

was made on a network that was separate 

from its operational systems.23 

FDIC IT examinations must be capable of 

identifying and addressing weaknesses in 

cybersecurity risk management at 

supervised banks and their TSPs. The 

FDIC conducts IT risk examinations to 

assess whether bank management has 

appropriate controls in place to mitigate 

cybersecurity risks and to assess financial 

institutions’ management of TSP risk. The 

FDIC also examines a subset of TSPs for 

the soundness of their risk management 

and cybersecurity practices. Since 2016, 

the FDIC has been using the Information 

Technology Risk Examination (InTREx) 

work program24 to conduct bank IT 

examinations and assess financial 

institutions’ oversight of TSPs. An initial 

InTREx procedure, the Information 

Technology Profile scoring matrix, is used 

by examiners to determine the scope of an 

IT examination consistent with the bank’s IT 

complexity and risk profile, and to allocate 

resources to the examination. The scope of 

an IT examination may increase due to, 

among other things, the introduction of new 

business lines or technology, or the addition 

of a TSP. 

The FDIC should ensure that its 

assessments accurately capture current and 

relevant risks and reflect the scope and 

complexity of banks’ IT security and 

systems. The FDIC should also ensure that 

it has appropriate examination processes, 

resources, and staff. FDIC examiners 

should have up-to-date information on cyber 

controls and threats, and the requisite skills 

to identify risks and complete thorough 

examinations. 

We are currently conducting an audit of the 

InTREx program. The objective of our work 

is to determine the effectiveness of the 

InTREx program in assessing and 

addressing IT and cyber risks at FDICsupervised financial institutions. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 215 

APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reporting Cybersecurity Incidents 

at Banks 

Banks should report cyber incidents to 

Federal regulators in a timely manner so 

that the regulators may take appropriate 

supervisory actions to address and mitigate 

the risks associated with such incidents. It 

is important for regulators to receive this 

information, as a cyber incident at one bank 

could result in contagion from the affected 

bank to another bank, and prompt similar 

attacks at other banks. Armed with 

knowledge of cyber incidents, the FDIC can 

warn other supervised banks of these 

threats and execute preparations for 

potential bank failures if needed. Further, 

cyber incident reporting may allow the FDIC 

to shift examination and resolution 

resources to address these cyber risks. 

The FDIC also may use these incident 

reports to adjust its supervisory strategies, 

as well as its examinations, policies, and 

training to assist examiners in identifying 

and mitigating emerging risks. 

On April 30, 2020, the OIG issued a 

Management Advisory Memorandum to the 

FDIC uncovering a gap in regulation. 

Federal regulations did not require banks to 

report destructive cyber incidents to Federal 

banking regulators, even though such 

incidents could jeopardize the safety and 

soundness of an institution. In response to 

our OIG Management Advisory 

Memorandum, Federal banking regulators 

proposed a regulation that would require 

financial institutions to promptly notify their 

primary Federal regulator in the event of a 

computer security incident.25 

On November 18, 2021, Federal banking 

regulators promulgated a rule requiring that 

banks report computer security incidents 

“no later than 36 hours after the banking 

organization determines that a notification 

incident has occurred.”26 The FDIC should 

ensure that it has clear guidance, 

procedures, and processes in place to 

receive, evaluate, analyze, and investigate 

these reports from the banks. 

Supervising and Managing Risks 

Posed by Crypto Assets 

Crypto assets are a digital form of value that 

is issued or transferred using distributed 

ledger or blockchain technology.

27 The 

2021 FSOC Annual Report recognized that 

“the rapid growth of digital assets, including 

stablecoins and lending and borrowing on 

digital asset trading platforms, is an 

important potential emerging vulnerability.” 

The FSOC Report continued that digital 

assets “pose risks related to illicit financing, 

national security, cybersecurity, privacy, and 

international monetary and payment system 

integrity.” It has been reported that the 

cryptocurrency market amounted to more 

than $2 trillion.28 

According to the OCC Semiannual Risk 

Report (Fall 2021), banks are exploring “the 

development of crypto-custody services, 

crypto-asset derivative products, or the 

provisions of access to third-party cryptorelated products.” The Basel Committee on 

Banking Supervision stated that virtual 

currencies “raise financial stability concerns 

and increase risks faced by banks.”29 

Crypto assets “have exhibited a high degree 

of volatility, and could present risks for 

banks as exposures increase, including 

liquidity risk, credit risk, market risk, 

operational risk (including fraud and cyber 

risks), money laundering / terrorist financing 

risk, and legal and reputation risks.”30 

The U.S. regulatory landscape for digital 

assets is unclear and fragmented. In May 

2021, the Secretary of the Treasury stated 

that the United States does not yet have an 

“adequate framework” for tackling 

cryptocurrency regulation.31 

The FDIC Chair noted that stablecoins (a 

fungible token pegged to or redeemable for 

fiat currency) could also lead to “money 

migrating out of insured banks with 
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significant ramifications for credit creation, 

financial stability, and bank funding.”32 The 

Chairman of the FRB stated that “if 

[stablecoins] are going to be a significant 

part of the payments universe . . . we need 

an appropriate regulatory framework, which 

frankly we don't have.”33 The President’s 

Working Group on Financial Markets’ 

Report on Stablecoins noted that the 

prospect of a stablecoin not performing 

could cause mass redemption of multiple 

coins and fire sales of the reserve assets.34 

The market capitalization for stablecoins 

was estimated at approximately $115 billion 

as of July 2021.35 

The FDIC should assess the risks involved 

with banks’ entry into crypto assets and 

stablecoins, and determine what regulatory 

actions to take. The FDIC should also 

ensure that examiners have proper skillsets 

and training to understand and assess 

these risks. In addition, because the FDIC 

becomes responsible for the assets of a 

failed U.S. bank, the FDIC should determine 

how to resolve banks that hold digital 

assets. On May 21, 2021, the FDIC issued 

a request for information soliciting 

comments about current and potential 

digital asset activities. On November 23, 

2021, bank regulators, including the FDIC, 

summarized their work on a crypto asset 

policy “sprint” on crypto-asset-related 

activities.

36 The FDIC’s work in this area 

remains ongoing. 

A cyber incident at a bank or its TSP has 

the potential for wide disruption throughout 

the banking sector. The FDIC should 

ensure that it has the procedures and 

personnel with the appropriate skills to 

conduct effective IT examinations to assess 

banks’ cybersecurity risks. The FDIC 

should receive prompt notification of bank 

cyber incidents in order to take appropriate 

supervisory action. Further, the FDIC 

should evaluate the risks to banks posed by 

cryptocurrencies and stablecoins, and 

adjust FDIC guidance, policies, supervisory 

strategies, examination procedures, and 

training accordingly. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 217 

APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suppo ing Un e ed mmunities in Banking rting UnderservedCommunities in Banking Co

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Supporting Underserved 

Communities are: 

• Fostering financial inclusion for the 

unbanked and underbanked; and 

• Understanding bias risk associated 

with technology. 

The OIG has identified Supporting 

Underserved Communities as a Top 

Challenge for the FDIC since 2020. 

According to the World Bank, financial 

inclusion is a “key enabler to reducing 

poverty and boosting prosperity.”37 As 

noted by the FDIC Chair, “[w]hen talking 

about financial inclusion, the question 

before us is not merely whether a person 

has a checking account or a credit card but, 

more fundamentally, whether they are a part 

of the financial fabric of the United States.”38 

Fostering Financial Inclusion for 

the Unbanked and Underbanked 

On January 20, 2021, the President issued 

Executive Order 13985, Advancing Racial 

Equity and Support for Underserved 

Communities Through the Federal 

Government, which aims to pursue a 

comprehensive approach to advancing 

equity for all, including people of color and 

others who have been historically 

underserved, marginalized, and adversely 

affected by persistent poverty and 

inequality. The Executive Order requires 

that most Federal agencies “recognize and 

work to redress inequities in their policies 

and programs that serve as barriers to 

equal opportunity.” Such policies and 

programs should include those geared 

towards financial inclusion. 

In June 2021, the FDIC Chair emphasized, 

however, that despite the Agency’s efforts, 

“millions of American households remain 

unbanked and millions of Americans do not 

have a credit score.”39 The Chair noted that 

“[t]he persistent gap in access to the 

banking system has shown that we must 

think outside the box to create a regulatory 

system that will help close this gap.” 

In a study published in October 2020, the 

FDIC found that 7.1 million U.S. households 

(5.4 percent) lacked a checking or savings 

account at an insured financial institution. 

Importantly, minority households were more 

likely to be among the unbanked. For 

example, 13.8 percent of Black households 

surveyed and 12.2 percent of Hispanic 

households surveyed were unbanked in 

2019, as compared to only 2.5 percent of 

White households. 

Further, as noted in the Crisis Readiness 

section of this Report, climate-related risk 

may disproportionately affect vulnerable 

populations and underserved communities. 

The Environmental Protection Agency 

stated that “the most severe harms from 

climate change fall disproportionally upon 

underserved communities who are least 

able to prepare for, and recover from, heat 

waves, poor air quality, flooding and other 

impacts.”40 The FDIC will need to consider 

how climate-related risks affect its programs 

serving these communities. 

The FDIC should also ensure that its 

programs designed to foster financial 

inclusion and reduce the number of 

unbanked and underbanked individuals are 

effective. These programs include support 

of Minority Depository Institutions (MDI) and 

Community Development Financial 

Institutions (CDFI) that provide financial 
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products and services to individuals and 

businesses in minority, low-income, and 

rural communities. The FDIC also promotes 

access to banking through community 

affairs programs in its Regional Offices. 

Further, the FDIC conducts examinations to 

ensure that banks are in compliance with 

regulations such as the Community 

Reinvestment Act (CRA). The CRA and its 

regulations aim to “combat the legacy of 

discriminatory lending practices against lowincome borrowers and minority 

populations.”41 

In September 2021, the FDIC launched an 

initiative to address unbanked households. 

The Mission-Driven Bank Fund is a capital 

investment vehicle that will channel privatesector investments to support MDIs and 

CDFIs. The Fund is intended to help MDIs 

and CDFIs raise capital. Although the FDIC 

does not participate in the Fund’s 

management or individual investment 

decisions, the FDIC should assess the 

alignment of the Fund’s ongoing operations 

with FDIC objectives to ensure the 

advancement of equity in underserved 

communities. In addition, in November 

2021, the FDIC established a new Office of 

Minority and Community Development 

Banking to support the Agency’s 

engagement with MDIs, CDFIs, and other 

mission-driven banks.

42 This effort remains 

under development. 

Understanding Bias Risk 

Associated with Technology 

According to the World Economic Forum 

survey of 151 global financial services 

companies, 85 percent are using artificial 

intelligence (AI) in their operations.43 

Banks’ use of AI includes, for example, 

lending decisions.44 While AI has the 

potential to lower lending costs and improve 

the speed of credit decisions, such 

innovative technologies may have 

unintended consequences, such as the 

exclusion of individuals based on biased 

algorithms or flawed data.45 

The Federal Reserve Bank of San 

Francisco noted that unchecked 

technological innovation can introduce a 

variety of risks and consumer harm.

46 

Specifically, the Federal Reserve Bank of 

San Francisco cited a research study from 

the University of California at Berkley that 

indicated that machine learning can result in 

minority borrowers experiencing higher loan 

rates and more expensive financial 

products. Algorithms and complex machine 

learning models, such as AI, may rely on 

outdated or flawed data or mistakes in rule 

development.

47 For example, AI algorithms 

may perpetuate discriminatory lending 

practices and higher interest rates charged 

to African American and Latino borrowers, 

as reflected in historical loan data.

48 

On November 29, 2021, the Chairwoman of 

the Committee on Financial Services, U.S. 

House of Representatives, and 

Congressman Bill Foster transmitted a letter 

to financial regulators, including the FDIC, 

noting that the use of historical data as 

“inputs for AI and ML [machine learning] can 

reveal longstanding biases, potentially 

creating models that discriminate against 

protected classes, such as race or sex, or 

proxies of these variables.” The Committee 

highlighted several principles: 

Transparency and Explainability; Oversight 

and Enforceability; Safeguarding Consumer 

Privacy; and Promoting Fairness and Equity 

in AI Usage. The letter encouraged 

regulators to keep pace with the rapid 

developments to “ensure that AI regulation 

and rulemaking can meaningfully address 

appropriate governance, risk management, 

and controls over AI.” 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 219 

APPENDICES

 

 

 

The FDIC’s consumer compliance 

examiners should have the proper skillsets 

to understand and assess the new 

technologies used by banks and detect 

potential biases. Further, examiners should 

have effective examination processes and 

procedures to monitor for technology 

biases. 

The FDIC plays an important role in 

fostering economic inclusion and 

maintaining confidence in the U.S. banking 

system. It is well positioned to help support 

and empower minority communities’ access 

to capital. The FDIC should continue its 

efforts to assess the effectiveness of its MDI 

and CDFI outreach programs and continue 

to promote financial and technological 

innovations to achieve economic inclusion 

while at the same time avoiding potential 

biases. 
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O nizational Gove ance at the FDIC Organizational Governance at the FDIC rga rn

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Organizational Governance 

are: 

• Clarifying protocols for submissions

to the FDIC Board of Directors;

• Incorporating important risks into the

FDIC’s Enterprise Risk Management

(ERM) program;

• Explaining whether the FDIC will

follow certain Executive Branch

policies and guidance;

• Addressing recurring

recommendations;

• Ensuring clarity and consistency of

FDIC policies and alignment with

other regulators; and

• Enhancing FDIC rulemaking.

The OIG has identified Governance as a 

Top Challenge for the FDIC since 2018, 

particularly with respect to ERM and 

rulemaking. 

FDIC Board members and senior FDIC 

officials are responsible for administering 

the affairs of the Agency, managing its risks, 

establishing regulatory policy, and providing 

clear guidance to banks and throughout the 

Agency. Organizational governance refers 

to a management framework that 

incorporates operational, financial, risk 

management, and reporting processes so 

that FDIC Board members and senior 

officials can effectively plan, govern, and 

meet strategic objectives.49 A governance 

framework should ensure strategic 

guidance, effective monitoring of 

management, and accountability to 

stakeholders.50 

FDIC Board members are appointed by the 

President and confirmed by the Senate, and 

include: the FDIC Chair, FDIC Vice Chair, 

Comptroller of the Currency, Director of the 

Bureau of Consumer Financial Protection 

(CFPB), and an independent Director. The 

FDIC Board has been operating with only 

four members since 2015, and the Vice 

Chair position has been vacant since April 

2018. On December 31, 2021, the FDIC 

Chair announced that she would be 

resigning from her position, effective 

February 4, 2022 – thus, leaving three 

remaining members of the FDIC Board (an 

acting FDIC Chair, CFPB Director, and 

acting Comptroller of the Currency). In 

February 2022, the FDIC’s Chief of Staff 

and Chief Operating Officer, Chief 

Innovation Officer, General Counsel, and 

Deputy Director for Policy also announced 

their departures from the FDIC. The 

Director of the Division of Insurance and 

Research will also retire in 2022. 

Clarifying Protocols for 

Submissions to the FDIC Board of 

Directors 

FDIC Board members play a critical role in 

shaping FDIC policies and processes. 

FDIC Board members are responsible for 

considering and approving motions brought 

before the Board, such as the issuance or 

modification of regulations and guidance. 

However, the process for bringing such 

measures to the Board has been in dispute. 

On November 26, 2021, the CFPB Director, 

as a member of the FDIC Board, requested 

that the Board take action to publish a 

Request for Information and Comment 

(RFI/C) regarding bank merger transactions; 

this action was also recommended by two 

other Board members. On the same day, 

the FDIC General Counsel wrote that this 

action was not valid, because the FDIC 

bylaws do not confer authority to an 

individual Board member to circulate an 

item for a vote, and such authority rests with 

the Executive Secretary under the 

supervision of the General Counsel and at 

the direction of the Chair. 
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APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On December 6, 2021, the three Directors 

submitted written votes to approve the 

RFI/C, and the FDIC General Counsel 

reiterated his position that the CFPB 

Director (as a member of the FDIC Board) 

did not have authority to circulate an item 

for a vote, and that the subsequent 

Directors’ responses did not constitute valid 

votes. The CFPB Director expressed his 

view that the FDIC Board had approved the 

RFI/C. 

On December 9, 2021, the CFPB released 

the RFI/C on its website, and the FDIC 

issued a statement that the document was 

not approved for publication because there 

was no valid vote by the FDIC Board 

according to longstanding FDIC internal 

policies and procedures.51 At a Board 

meeting on December 14, 2021, the CFPB 

Director (as a member of the FDIC Board) 

moved that the written vote on the RFI/C be 

included in the minutes of the Board 

meeting, and the Chair ruled that the motion 

was not in order. 

The dispute about the authorities of the 

FDIC Chair and individual Board members 

to bring items before the FDIC Board for a 

vote creates uncertainty about the 

organizational governance and structure of 

the FDIC. The FDIC should clarify and 

resolve the requirements for consideration 

of actions by the FDIC Board of Directors. 

Incorporating Risks into the FDIC’s 

Enterprise Risk Management 

Program 

The FDIC faces an array of risks that should 

be identified, assessed, and considered by 

the FDIC Board and senior FDIC officials. 

Enterprise Risk Management (ERM) is an 

essential component of governance that 

provides an entity-wide view of the full 

spectrum of internal and external risks 

facing an organization. Effective ERM 

provides information to Board members and 

senior FDIC officials, so that they can 

allocate resources appropriately, effectively 

prioritize and proactively manage risk, 

improve the flow of risk information, and 

work towards achieving the FDIC’s mission. 

ERM assists Federal agencies in the 

identification, assessment, and mitigation of 

external and internal risks. On May 25, 

2021, the FDIC Board delegated ERM 

responsibilities to its Audit Committee, 

which now oversees the ERM program and 

is responsible for ensuring that relevant 

risks are identified and addressed. It is not 

clear or transparent the processes by which 

the FDIC Audit Committee will consider the 

range of risks facing the enterprise, and 

debate and deliberate over the proposed 

risk ratings. The Audit Committee oversees 

and has responsibility for the agency’s ERM 

activities. 

In our OIG evaluation, The FDIC’s 

Implementation of Enterprise Risk 

Management (July 2020), we determined 

that ERM was not fully implemented at the 

FDIC, and, therefore, proper execution of 

program activities, roles, and responsibilities 

had yet to take place. Without a mature 

governance structure over ERM, the FDIC 

could not be sure that ERM would be fully 

integrated into the Agency and its culture, 

and the FDIC would develop a 

comprehensive portfolio view of risk at the 

Agency. The FDIC addressed the eight 

recommendations from our OIG report. In 

2021, the FDIC conducted a survey of 

Agency personnel about the ERM program; 

the response rate was 22 percent. The 

FDIC survey noted that less than half of 

survey participants were familiar with the 

FDIC’s ERM program, including the FDIC’s 

Risk Appetite Statement and how to use it. 

Further, since the issuance of our report, we 

have found that the FDIC’s ERM process 

has not identified certain existing risks and 

not fully assessed the potential impact of 

other risks, for example: 

• Personnel Security and

Suitability. In our report, The

FDIC’s Personnel Security and

Suitability Program (January 2021),
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we found that the FDIC’s ERM 

program did not fully reflect the 

extent of risks associated with 

untimely, incomplete, or inadequate 

background investigations. 

• Critical Functions in Contracts. In

our report, Critical Functions in FDIC

Contracts (March 2021), we found

that the FDIC’s ERM Risk Inventory

did not recognize procured Critical

Functions as a separate and distinct

risk, or as an analytical factor in

determining inherent or residual risk

associated with cybersecurity and

privacy support services. A Critical

Function is an activity that is

necessary for an agency to

effectively perform and control its

mission and operations.

• Climate-Related Financial Risk.

The ERM program has not

considered or addressed the risks

associated with climate change, as

identified in the FSOC Climate

Report (referenced in the Crisis

Readiness Challenge).

• Supply Chain Risk. The FDIC has

not established an Agency-wide

consideration of supply chain risk.

As a result, the FDIC’s ERM does

not capture certain supply chain

risks that FDIC Divisions and Offices

face, nor does it capture supply

chain risks associated with non-IT

products and services.

We also note that the FDIC’s Enterprise 

Risk Management program has not 

considered the risks associated with the 

requirements for Board of Directors’ 

consideration and approval of motions 

(discussed above), nor the risks related to 

the Agency’s review of bank mergers noted 

in the RFI/C submitted and approved by the 

three FDIC Directors.

52 These risk factors 

are not part of the FDIC’s Risk Inventory nor 

its Risk Profile. 

Explaining Whether the FDIC Will 

Follow Certain Executive Branch 

Guidance 

The Executive Branch regularly issues 

policies and guidance for Federal agencies, 

in the form of Executive Orders, Presidential 

Directives, OMB Circulars and Memoranda, 

and National Institute of Standards and 

Technology (NIST) guidance. Such policies 

and guidance often address risks in 

operational areas such as information 

technology, security, privacy, contracting, 

and risk management. The policies and 

guidance provide best practices that 

Executive Branch agencies must implement 

to mitigate operational risks. In many 

cases, independent agencies such as the 

FDIC are not required to follow such 

requirements; however, the FDIC has, in a 

number of cases, chosen to voluntarily 

comply with all, or portions of, certain 

policies and guidance. 

It is not clear under what circumstances and 

which specific portions or provisions of the 

policies or guidance are to be followed. 

Ambiguity in the FDIC’s determinations and 

lack of clarity may result in inconsistencies 

with other agencies (including other bank 

regulators) and may cause uncertainty and 

confusion among FDIC employees in the 

application of such policies and guidance. 

In addition, such determinations may not 

seem clear or transparent to the American 

public. 

For example, in our OIG report, 

Whistleblower Rights and Protections for 

FDIC Contractors (January 2022), we found 

that the FDIC Division of Administration’s 

(DOA) Acquisition Services Branch 

voluntarily adopted some of the Federal 

whistleblower provisions and requirements 

for insertion into its contracts. However, the 

FDIC’s Legal Division, under its separately 

delegated contracting authority, did not 

operate consistently with the FDIC’s DOA. 

The FDIC Legal Division had neither 

adopted any whistleblower rights notification 
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provisions for contractors nor included any 

whistleblower clauses in its contracts. 

Further, we found that FDIC procedures and 

processes were not aligned with laws, 

regulations, and policies designed to ensure 

notice to contractor and subcontractor 

employees about their whistleblower rights 

and protections. 

The FDIC should clearly articulate and 

explain its determinations regarding whether 

or not to follow Executive Branch policies 

and guidance, and it should be transparent 

under what circumstances and which 

specific portions or provisions of the policies 

or guidance are to be followed. Consistent 

analysis and application, and centralized 

documentation of these decisions would 

enhance the confidence and transparency 

of FDIC operations, programs, and 

functions. 

Further, in our recent OIG reports, we found 

that when the FDIC chooses not to 

implement certain Executive Branch 

policies, its programs incur risks that these 

policies were intended and designed to 

address or mitigate. For example: 

• Contracting: The OMB issued

Policy Letter 11-01 to provide

Federal agencies with guidance on

managing contracts for the

performance of Critical Functions.53 

The FDIC’s Legal Division

concluded that the Policy Letter did

not apply to the FDIC, but it may be

used for guidance. In our OIG

evaluation, Critical Functions in

FDIC Contracts (March 2021), we

found that the FDIC did not have

policies and procedures for

identifying Critical Functions in its

contracts, as recommended by the

OMB Policy Letter. Without these

best practices in place, the FDIC

cannot be assured that it will provide

sufficient management oversight of

contractors performing Critical

Functions.

• Enterprise Risk Management

(ERM): In 2016, in an effort to

modernize existing agency risk

management efforts across the

Federal Government, the OMB

updated its Circular A-123.54 The

FDIC took the position that it was not

required to follow OMB Circular A123. As noted earlier, in our OIG

evaluation, The FDIC’s

Implementation of Enterprise Risk

Management (July 2020), we found

that the FDIC did not fully implement

its ERM program in accordance with

OMB criteria. Specifically, the FDIC

did not establish a clear governance

structure, and clearly define

authorities, roles, and

responsibilities related to ERM.

Further, the FDIC did not clearly

define the roles, responsibilities, and

processes of the committees and

groups involved in ERM.

• Supply Chain Risk: In our OIG

report on The FDIC’s Information

Security Program—2021 (October

2021), the FDIC stated that the NIST

publications for supply chain risk

management were not binding on

the FDIC, but that the FDIC chose to

follow the guidance. NIST guidance

includes a Risk Management

Framework for supply chains, and

the framework is purposefully

designed to be technology neutral so

that the methodology can be applied

to any type of information system

without modification.55 However, the

FDIC’s Supply Chain Risk

Management (SCRM) Directive

limits the applicability of the NIST

framework solely to IT systems,

products, and services. As a result,

non-IT purchases are not assessed

against the NIST framework for

supply chain risks.
• Rulemaking Cost Benefit

Analysis: In our report, Cost

Benefit Analysis Process for

Rulemaking (2021), we found that

the FDIC did not follow identified

best practices from Executive

Orders, GAO, and other Federal

agencies to establish and document

a process for determining when to

perform cost benefit analyses and

how the analyses should be

conducted.

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Addressing Recurring 

Recommendations 

The FDIC Board and senior officials should 

also ensure that program weaknesses are 

promptly resolved and remediated. The 

FDIC has encountered several examples in 

which the OIG has made repeated 

recommendations to the FDIC in order to 

improve its programs and operations. 

Unaddressed program improvement 

recommendations increase the likelihood 

that the underlying vulnerabilities or 

deficiencies will continue or recur. To 

mitigate these risks, these 

recommendations should be addressed by 

the FDIC in a timely manner. 

We have identified repeated breakdowns in 

controls, for example: 

• Incomplete contract files. We

made recommendations to address

incomplete contract files in two

reports issued between 2018 and

2019. In our OIG reviews Payments

to Pragmatics (December 2018) and

Contract Oversight Management

(October 2019), we found that FDIC

personnel did not retain appropriate

contract documentation in the

FDIC’s contract repository known as

“CE File.” Without this

documentation, the FDIC faces

challenges in monitoring and

enforcing contracts in the event of

contractor noncompliance. Further,

the FDIC may incur additional costs 

to recover or replace lost 

documentation, as such processes 

may require labor-intensive manual 

searches through hard-copy 

documentation. 

• Confidentiality Agreements for

Contractors. We identified missing

or inadequate Confidentiality

Agreements in three reports

between 2017 and 2022. In our OIG

reviews Controls over Separating

Personnel’s Access to Sensitive

Information (September 2017),

Security of Critical Building Services

at FDIC-owned Buildings (March

2021), and Whistleblower Rights and

Protections for FDIC Contractors

(January 2022), we found that the

FDIC either did not obtain

Confidentiality Agreements from its

contractors and contract personnel

as required by the contracts, or did

not use the current up-to-date

Confidentiality Agreement form.

Without the required Confidentiality

Agreements, the FDIC has reduced

assurance that contractors and

subcontractors will protect sensitive

FDIC information.

• Cybersecurity. In each of our past

four annual reviews of FDIC

information security (2018 through

2021), we reported weaknesses

related to the FDIC’s management

of Administrative Accounts.56 

Weaknesses in the FDIC’s

processes for managing

Administrative Accounts increase

the risk of unauthorized activity,

such as individuals accessing,

modifying, deleting, or exfiltrating

sensitive information. We also found

that the FDIC continues to have

overdue and unaddressed

information security control

deficiencies. Without consistently

addressing control deficiencies in a

timely manner, FDIC data is
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vulnerable to security exploits from 

unmitigated threats. 

• Personnel Security and Suitability

Program. In our OIG evaluation,

The FDIC’s Personnel Security and

Suitability Program (PSSP)(January

2021), we found several

deficiencies that were similar to

those identified in previous reports --

including our OIG evaluation of the

FDIC’s PSSP conducted 6 years

earlier in 2014.

57 Specifically, a

number of issues had not been

corrected, including:

o Completing preliminary

background investigations

within allowed timeframes;

o Keeping records of

background investigation

documentation;

o Ensuring that background

investigation levels match an

individual’s position risk; and

o Ensuring the reliability of

background investigation

data in FDIC systems.

The FDIC should ensure that the Agency 

addresses programmatic weaknesses in a 

timely manner. Absent correction, these 

weaknesses continue to inhibit program 

performance and expose FDIC information, 

systems, and personnel to vulnerabilities. 

Ensuring Clarity and Consistency 

of FDIC Policies and Alignment 

with Other Regulators 

FDIC internal guidance to its personnel 

should be clearly defined and aligned, as 

appropriate, with other financial regulators. 

Without clear guidance, the FDIC cannot 

ensure that its personnel will consistently 

apply FDIC policies in a coherent, Agencywide manner. Further, similarly-situated 

banks may be treated differently as FDIC 

guidance may be applied inconsistently or in 

conflict with guidance from other regulators. 

In our OIG evaluation, Termination of Bank 

Secrecy Act/Anti-Money Laundering 

Consent Orders (BSA/AML) (December 

2021), we found that the FDIC and the 

Federal Reserve Board used different 

guidance to assess whether to terminate 

BSA/AML Consent Orders. As a result, for 

one of our sampled Consent Orders, the 

FDIC and the Federal Reserve Board 

assessed similar facts about the bank and 

its holding company, but came to different 

conclusions regarding the timing for 

terminating their respective BSA/AML 

Consent Orders. The Federal Reserve 

Board maintained its Consent Order longer 

than the FDIC, while the FDIC terminated its 

Order and included uncorrected provisions 

in an informal enforcement action. The 

FDIC should align its termination criteria 

with other financial regulators, so that FDICsupervised banks are treated similarly to 

other regulated banks. 

We also found that FDIC guidance did not 

address how Regional Office personnel 

should apply key policy terms to determine 

whether to terminate a Consent Order. For 

4 of 10 sampled Consent Order 

Terminations, FDIC guidance did not 

address how to apply the terms “substantial 

compliance” and “partially met.” As a result, 

the FDIC could not be certain that these 

four Consent Orders were terminated using 

a consistent interpretation of these terms. 

The term, “partially met,” provides extremely 

wide latitude to terminate a Consent Order 

when any portion of it is met. The FDIC 

should ensure consistent treatment of FDICsupervised banks regardless of the bank’s 

geographical location. 

Further, Consent Order termination 

decisions were not centrally monitored. 

Monitoring decisions across Regional 

Offices would serve as an important internal 

control to identify the potential for 

inconsistent application of Consent Order 

termination guidance across Regional 

Offices. We made 10 recommendations to 

enhance the FDIC’s guidance regarding 

termination of its Consent Orders, and 
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related processes, monitoring, and 

documentation. 

Enhancing FDIC Rulemaking 

FDIC rulemaking should be a transparent 

process that analyzes the need for safety 

and soundness regulation and the 

compliance burden placed on banks. A 

foundational component of rulemaking is the 

FDIC’s access to reliable information to 

measure a regulation’s costs and benefits. 

Quantifying both the costs and benefits of 

significant financial regulations can be 

challenging, and it often may be imprecise 

and unreliable.58 For example, performing 

such analysis can be difficult, because it 

involves theory, modeling, statistical 

analysis, and other tools to predict future 

outcomes based on certain assumptions.59 

In our OIG review, Cost Benefit Analysis 

Process for Rulemaking (February 2020), 

we found that the FDIC had not established 

and documented a process to determine 

when and how to perform cost benefit 

analyses in its rulemaking process. In 

addition, the FDIC was not transparent in 

publishing (i) the reason(s) why a cost 

benefit analysis was or was not performed; 

(ii) the reason(s) for the depth of analysis

performed; (iii) the analytical scope and

methodology used; and (iv) the analysis

performed. Without transparent cost benefit

analyses, stakeholders such as financial

institutions, the public, and Congress may

not understand the FDIC’s analyses and

conclusions.

Also, we found that the FDIC did not 

perform cost benefit analyses after issuance 

of a final rule. Without performing cost 

benefit analyses of existing rules or 

establishing a formal process to proactively 

review each final rule, the FDIC may not 

identify duplicative, outdated, or overly 

burdensome rules in a timely manner. In 

addition, the FDIC may not ensure that its 

rules are effective and achieve their 

intended objectives/outcomes. 

We made five recommendations in this 

report; however, none of them have been 

implemented since the report was issued in 

February 2020. The FDIC had originally 

designated an Expected Completion Date 

for four of these recommendations as June 

30, 2021; however, the Agency has 

extended the time period for implementation 

of its corrective actions. FDIC staff 

indicated that the reason for the extension 

was to allow for the completion of the 

FDIC’s review process for a draft directive 

and accompanying staff guidance on 

regulatory analysis. 

Effective governance by the FDIC Board 

and executives ensures that the FDIC is 

prepared to meet its mission. The FDIC 

should clarify the protocols for submitting 

motions to the Board for consideration. 

Further, the FDIC’s ERM program should 

assist the FDIC Board and Agency officials 

by identifying and assessing external and 

internal threats and risks in order to adjust 

relevant policies and controls. When such 

policies and controls are found to be weak, 

the FDIC should continue to take steps to 

correct these deficiencies in a timely 

manner and ensure that corrective actions 

remain effective. The FDIC should be clear 

about whether and to what extent it adopts 

Executive Branch policies. In addition, the 

FDIC should have clear internal policies and 

procedures to ensure consistent 

implementation of FDIC programs by its 

personnel. FDIC policies should be aligned 

with other regulators, as appropriate, to 

ensure consistent treatment of banks. The 

FDIC should also ensure that the process 

for rulemaking is transparent and that rules 

are based on sound cost benefit analysis. 
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IT Secu ty at the FDIC IT Security at the FDIC 

Key Areas of Concern 

The primary areas of concern for this 

Challenge on IT Security are: 

• Improving the FDIC’s overall

information security;

• Managing the security of mobile

devices; and

• Improving security controls over the

FDIC’s critical building services.

The OIG has identified IT Security as a Top 

Challenge for the FDIC since 2018. 

On December 6, 2021, the Office of 

Management and Budget (OMB) stated that 

“[t]he United States Government continues 

to face increasingly sophisticated efforts to 

compromise Federal IT systems, 

challenging current defenses and creating 

an urgent need to evolve to a new security 

paradigm.”60 In Fiscal Year 2020, OMB 

reported that Federal agencies had suffered 

30,819 cybersecurity incidents, an 8 percent 

increase over the incidents in 2019.

61 

On November 4, 2021, the Cybersecurity & 

Infrastructure Security Agency (CISA) 

issued a Directive stating that the United 

States faces persistent and increasingly 

sophisticated malicious cyber campaigns 

that threaten the American people’s security 

and privacy.

62 The CISA Directive stated 

that the Federal Government must improve 

its efforts to protect against these 

campaigns as these vulnerabilities pose a 

significant risk to agencies and the Federal 

enterprise. 

FDIC IT systems support day-to-day 

operations of the Agency and are critical to 

the Agency’s mission. As of August 2021, 

the FDIC had 76 IT systems containing 

significant amounts of information about 

FDIC employees, supervised banks, and 

depositors. For example, the FDIC’s Failed 

Bank Data System holds nearly 2,500 

terabytes of sensitive information from over 

500 bank failures. A cyber incident at the 

FDIC could severely limit its capabilities to 

meet mission requirements, particularly 

during a crisis. In addition, cyber incidents 

could compromise sensitive business 

information and Personally Identifiable 

Information.

63 

Improving the FDIC’s Information 

Security 

In our OIG audit, The FDIC’s Information 

Security Program–2021 (October 2021), we 

found that while the FDIC had established 

and strengthened some security controls 

from the prior year, there remained several 

security control weaknesses that limited the 

effectiveness of the FDIC’s information 

security program and practices. These 

deficiencies placed the confidentiality, 

integrity, and availability of the FDIC’s 

information systems and data at risk. The 

highest risk security weaknesses noted in 

our report included: 

• High Number of Overdue and

Unaddressed High- and Moderate-Risk

Plans of Action and Milestones

(POA&M). POA&Ms are used to track the

progress of corrective actions pertaining

to security vulnerabilities. We found that

as of July 2021, 176 high- and moderaterisk POA&Ms remained unremediated.

Without consistently and timely

addressing control deficiencies, the FDIC

will continue to face an increasing backlog

of POA&Ms, leaving its data more

vulnerable to security exploits from

unmitigated threats and reducing its

overall security posture.

• Ad-Hoc Supply Chain Risk

Management Processes at the FDIC.

The FDIC has not defined processes and

procedures that support the underlying

components of its SCRM directive.

Without these SCRM processes and

procedures, the FDIC cannot be assured
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that it will accurately identify and monitor 

its supply chain risks. 

• Administrative Account Management

Needs Improvement. During 2021, we 

identified 11 additional open POA&Ms 

related to privileged user access. 

Weaknesses in the FDIC’s processes for 

managing Administrative Accounts 

increased the risk of unauthorized activity, 

such as individuals accessing, modifying, 

deleting, or exfiltrating sensitive 

information. 

• Inadequate Oversight and Monitoring

of FDIC Information Systems. Federal 

agencies must ensure that entities 

operating information systems on behalf 

of the Federal Government meet the 

same security and privacy requirements 

as Federal agencies. Historically, several 

systems, components, and services that 

should have been assessed by the FDIC 

according to these requirements were 

instead subject to a now-rescinded 

assessment methodology. As a result, 

the FDIC did not subject these systems to 

a proper risk assessment, authorization to 

operate, or ongoing monitoring. 

We made six recommendations to improve 

the IT security systems at the FDIC, in 

addition to five recommendations that 

remain from prior Financial Information 

Security Act (FISMA) reports (including one 

recommendation from our OIG report issued 

on November 2, 2016). 

Managing the Security of Mobile 

Devices 

The FDIC has issued approximately 4,700 

smartphones and tablets to its employees 

and contractor personnel. While these 

mobile devices may enhance 

communications, they also introduce the 

risk of cyber threats, such as “malware” that 

can allow an actor to exploit vulnerabilities 

on the devices; eavesdrop wireless 

communications over public networks; and 

collect and monitor data on mobile 

applications installed by users, such as the 

user’s location, contacts, and browsing 

history. 

In our OIG report, Security and 

Management of Mobile Devices (August 

2021), we found that the FDIC had not 

established or implemented effective 

controls and practices to secure and 

manage its mobile devices in three of nine 

areas assessed. FDIC policies, procedures, 

and guidance were outdated and did not 

reflect current business practices pertaining 

to mobile devices, and they did not address 

key elements promulgated by NIST. The 

FDIC policy on mobile devices was more 

than 18 years old—issued prior to the 

introduction of smartphones and tablets— 

and focused on obsolete technologies such 

as pagers. 

The FDIC policies did not address its Bring 

Your Own Device program, nor the risks 

associated with personal use of FDICfurnished mobile devices, such as non-work 

related applications, and texting, 

messaging, and video. We also found that 

FDIC employees and contractor personnel 

had downloaded non-work related 

applications, including dating services, 

shopping, sports entertainment, and movie 

streaming services. We made nine 

recommendations to strengthen the FDIC’s 

management of mobile devices. As of the 

date of this Top Challenges Report, the 

FDIC aims to implement these 

recommendations by May 2022. 

Improving Security Controls over 

Critical Building Services 

The FDIC uses building automation systems 

to monitor and control critical services at its 

facilities, such as the supply of electrical 

power, HVAC (heating, ventilation, and air 

conditioning), and water services. In our 

OIG audit, Security of Critical Building 

Services at FDIC-owned Facilities (March 

2021), we found that the FDIC security 
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controls over three information systems 

were not effective to monitor, manage, and 

help ensure the uninterrupted delivery of 

critical building services. We identified 

weak account management practices, the 

use of unsupported vendor software, and a 

lack of security oversight and monitoring. 

Such ineffective controls and practices 

increased the risk of unauthorized access to 

these three systems, which could have led 

to a disruption of the systems, corruption of 

the systems’ data, or other malicious 

activity. We made 10 recommendations to 

improve the security controls over three 

critical building systems at the FDIC and 4 

recommendations remain outstanding. 

In addition, we have ongoing work to review 

the adequacy and effectiveness of FDIC 

security controls over its wireless networks 

and its Windows Active Directory. 

The FDIC is dependent upon IT systems for 

day-to-day activities—especially during a 

banking crisis. The FDIC should ensure 

that its IT security can withstand increasing 

risks to Federal systems. Strong IT 

security is paramount to ensure that the 

FDIC can fulfill its mission and protect the 

sensitive information of bank customers and 

employees, and FDIC personnel. 
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Secu ty and P vacy at the FDIC curity and Privacy at the FDIC 

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Security and Privacy are: 

• Improving the effectiveness of the 

FDIC’s Personnel Security and 

Suitability processes; 

• Implementing management of 

Physical Security based upon risk 

assessments; 

• Sustaining a work environment free 

from discrimination, harassment, 

and retaliation; and 

• Securing sensitive and Personally 

Identifiable Information. 

The OIG has identified Security and Privacy 

as a Top Challenge for the FDIC since 

2019. 

The FDIC is responsible for the security and 

safety of approximately 5,800 employees 

and 1,600 contract personnel who work at 

92 FDIC facilities throughout the country. 

The FDIC is also the custodian of 76 IT 

systems and a large volume of hard-copy 

records on premises and in archival 

storage. 

Improving the Effectiveness of the 

FDIC’s Personnel Security and 

Suitability Processes 

An important step in mitigating risk to the 

FDIC is ensuring that employees and 

contractors undergo appropriate security 

and suitability screening. In March 2021, 

the GAO stated that “[a] high-quality 

personnel security clearance process 

minimizes the risks of unauthorized 

disclosures of classified information and 

helps ensure that information about 

individuals with criminal histories or other 

questionable behavior is identified and 

assessed.”64 

The FDIC should be assured that its 

employees and contractors are properly 

screened and investigated before being 

granted access to systems and entrusted 

with sensitive, confidential, or, in some 

cases, classified information. In our OIG 

evaluation, The FDIC’s Personnel Security 

and Suitability Program (PSSP) (January 

2021), we concluded that the FDIC’s PSSP 

program was not fully effective in ensuring 

the timely completion of preliminary 

suitability screenings, background 

investigations commensurate with position 

risk designations, and re-investigations. We 

found that four contractor employees with 

unfavorable background investigation 

adjudications continued to work at the FDIC 

for periods ranging from nearly 8 months to 

5 years (until we notified the FDIC about 

these cases). Further, the FDIC did not 

remove seven contractor personnel with 

unfavorable adjudications in a timely 

manner, did not follow its Insider Threat 

protocols, and conducted limited risk 

assessments for contractors with 

unfavorable adjudications. 

The FDIC also did not initiate numerous 

required periodic reinvestigations in a timely 

manner. In addition, data on contractor 

position risks were unreliable, employee 

background investigations were often not 

commensurate with position risk, FDIC 

personnel security files were frequently 

missing some preliminary background 

investigation data, and the FDIC was not 

meeting its goals for completing preliminary 

background investigations within a specified 

timeframe. The FDIC took urgent action to 

address our recommendations in this report. 

The FDIC should sustain controls over its 

personnel security programs as it hires 

employees and contractors. 
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Implementing Physical Security 

Based on Risks 

The FDIC should ensure that its facilities 

have appropriate physical security controls 

in place to safeguard personnel. According 

to the Congressional Research Service, 

Federal facilities and employees, 

contractors, and visitors to such facilities 

“face a variety of threats, including illegal 

weapon and explosive possession, robbery, 

riots, civil disturbances, homicide, and 

arson.”65 

The FDIC maintains 92 leased or owned 

facilities across the country and is in the 

process of assessing facility needs as it 

transitions to a hybrid workplace. In our 

OIG evaluation, The FDIC’s Physical 

Security Risk Management Process (April 

2019), we concluded that the FDIC had not 

established an effective physical security 

risk management process to ensure that it 

met required standards and guidelines. We 

found that the FDIC frequently did not 

document its decisions regarding facility 

security risks and countermeasures, and 

such decisions were not guided by defined 

policies or procedures. Without 

documentation of these decisions, FDIC 

executives and oversight bodies were not 

able to fully consider and review the 

rationale for these determinations. 

We also found that the FDIC did not 

conduct key activities in a timely or thorough 

manner for determining facility risk level, 

assessing security protections in the form of 

countermeasures, mitigating and accepting 

risk, and measuring program effectiveness. 

For example, for one of its medium-risk 

facilities, the FDIC began, but did not 

complete, an assessment more than 21⁄2 

years after the FDIC occupied the leased 

space. Collectively, these weaknesses 

limited the FDIC’s assurance that it met 

Federal standards for physical security over 

its facilities. We made nine 

recommendations to address the 

weaknesses in the FDIC’s physical security 

risk management process, and the FDIC 

has implemented them. The FDIC should 

continue to monitor its physical security 

program controls as threats change and as 

the FDIC reviews and modifies its space 

needs for buildings and facilities. 

Sustaining a Work Environment 

Free from Discrimination, 

Harassment, and Retaliation 

The FDIC Chair has stated that, “[t]he FDIC 

does not tolerate discrimination, harassment 

(including sexual harassment), or retaliation, 

and every allegation of these unlawful 

behaviors is taken seriously. FDIC 

managers and supervisors must address 

harassment allegations immediately and 

appropriately.”66 Sexual harassment 

negatively impacts workplace culture. It can 

undermine employee morale and can cause 

employee engagement and productivity to 

decline. According to a survey conducted 

by Deloitte (March 2019), 52 percent of 

women experienced some form of 

harassment within the last 5 years. Further, 

a report from Project Include (March 2021) 

found that 26 percent of respondents 

experienced an increase in gender-based 

harassment during the pandemic. On 

December 21, 2021, the Ranking Member 

of the Senate Committee on Banking, 

Housing and Urban Affairs noted that 

“federal employees at multiple agencies 

covered by the jurisdiction [of the Senate 

Banking Committee] have alleged 

experiencing harassment, discrimination, or 

other forms of abuse by agency officials in 

recent months.”67 

In our OIG evaluation, Preventing and 

Addressing Sexual Harassment (July 2020), 

we found that the FDIC had not developed a 

sexual harassment prevention program that 

fully aligned with the five core principles 

promoted by the Equal Employment 

Opportunity Commission. As part of our 

work, in April 2019, we conducted a survey 

of FDIC employees that indicated 

approximately 8 percent of FDIC 
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respondents (191 of 2,376) had 

experienced sexual harassment at the FDIC 

during the period January 2015 to 

April 2019. This figure was similar to the 

results of a survey previously conducted by 

the Merit Systems Protection Board (MSPB) 

based on an earlier timeframe; the 

Government-wide average in this MSPB 

survey was 14 percent. Although 191 FDIC 

respondents reportedly experienced sexual 

harassment, the FDIC received only 12 

reported sexual harassment allegations 

during the relevant timeframe. 

Our survey further indicated that 38 percent 

of FDIC respondents who stated they had 

experienced sexual harassment said that 

they did not report the incident(s) for “fear of 

retaliation,” and nearly 40 percent of FDIC 

respondents did not know, or were unsure, 

how to report allegations of sexual 

harassment. We recommended that the 

FDIC enhance its policies, procedures, and 

training to facilitate the reporting of sexual 

harassment allegations and address 

reported allegations in a prompt and 

effective manner. The FDIC has addressed 

the recommendations in this report. The 

FDIC should continue to ensure that it 

maintains an effective program to combat 

sexual harassment. 

Securing Sensitive and Personally 

Identifiable Information 

The FDIC should have effective processes 

to manage, monitor, and safeguard its 

information and ensure the safety and 

privacy of the records it keeps. FDIC 

information includes, for example, sensitive 

information about banks and Personally 

Identifiable Information (PII) and Social 

Security Numbers of employees, 

contractors, bank management, and bank 

deposit holders. 

Recently, the GAO reviewed the handling of 

PII by five Federal financial regulators, 

including the FDIC.

68 With regard to the 

FDIC, the GAO found that the FDIC “did not 

establish agency-wide metrics to monitor 

privacy controls.” Without such controls, PII 

held by the FDIC may be at increased risk 

of compromise. 

In our OIG audit, The FDIC’s Privacy 

Program (December 2019), we found that 

the FDIC had not established an effective 

privacy program to manage and monitor PII. 

The FDIC’s controls and practices for its 

Privacy Program did not comply with four 

relevant privacy laws and/or OMB policy 

and guidance. Specifically, the FDIC did 

not: 

• Fully integrate privacy 

considerations into its risk 

management framework designed to 

categorize information systems, 

establish system privacy plans, and 

select and continuously monitor 

system privacy controls; 

• Adequately define the 

responsibilities of the Deputy Chief 

Privacy Officer or implement 

Records and Information 

Management Unit responsibilities for 

supporting the Privacy Program; 

• Effectively manage or secure PII 

stored in network shared drives and 

in hard copy, or dispose of PII within 

established timeframes; and 

• Ensure that Privacy Impact 

Assessments were always 

completed, monitored, and retired in 

a timely manner. 

These deficiencies increased the risk of PII 

loss, theft, and unauthorized access or 

disclosure, which could lead to identity theft 

or other forms of consumer fraud against 

individuals. We made 14 recommendations 

designed to enhance the effectiveness of 

the FDIC’s Privacy Program and practices. 

As of the date of this Top Challenges 

Report, actions to remediate three 
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recommendations remain unimplemented 

since the issuance of our report in 

December 2019, including those related to: 

• Developing and approving privacy 

plans for all information systems; 

• Updating policies and procedures for 

the current organizational structure 

of the Privacy Program; and 

• Developing and implementing 

controls to ensure that PII is stored 

in networks and hard copy in 

accordance with laws, regulations, 

policies, and guidelines. 

Further, in our OIG audit, The FDIC’s 

Information Security Program – 2019 

(October 2019), we found that the FDIC had 

not adequately controlled access to 

sensitive information and PII stored in hard 

copy. For example, we identified instances 

in which sensitive information stored on 

internal network shared drives was not 

restricted to authorized users. We also 

conducted walk-throughs of selected FDIC 

facilities and found significant quantities of 

sensitive hard-copy information stored in 

unlocked filing cabinets and boxes in 

building hallways. We recommended that 

employees and contractor personnel 

properly safeguard sensitive electronic and 

hardcopy information. 

The security and safety of FDIC personnel, 

facilities, and information is critical to its 

mission and operations. The FDIC can 

continue to enhance protection in these 

areas through improvements to its programs 

to assess personnel suitability, safeguard 

facilities, mitigate workplace sexual 

harassment, and ensure the security and 

privacy of information held in custody by 

the FDIC. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDICES 

The FDIC’s Collection, Analysis, and Use of Data 

Key Areas of Concern the FDIC, understand and improve program 

The primary areas of concern for this 

Challenge on Collection, Analysis, and Use 

of Data are: 

• E stablishing processes to share 

threat information ;

• E nsuring reliable data for FDIC

decision-making and ;

• Managing the financial and 

economic impact of the pandemic. 

The OIG has identified Sharing of Threat 

Information as a Top Challenge for the 

FDIC since 2018. 

performance.70 Through data-driven 

decision-making, regulators can use data to 

inform their decision-making processes and 

validate a course of action.71 Data can also 

be used as an input for modeling and to 

identify trends. Such modeling can allow 

Government agencies to prevent problems 

rather than react to them.72 For the FDIC, 

such models may allow the FDIC to forecast 

financial risks to the banking sector and 

adj ust supervisory strategies, staffing, and 

budgeting accordingly. 

Establishing Processes to Share The U.S. Government collects and gathers 

significant volumes of data and information 

on threats facing the financial and banking 

sectors. This threat data and information 

from across the Federal Government may 

Threat Information 

As shown in Figure 2, the GAO recognized 

assist the FDIC in its mission to examine 

and inform banks, 

that numerous Federal Government 

agencies hold information relevant to banks 

implement supervisory 

strategies, make policy 

determinations, allocate 

resources, and ensure U.S. 

financial stability. 

The FSOC 2021 Annual 

Report recognized the 

critical importance of sharing 

threat information with the 

Financial Services Sector 

and among Federal 

Government agencies. The 

OCC also encouraged 

monitoring of information 

provided by law enforcement 

and international 

organizations regarding 

“how criminals adapt scams 

and money-laundering 

techniques to exploit new 

vulnerabilities created by the 

pandemic.”69 

In addition, data can help 

Federal agencies, such as 

Figure 2: Sources of T hreat I nformation for Financial I nstitutions 

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APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and the banking sector. In Executive Order 

14028, Improving the Nation’s 

Cybersecurity (May 12, 2021), the 

Administration encouraged reducing 

barriers to sharing threat information, 

specifically among Federal agencies and 

service providers. 

The FDIC, along with its Government 

partners, collects and queries threat 

information contained within U.S. 

Government databases and repositories. 

The FDIC should acquire, analyze, and 

disseminate threat information to inform 

senior FDIC officials and decision-makers, 

FDIC examiners and Regional personnel, its 

supervisory program officials, and banks.73 

In our OIG audit, Sharing of Threat 

Information to Guide the Supervision of 

Financial Institutions (January 2022), we 

found that the FDIC did not establish 

effective processes to govern its sharing of 

threat information. Specifically, the FDIC 

did not establish appropriate governance 

through a written governance structure and 

complete, approve, and implement a 

governance Charter to establish a common 

understanding of the role for its Threat 

Information Sharing program or define an 

overall strategy and requirements for it. 

Further, the FDIC did not develop goals, 

objectives, or measures to guide the 

performance of its Intelligence Support 

Program. The FDIC also did not establish 

adequate policies and procedures to define 

roles and responsibilities for key 

stakeholders involved in the threat 

information-sharing program and activities 

or fully consider program risks in its ERM 

process. 

We also identified gaps in each of the four 

component functions of Threat Information 

Sharing: 

• Acquisition. The FDIC did not 

develop written procedures for 

determining its threat information 

requirements. As a result, the FDIC 

has limited assurance that it will 

acquire all relevant threat 

information to support its business 

operations and programs. 

• Analysis. The FDIC did not 

establish procedures to guide its 

analysis of threat information. 

Absent such procedures, the FDIC 

relied solely on the discretionary 

judgment of certain individuals to 

determine the extent to which threat 

information should be analyzed to 

support FDIC business needs and 

the supervision of financial 

institutions. 

• Dissemination. The FDIC did not 

develop procedures for 

disseminating threat information. 

Absent such procedures, decisions 

regarding what to disseminate, to 

whom, and when, are left solely to 

the discretion of individuals, which 

could lead to inconsistent or 

untimely communications. The 

FDIC had not established an 

infrastructure that would allow for 

secure handling of sensitive 

information, including transmission, 

storage, and disposition of such 

information. 

• Feedback. The FDIC did not 

establish a procedure to obtain 

feedback from recipients of threat 

information to assess its utility and 

effectiveness. Such structured 

feedback could provide valuable 

information regarding the extent to 

which such threat information is 

timely and actionable, and FDIC 

personnel use threat information. 

We also found numerous gaps in the FDIC’s 

management of threat information sharing, 

including: Not having backup personnel for 

its Senior Intelligence Officer (SIO) or plans 

for an absence or departure; Not 

establishing minimum training requirements 

for the SIO position; Not obtaining required 
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security clearance for certain senior FDIC 

officials; and Not properly categorizing 

unclassified threat information. 

We made 25 recommendations to the FDIC 

to improve its processes for sharing threat 

information. We have additional work 

planned to assess the FDIC’s sharing of 

threat information with its supervised banks 

and the banking sector. 

Ensuring Reliable Data for FDIC 

Decision-Making 

Data is a key input into the FDIC’s decisionmaking processes. The FDIC Board and 

senior FDIC officials utilize various data sets 

to assess program performance, whether 

FDIC programs are meeting established 

goals, or whether goals or data collection 

should be modified. Incorrect, incomplete, 

and otherwise faulty data can lead to 

ineffective decision-making especially when 

data is the basis for policy determinations. 

Therefore, it is critical that the FDIC support 

and maintain the integrity of its data 

systems. 

We found deficiencies in data reliability, 

collection, and analysis in a number of 

recent OIG reviews, for example: 

• Errors in Examination Completion 

and Mailing Dates. In our OIG 

evaluation, Reliability of Data in the 

FDIC Virtual Supervisory Information 

on the Net System (ViSION System) 

(November 2021), we found that the 

FDIC’s risk assessment used for the 

ViSION system data had not been 

reassessed or updated in over a 

decade, since 2009. Also, we found 

that of the four key data elements 

we tested in the FDIC’s ViSION 

system, two were reliable and two 

were not reliable.74 The unreliable 

data included recorded dates for the 

completion of bank examinations 

and mailing of bank examination 

reports. Errors in either date 

increase the risk of inaccurate 

reporting of examination 

performance metrics to FDIC 

management and the public. We 

made six recommendations to the 

FDIC to improve ViSION data 

reliability. 

• Exclusion of Data for Government 

Reporting. In our OIG audit, 

FDIC’s Compliance under the Digital 

Accountability and Transparency Act 

of 2014 (November 2021), we found 

that the FDIC’s submission of 

financial and award data excluded 

information for the Federal Savings 

and Loan Insurance Corporation 

Resolution Fund (FRF) and the 

Resolution Trust Corporation (RTC). 

As a result, obligation and outlay 

amounts for the FRF and RTC were 

not available for display on the 

Government website, 

USASpending.gov. We made three 

recommendations to clarify FDIC 

data reporting. 

• Unreliable Background

Investigation Data. We found FDIC 

data on employee and contractor 

background investigations was often 

not reliable. In our OIG evaluation, 

The FDIC’s Personnel Security and 

Suitability Program (January 2021), 

we found that contractor position risk 

levels recorded in FDIC systems 

were unreliable. As a result, the 

FDIC could not determine whether 

these contractors received 

background investigations 

commensurate with their positions. 

We also found that FDIC systems 

were missing data for employee and 

contractor preliminary background 

investigation completion dates. 

• Incorrect BSA Reporting to the

Board and other Agencies. In our 

OIG evaluation, Termination of Bank 

Secrecy Act/Anti-Money Laundering 

Consent Orders (December 2021), 
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we found that the FDIC did not 

consistently track Consent Order 

termination data in its system of 

record. As a result, the FDIC 

provided nine incorrect reports to the 

FDIC Board of Directors concerning 

enforcement actions; and did not 

report three BSA/AML Consent 

Order terminations in a quarterly 

report to the Financial Crimes 

Enforcement Network (FinCEN) in 

the Department of the Treasury. 

• Analysis of Collected Data: In our 

OIG memorandum, The FDIC’s 

Management of Employee Talent 

(September 2021), we found that the 

FDIC did not have a process for 

collecting and analyzing the various 

types of data that can be used to 

assess employee retention across 

the Agency as part of its talent 

management strategy. Specifically, 

the FDIC did not have a systematic 

process to holistically capture and 

analyze data, and to ensure that the 

information flowed to the Divisions 

and Offices. Such a process would 

help the FDIC develop a coherent 

strategy for managing retention 

activities throughout the Agency, 

provide an Agency-wide view of the 

progression and movements of the 

FDIC workforce, and provide helpful 

insights on employees’ decisions to 

stay or separate. 

Timely and reliable information assists the 

FDIC in mitigating risks and supports datadriven and transparent decision-making. In 

addition, threat information from across the 

Federal Government may assist in 

examining and informing banks, 

implementing supervisory approaches, 

making policy determinations, allocating 

resources, and ensuring the stability of the 

financial system. In addition, reliable and 

accurate program data allows the FDIC 

Board and senior management to measure 

and assess the effectiveness of FDIC 

programs and to support decision-making. 
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Cont cting and pply Chain Management

at the FDIC

Contra Sucting and Supply Chain Management 

at the FDIC 

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Contracting and Supply Chain 

Management are: 

• Improving the FDIC’s contract 

management process; 

• Managing risks associated with the 

FDIC’s supply chain; and 

• Ensuring whistleblower rights and 

protection notices for contractor 

personnel. 

The OIG has identified Contracting as a Top 

Challenge for the FDIC since 2018. 

According to the FDIC’s November 2021 

Awards Summary Report, the FDIC issued 

483 contract actions for total award 

amounts of over $2 billion. As shown in 

Figure 3, FDIC contract award amounts 

doubled in 2021 when compared to 2020 

($1.025 billion) and 2019 ($994 million). 

Figure 3: FDIC Contracts Total Award 

Amounts

 $2,500,000,000

 $2,000,000,000

 $1,500,000,000

 $1,000,000,000

 $500,000,000

 $-

Year 2019 Year 2020 Year 2021 

Source: FDIC Awards Summary Report (November 2021) 

The FDIC should have strong oversight of 

its contracts. Contract oversight includes 

activities such as monitoring and validating 

invoices prior to payment, approving 

contract deliverables for goods and 

services, monitoring contractor activities 

against contractual timelines, and ensuring 

contractors comply with required security 

and confidentiality requirements. 

Improving the FDIC’s Contract 

Management Process 

In the most recent audit of the FDIC’s 

financial statements in 2021, the GAO 

identified 10 deficiencies “related to 

contract-payment review processes that 

collectively represent a significant deficiency 

in FDIC’s internal control over financial 

reporting.” In addition, the GAO noted five 

deficiencies in the 2020 financial statement 

report. The GAO concluded that the “FDIC 

cannot reasonably assure internal controls 

over contract payments are operating 

effectively, which increases the risks of 

improper payments and financial statement 

misstatements.”75 

We have also conducted a number of 

reviews that found weaknesses in FDIC 

contract oversight management. In our OIG 

evaluation, Contract Oversight Management 

(October 2019), we concluded that the 

FDIC needed to strengthen its contract 

oversight management, particularly in terms 

of its information system and contract 

documentation. We determined that the 

FDIC’s contracting management information 

system had limited data and reporting 

capabilities for Agency-wide oversight of its 

contract portfolio. We found that the FDIC 

was overseeing acquisitions on a contractby-contract basis rather than on a portfolio 

basis and did not have an effective 

contracting management information 

system to readily gather, analyze, and 

report portfolio-wide contract information 

across the Agency. 

As a result, FDIC Board Members and other 

senior management officials were not 

provided with a portfolio-wide view or the 

ability to analyze historical contracting 

trends across the portfolio, identify 

anomalies, and perform ad hoc analyses to 
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APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

identify risk or plan for future acquisitions. 

Therefore, we recommended that the FDIC 

provide enhanced contract portfolio reports 

to FDIC executives, senior management, 

and the Board of Directors. This 

recommendation remains unimplemented 

since the issuance of our report in October 

2019. The FDIC had originally designated 

an Expected Completion Date for this 

recommendation as December 31, 2020. 

Further, in our OIG evaluation, Critical 

Functions in FDIC Contracts (March 2021), 

we reviewed two existing FDIC contracts 

with Blue Canopy Group, LLC, which 

performed services in support of the FDIC’s 

information security and privacy program. 

FDIC contracts with Blue Canopy amounted 

to approximately 38.3 percent ($16.2 

million) of the FDIC’s annual operating 

expenses for Information Security ($42.3 

million) in 2019. We had previously found 

that “the FDIC hired [Blue Canopy] to 

assess certain security controls . . . for 

which the FDIC had also assigned the firm 

duties related to design and/or execution . . 

. . [T]his arrangement limited the firm’s 

independence and impaired the firm’s ability 

to conduct impartial security control 

assessments.”76 [Emphasis added.] 

We found that the FDIC did not have 

policies and procedures to identify Critical 

Functions at the Agency, nor did it 

implement any heightened contract 

monitoring activities for Critical Functions. 

Therefore, the FDIC did not identify services 

provided by Blue Canopy as Critical 

Functions. As a result, the FDIC cannot be 

assured that it will provide sufficient 

management oversight of contractors 

performing Critical Functions or supervision 

to ensure that the Agency does not lose 

control of its mission or operations. We 

made 13 recommendations to strengthen 

the FDIC’s identification and monitoring of 

contracts involving Critical Functions. As of 

the date of this Top Challenges Report, 12 

recommendations remain unimplemented. 

Further, 5 of these 12 recommendations are 

unresolved, meaning FDIC management did 

not propose acceptable corrective actions 

for these recommendations. 

Establishing an Effective Supply 

Chain Risk Management Program 

According to NIST, there are inherent risks 

associated with an agency’s supply chain 

for contracted goods and services.

77 

According to the GAO, supply chain risks 

include, for example: 

• Installation of hardware or 

software containing malicious 

logic causing significant damage by 

allowing attackers to take control of 

entire systems and read, modify, or 

delete sensitive information; disrupt 

operations; launch attacks against 

other organizations’ systems; or 

destroy systems. 

• Installation of counterfeit 

hardware or software threatening 

the integrity, trustworthiness, and 

reliability of information systems 

because they fail more often and 

more quickly, and provide an 

opportunity to insert a back door to 

give an intruder remote access. 

• Failure or disruption in the

production or distribution of

critical products, including 

manmade and natural disruptions of 

the supply of IT products critical to 

Federal agencies. 

• Reliance on a malicious or 

unqualified service provider that 

can use its access to systems and 

data to gain access to information, 

commit fraud, disrupt operations, or 

launch attacks against other 

computers or networks. 

• Installation of hardware or 

software that contains 

unintentional vulnerabilities such 

that defects in code or 
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misconfigurations can be exploited 

to gain access to information 

systems and data and disrupt 

service.78 

Organizations may have reduced visibility, 

understanding, and control of these risks 

when their vendors rely on second- and 

third-tier suppliers and service providers. 

The European Union Agency for 

Cybersecurity reported that hackers often 

focus on an entity’s vendor systems for 

supply chain attacks and predicted that 

supply chain cyberattacks would quadruple 

in 2021.79 

In our report, The FDIC’s Information 

Security Program–2021 (October 2021), the 

FDIC’s SCRM operated at a Level 1 (Ad 

Hoc). We found that the FDIC’s SCRM 

Program is still in its initial phase, and 

procedures that support the underlying 

components have not yet been defined in 

accordance with FISMA requirements. 

Specifically, the FDIC did not have 

procedures that defined: 

• How to implement its SCRM policy 

or strategy and associated baseline 

SCRM controls; 

• Obtaining assurance over external 

service providers’ compliance with 

the FDIC’s cybersecurity 

requirements, including: 

o How to identify and prioritize 

externally provided systems, 

components, and services; 

o The organizational 

requirements for 

cybersecurity and SCRM for 

externally provided systems, 

system components, and 

services; 

o The tools or methods used to 

validate that SCRM 

requirements are being met; 

o The risk-based processes for 

evaluating SCRM risks 

associated with suppliers; 

o How awareness is 

maintained over risks 

stemming from upstream 

suppliers through monitoring 

activities; and 

o The integration of its 

acquisition process and the 

use of contractual 

stipulations detailing 

appropriate SCRM measures 

for external providers. 

• Management of counterfeit 

components, including: 

o How to detect and prevent 

counterfeit components; 

o How to maintain 

configuration control over 

components being repaired 

or serviced; and 

o The process for reporting 

counterfeit components. 

Because the FDIC is a financial regulator 

and holds sensitive and nonpublic 

information, it is a potential target of 

adversaries seeking to interfere with its 

regulatory activities or obtain information for 

their own advantage. Ad hoc SCRM 

processes limit the FDIC’s ability to identify 

vulnerabilities throughout its supply chain 

consistently, and to manage and monitor 

associated risks effectively. 

Ensuring Whistleblower Rights and 

Protection Notices for Contractor 

Personnel 

FDIC contracts should contain a provision 

notifying contractors that they must provide 

their employees with information regarding 

the rights and protections for 

whistleblowers.

80 

In our OIG evaluation, Whistleblower Rights 

and Protections for FDIC Contractors 

(January 2022), we found that the FDIC had 

not aligned its procedures and processes 

with laws, regulations, and policies 

designed to ensure notice to contractor and 

subcontractor employees about their 

whistleblower rights and protections. The 

FDIC also did not always comply with the 
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APPENDICES

 

 

 

 

 

 

 

whistleblower rights notification 

requirements it established. Specifically, 

the FDIC did not incorporate the 

Whistleblower Rights Notification Clause 

into three of the nine contracts that we 

tested. Further, the FDIC’s Legal Division 

did not adopt any whistleblower rights 

notification provisions for contractors or 

include any whistleblower clauses in its 

contracts. The FDIC also did not verify that 

contractors and subcontractors notified 

employees of their whistleblower rights and 

protections. 

Without clear guidance and direction on 

where and to whom to report a violation of 

any law, rule, or regulation; gross 

mismanagement; gross waste of funds; 

abuse of authority; or a substantial and 

specific danger to public health and safety, 

FDIC contractors may not take the initiative 

to report such allegations. The FDIC should 

make it clear in its contracts that contractors 

must notify their employees that such 

whistleblower allegations may be reported 

to the FDIC OIG Hotline. We made nine 

recommendations to improve the FDIC’s 

compliance with legal requirements, 

including required contract clauses 

regarding contractor obligations to notify 

employees of whistleblower disclosure 

rights and protections. 

Contracting is an important function at the 

FDIC. The FDIC should prioritize improving 

its oversight to ensure proper contract 

monitoring, especially for Critical Functions. 

The FDIC should also mitigate supply chain 

risk by establishing a robust SCRM strategy 

that allows the Agency to assess, evaluate, 

monitor, and mitigate supply chain risk. The 

FDIC must also ensure that it has 

processes in place to advise contractors 

and subcontractors of their whistleblower 

rights and protections. 
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Human Re u es at the FDIC Human Reso rcues at the FDIC 

Key Areas of Concern 

The primary areas of concern for this 

Challenge on Human Resources are: 

• Optimizing talent management 

throughout the Agency; 

• Managing a wave of potential 

employee retirements at the FDIC; 

and 

• Ensuring diversity and inclusion 

within the FDIC workforce. 

The OIG has identified Human Resources 

as a Top Challenge at the FDIC since 2019, 

particularly with respect to potential 

retirements among FDIC personnel. 

In March 2021, the GAO continued to 

recognize strategic human capital 

management as a Government-wide area of 

high risk.

81 The GAO identified the need for 

Federal agencies to measure and address 

existing mission-critical skill gaps. A lack of 

strategic workforce planning may have 

lasting effects on the capacity of an 

agency’s workforce and its ability to fulfill its 

mission. 

Workforce planning is especially important 

as the FDIC shifts towards a hybrid work 

model that includes the potential for a 

significant increase in employees working 

remotely. On January 4, 2022, the FDIC 

reached agreement with the National 

Treasury Employees Union on new policies 

to support a hybrid work environment and 

expanded telework opportunities. New and 

enhanced skillsets may be required for this 

transition. According to the Society of 

Human Resource Management, employee 

traits such as adaptability, resiliency, selfmotivation, communication and 

collaboration have become critical for 

successful remote work.

82 

Optimizing Talent Management 

Throughout the FDIC 

As part of an agency’s talent management, 

the Office of Personnel Management (OPM) 

recommends retention strategies as a way 

to create an environment where employees 

understand and are committed to the 

mission of the organization and empowered 

to make a difference.83 The term, “talent 

management,” encompasses attracting and 

retaining talent for improving organizational 

performance, while also considering 

attrition.84 Talent management also seeks 

to address competency gaps, by 

implementing and maintaining programs to 

attract, develop, promote, and retain talent, 

particularly for mission-critical positions and 

occupations. 

In our OIG memorandum, The FDIC’s 

Management of Employee Talent 

(September 2021), we identified concerns 

with the FDIC’s management of its 

employee retention. Specifically, we found 

that the FDIC: 

• Did not have clear goals to

manage employee retention. The 

FDIC had strategic plans in place in 

March 2021 related to its 

management of employee retention. 

However, two of the three FDIC 

talent retention goals were not 

objective, quantifiable, and 

measurable. As a result, the FDIC 

could not assess its progress 

towards these goals. 

• Did not have a systematic

process for collecting and 

analyzing employee retention 

data. The FDIC did not have a 

systematic process to holistically 

capture and analyze data, and to 

ensure that the information flowed to 
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APPENDICES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

the Divisions and Offices. Such a 

process would help the FDIC 

develop a coherent strategy for 

managing retention activities 

throughout the Agency, provide an 

Agency-wide view of the progression 

and movements of the FDIC 

workforce, and provide helpful 

insights on employees’ decisions to 

stay or separate. 

• Did not establish metrics or 

indicators to measure the 

effectiveness of its retention 

activities or actions. Instead, the 

FDIC tracked its “inputs” – that is, 

the implementation status of the 

activities or actions designed to 

meet its employee retention goals. 

Thus, the FDIC could not determine 

whether or not its retention activities 

were working effectively. 

We made three recommendations to 

improve the FDIC’s management of talent at 

the Agency. 

Table: FDIC Employee Retirement Eligibility 

Managing a Wave of Potential 

Retirements at the FDIC 

The FDIC faces a wave of potential 

retirements among its workforce in the 

coming years. As shown in the Table more 

than 25 percent (1,536 individuals) of the 

FDIC workforce is currently eligible to retire. 

This figure climbs to nearly 40 percent 

(2,356 individuals) within 5 years by 2026. 

The FDIC’s retirement-eligibility rates are 

higher than the 15-percent eligibility rate last 

reported for the entire Federal 

Government.85 

The FDIC faces significant risks regarding 

retirement eligibility in key Divisions 

involved in crises readiness efforts. As 

noted in the Table, more than a third of the 

employees in four key FDIC Divisions are 

currently eligible to retire – that is, the 

Division of Resolutions and Receiverships, 

Division of Finance, Division of 

Administration, and Legal Division. Absent 

seasoned professionals from these 

Divisions with knowledge of lessons learned 

from past crises, the FDIC may not be 

sufficiently agile in executing resolution and 

receivership activities in future crises. Also, 

all FDIC Divisions have more than 18 

percent of their workforce who are currently 

eligible to retire. 

Division 2022 2023 2024 2025 2026 

DOF 45.2 47.4 52.6 55.6 55.6 

DRR 42.7 48.6 53.3 57 59.5 

LEGAL 41.7 43.8 46.7 48.9 51.6 

DOA 34.1 39.1 42.5 45.93 49 

RMS 21.6 25.1 29 32.5 35 

DIT 21.5 25.5 28.5 31.2 34.9 

CISR 18.8 24.7 28 32.8 36 

DIR 18.6 20.5 24.7 27.4 28.8 

DCP 18.3 21.1 24.4 27.7 31.1 

Overall for FDIC 25.3 29 32.6 35.9 38.8 

Source: OIG analysis of FDIC-provided retirement eligibility as of July 2021. 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 244 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition, more than 36 percent of the 

Executives and Managers at the FDIC are 

eligible to retire currently. These rates climb 

for FDIC Executives and Managers to 

nearly 60 percent by 2026. Such 

retirements may result in gaps in leadership 

positions. Leadership gaps can cause 

delayed decision-making, reduced program 

oversight, and failure to achieve Agency 

goals. 

Ensuring Diversity and Inclusion 

Within the FDIC Workforce 

On June 25, 2021, the President issued 

Executive Order 14305 on “Diversity, 

Equity, Inclusion, and Accessibility in the 

Federal Workforce.” This Executive Order 

charged Federal agencies with assessing 

the current state of diversity, equity, 

inclusion, and accessibility within their 

workforces and developing strategic plans 

to eliminate barriers faced by underserved 

employees.86 The FDIC Chair has stated 

that “[p]romoting diversity at all levels of the 

FDIC’s workforce continues to be a key 

challenge for the agency, especially the 

ability to attract, retain, and advance 

minorities and women in our bank examiner 

workforce.”87 

1 IMF, United States Financial System Stability Assessment 

(August 2020); U.S. Government Accountability Office, 

Financial Stability: Agencies Have Not Found Leveraged 

Lending to Significantly Threaten Stability but Remain 

Cautious Amid Pandemic (GAO-21-167) (December 2020). 2 The Dodd-Frank Wall Street Reform and Consumer 

Protection Act created CIGFO to provide oversight of the 

Financial Stability Oversight Council. CIGFO is chaired by 

the Inspector General of the Department of the Treasury 

and includes nine additional Inspectors General, including 

the Inspector General of the FDIC. 

3 Federal Reserve Bank of New York Staff Report, Climate 

Stress Testing (September 2021); Financial Stability 

Oversight Council, Report on Climate-Related Financial Risk 

(October 21, 2021). 

4 CNBC, These are the world’s largest banks that are 

increasing and decreasing their fossil fuel financing (April 

22, 2021). 

5 Federal Reserve Bank of New York Staff Report, Climate 

Stress Testing (September 2021); Financial Stability 

In June 2021, the FDIC reported that 68.5 

percent of all FDIC employees were White, 

16.9 percent were Black/African American, 

4.5 percent were Hispanic, 7.5 percent were 

Asian/Pacific Islander, 0.6 percent were 

American Indian/Alaska Native, and 2 

percent were two or more races.88 By 

comparison, at the end of 2020, 61.5 

percent of the Federal workforce was White, 

18.4 percent were Black, 9.4 percent were 

Hispanic, 6.9 percent were Asian/Pacific 

Islanders, 1.6 percent were Native 

American/Alaskan Native, and 1.9 percent 

were more than one race.89 The FDIC’s 

2021-23 Diversity, Equity, and Inclusion 

Strategic Plan includes prioritized actions to 

continue to promote FDIC workforce 

diversity. 

The FDIC is driven by its human resources. 

The FDIC must continue to focus on 

managing its human capital lifecycle— 

hiring, talent management, and 

retirements—under its new hybrid operating 

structure, including promoting diversity and 

inclusion throughout the FDIC workforce. 

Without diverse, dedicated, and trained 

staff, it risks falling short of achieving its 

goals. 

Oversight Council, Report on Climate-Related Financial Risk 

(October 21, 2021); FSOC, 2021 Annual Report. 6 OCC Bulletin 2021-62, Principles for Climate-Related 

Financial Risk Management for Large Banks (December 16, 

2021). 

7 Federal Reserve Bank of New York Staff Report, Climate 

Stress Testing (September 2021); Financial Stability 

Oversight Council, Report on Climate-Related Financial Risk 

(October 21, 2021). 

8 Statement by FDIC Chairman at the Financial Stability 

Oversight Council Meeting (October 21, 2021). 9 Federal Reserve Press Release, Federal Reserve Board 

announces it has formally joined the Network of Central 

Banks and Supervisors for Greening the Financial System, 

or NGFS, as a member (December 15, 2020); American 

Banker, Will FDIC, OCC follow Fed into global climate 

group? (May 18, 2021). 10 Environmental Protection Agency Press Release, EPA 

Report Shows Disproportionate Impacts of Climate Change 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 245 

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on Socially Vulnerable Populations in the United States 

(September 2, 2021). 

11 SBA, Paycheck Protection Program Report, Approvals 

through May 31, 2021. 

12 McCombs School of Business, University of Texas at 

Austin, Did FinTech Lenders Facilitate PPP Fraud? 

(December 6, 2021). 

13 Department of Justice, Justice Department Takes Action 

Against COVID-19 Fraud (March 25, 2021). 14 FDIC Regional Directors Memorandum 2020-022, 

Examination Considerations Related to the Paycheck 

Protection Program (June 22, 2020). 15 CBS News, Jerome Powell Full 60 Minutes Interview 

transcript (April 2021). 16 OCC, Semiannual Risk Perspective (Fall 2021); Board of 

Governors of the Federal Reserve System, Financial 

Stability Report (November 2021). 17 Board of Governors of the Federal Reserve System, 

Financial Stability Report (November 2021). 18 American Banker, Log4j Security Vulnerability Is a 

Double Threat to Banks (December 23, 2021). 19 Boston Consulting Group, Global Wealth 2019: 

Reigniting Radical Growth (June 2019). 20 Constella Intelligence, Financial Services Sector Exposure 

Report: 2018-2021 Findings and Trends. 21 American Banker, Bankers Must Confront Security Risk 

of Remote Work (December 22, 2021). 22 American Banker, 'It’s Very Scary': Small Banks Quietly 

Hit By Ransomware Attacks (May 24, 2021). 23 American Banker, Ransomware Group Attacks A New 

Jersey Bank—Then Shuts Down (June 16, 2021). 24 The InTREx work program includes examination 

procedures used to determine the Uniform Rating System 

for Information Technology. The procedures also assess 

compliance with Appendix B to Part 364 of the FDIC Rules 

and Regulations entitled Interagency Guidelines 

Establishing Information Security Standards and 

cybersecurity preparedness. 

25 Notice of Proposed Rulemaking, Computer-Security 

Incident Notification Requirements for Banking 

Organizations and Their Service Providers, 86 Fed. Reg. 

2299 (January 12, 2021). 

26 Computer-Security Incident Notification Requirements 

for Banking Organizations and Their Bank Service 

Providers, 86 Fed. Reg. 223 (November 23, 2021). 27 These digital assets are not insured by the FDIC. 

According to the National Institute of Standards and 

Technology (NIST), distributed ledgers, such as 

blockchains, are tamper-resistant digital records of 

transactions that, once established, cannot be changed. 

NIST Internal Report 8202, Blockchain Technology 

Overview (October 2018). 28 Bloomberg, Crypto Market Retakes $2 Trillion Market 

Cap Amid Bitcoin Gains (August 15, 2021). 29 Basel Committee on Banking Supervision, Discussion 

Paper: Designing a Prudential Treatment for Crypto-assets 

(May 2021). 

30 Basel Committee on Banking Supervision, Discussion 

Paper: Designing a Prudential Treatment for Crypto-assets 

(May 2021). 

31 Bloomberg, Yellen Says U.S. Lacks Adequate Regulatory 

Framework for Crypto (May 4, 2021). 32 Remarks of FDIC Chairman at Money 20/20 Conference 

(October 27, 2021). 33 Time, Fed Chairman Says U.S. Might Need More Crypto 

Regulations, Here’s What That Means for Investors 

(August 12, 2021). 

34 President’s Working Group on Financial Markets, the 

Federal Deposit Insurance Corporation, and the Office of 

the Comptroller of the Currency, Report on Stablecoins 

(November 2021). 35 American Banker, PNC Chief Executive Warns of Threat 

from Stablecoins (October 15, 2021). 36 Financial Institution Letter 75-2021, Joint Statement on 

Crypto-Asset Policy Sprint Initiative and Next Steps 

(November 23, 2021). 

37 The World Bank, Financial Inclusion. 38 FDIC Chairman, Remarks at Fintech: A Bridge to 

Economic Inclusion Conference (June 29, 2021). 39 FDIC Chairman, Remarks at Fintech: A Bridge to 

Economic Inclusion Conference (June 29, 2021). 40 Environmental Protection Agency Press Release, EPA 

Report Shows Disproportionate Impacts of Climate Change 

on Socially Vulnerable Populations in the United States 

(September 2, 2021). 41 Cleveland Federal Reserve, The CRA Is Important for 

Underserved Communities, and Your Input Can Help 

Modernize It (November 16, 2020). 42 Message from FDIC Chair, New Office and Continued 

Focus on Minority Depository Institutions and Other 

Mission-Driven Banks (November 2, 2021). 43 World Economic Forum, Transforming Paradigms A 

Global AI in Financial Services Survey (January 2020). 44 American Banker, Banks Warming to AI-based Lending 

(October 21, 2019). 

45 Brookings Institution, Reducing Bias in AI-based 

Financial Services (July 10, 2020). 46 Federal Reserve Bank of San Francisco, Community 

Development Innovation Review, Regulation to Build a 

More Inclusive Financial System and Drive Financial Health 

(August 19, 2021). 

47 Brookings Institution, Reducing Bias in AI-based 

Financial Services (July 10, 2020). 48 Forbes, The AI-Bias Problem And How FIntechs Should Be 

fighting It: A Deep Dive With Sam Farao (September 29, 

2021), citing, University of California at Berkley, ConsumerLending Discrimination in the FinTech Era (November 

2019). 

49 Deloitte, Developing an effective governance operating 

model – A guide for financial services boards and 

management teams. 50 Organization for Economic Co-operation and 

Development (OECD), G20/OECD Principles of Corporate 

Governance (2015). 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 246 

 

 

 

 

 

 

 

 

 

51 See FDIC Statement on CFPB Statement; the Joint 

Statement of the CFPB Director and FDIC Director (stating 

that in light of extensive consolidation in the banking 

industry over the last 30 years, “the effectiveness of the 

regulatory framework in meeting the requirements of the 

Bank Merger Act is critical to the future safety and 

soundness, financial stability, community accountability, 

and competitiveness of the banking system.”), and 

Statement of Acting Comptroller of the Currency. 52 On December 17, 2021, the Department of Justice, 

Antitrust Division, issued a request for public comments 

on its guidelines regarding bank mergers. 

53 OMB Office of Federal Procurement Policy, Policy Letter 

11–01, Performance of Inherently Governmental and 

Critical Functions (September 2011). 54 OMB Circular No. A-123, Management’s Responsibility 

for Enterprise Risk Management and Internal Control (July 

2016). 

55 NIST SP 800-37, Revision 2, Risk Management 

Framework for Information Systems and Organizations: A 

Systems Lifecycle Approach for Security and Privacy 

(December 2018). 

56 The FDIC’s Information Security Program – 2021; The 

FDIC’s Information Security Program – 2020; The FDIC’s 

Information Security Program – 2019; The FDIC’s 

Information Security Program – 2018. 57 Prior to March 2017, the FDIC closed recommendations 

without OIG review of the corrective actions. As of March 

2017, the OIG now reviews all corrective actions to 

determine whether the FDIC’s actions satisfy the 

recommendation and therefore can be considered closed. 

58 Yale Law Journal Forum, Cost-Benefit Analysis of 

Financial Regulation: A Reply (January 22, 2015). 59 Congressional Research Service, Cost-Benefit Analysis 

and Financial Regulator Rulemaking (April 12, 2017). 60 OMB, Fiscal Year 2021-2022 Guidance on Federal 

Information Security and Privacy Management 

Requirements (December 6, 2021). 61 OMB, Federal Information Security Modernization Act of 

2014 Annual Report to Congress (Fiscal Year 2020). For 

example, in November 2021, a hacker gained access to an 

FBI email system and sent more than 100,000 emails. FBI 

Press Release, FBI Statement on Incident Involving Fake 

Emails (November 13, 2021). 62 CISA Binding Operational Directive Advisory 22-01, 

Reducing the Significant Risk of Known Exploited 

Vulnerabilities (November 3, 2021). 63 For example, in April 2021, threat actors gained access 

to five Federal agencies through remote connection 

software service provider, Ivanti. The FDIC used an Ivanti 

product known as Pulse Secure and took action to 

remediate the vulnerability. In December 2020, Federal 

networks were compromised by a software update from IT 

management services company SolarWinds. FDIC uses a 

SolarWinds product and FDIC officials represented that 

they disconnected its use. Also in December 2020, nation 

state actors exploited a vulnerability in VMware products 

that allowed attackers to forge security credentials and 

gain access to protected date. The FDIC uses a VMware 

product and FDIC officials represented that they took 

action to apply the patch and reduce the risk of 

exploitation. 

64 GAO, High Risk Series: Dedicated Leadership Needed to 

Address Limited Progress in Most High-risk Areas, (GAO21-119SP) (March 2021). 65 Congressional Research Service, Federal Building and 

Facility Security: Frequently Asked Questions (January 27,

2021). 

66 FDIC, Equal Employment Opportunity Policy Statement 

(October 29, 2020). 

67 United States Senate Committee on Banking, Housing, 

and Urban Affairs Minority Press Release, Toomey 

Encourages Federal Employees to Report Allegations of 

Misconduct (December 20,2021). 68 GAO, Federal Financial Regulators Should Take 

Additional Actions to Enhance Their Protection of Personal 

Information (GAO-22-104551) (January 2022). 69 OCC, Semiannual Risk Report (Fall 2021). 70 GAO, Issue Summary: Using Data and Evidence to 

Improve Federal Programs. 71 Harvard Business School, The Advantages of Data-Driven 

Decision Making (August 26, 2019). 72 Deloitte, Anticipatory Government, Preempting 

Problems Through Predictive Analytics (June 24, 2019). 73 The Department of Homeland Security (DHS) defines the 

term, “threat,” as “a natural or human-created 

occurrence, individual, entity, or action that has or 

indicates the potential to harm life, information, 

operations, the environment and/or property.” See DHS 

Risk Lexicon Terms and Definitions, 2017 Edition – Revision 

2 (October 2017). 

74 The ViSION system is an FDIC mission-essential system 

that supports the FDIC’s supervision and insurance 

responsibilities and provides users with access to financial, 

examination, and supervisory information on financial 

institutions. 

75 GAO, Management Report: Improvements Needed in 

FDIC’s Internal Control over Contract-Payment Review 

Processes (GAO-21-420R) (May 13, 2021). 76 FDIC OIG, Security Configuration Management of the 

Windows Server Operating System (January 2019). 77 NIST, Special Publication 800-161 - Supply Chain Risk 

Management Practices for Federal Information Systems 

and Organizations (April 2015). Supply chain refers to 

“organizations, people, activities, information and 

resources, possibly international in scope, that provide 

products or services to consumers.” 78 GAO, Information Security: Supply Chain Risks Affecting 

Federal Agencies, (GAO-18-667T) (July 12, 2018). 79 Europe Union Agency for Cybersecurity, Press Release, 

Understanding the Increase in Supply Chain Security 

Attacks (July 29, 2021). 80 Pub. L. 114-261, An Act to Enhance Whistleblower 

Protection For Contractor and Grantee Employees 

(December 14, 2016). 
FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT 2021 247 

APPENDICES

 

 

 

81 GAO, High-Risk Series: Dedicated Leadership Needed to 

Address Limited Progress in Most High-Risk Areas (GAO21-119SP) (March 2021). 82 The Society for Human Resource Management, 4 

Essential Soft Skills for Successful Remote Work (November 

5, 2020). 83 OPM, Guidance on Establishing an Annual Leadership 

Talent Management and Succession Planning Process 

(November 2017). 84 The McKinsey Quarterly, The War for Talent (1998 

Number 3). 

85 FedWeek, Retirement Wave? Eligibility Numbers 

Holding Steady (January 7, 2020). 

86 Executive Order 14305, Diversity, Equity, Inclusion, and 

Accessibility in the Federal Workforce (June 25, 2021). The 

FDIC Legal Division asserted that the Executive Order is not 

binding on the FDIC, but that the FDIC may voluntarily 

implement the Executive Order’s requirements. 

87 Statement of FDIC Chair, On Oversight of Regulators: 

Does Our Financial System Work for Everyone? (August 3, 

2021). 

88 FDIC OMWI, Total FDIC Workforce Demographics as of 

June 30, 2021. 

89 White House, Strengthening the Federal Workforce (May 

2021). 
 

 

 

 

APPENDICES 

D. Acronyms

AEI Alliances for Economic Inclusion 

AFS Available-For-Sale 

AHDP Affordable Housing Disposition Program 

AI Artificial Intelligence 

AIG American International Group, Inc. 

AML Anti-Money Laundering 

AML/CFT Anti-Money Laundering and Countering the Financing of Terrorism 

ANPR Advance Notice of Proposed Rulemaking 

ASBA Association of Supervisors of Banks of the Americas 

ASC Accounting Standards Codification 

BCBS Basel Committee on Banking Supervision 

BoA Bank of America, N.A. 

BSA Bank Secrecy Act 

Call Report Consolidated Reports of Condition and Income 

CAMELS Capital adequacy; Asset quality; Management capability; Earnings 

quality; Liquidity adequacy; Sensitivity to market risk 

CARES Act Coronavirus Aid Relief and Economic Security Act 

CBAC Community Bank Advisory Committee 

CCP Central Counterparties 

CDFI Community Development Financial Institution 

CECL Current Expected Credit Losses 

CEO Chief Executive Officer 

CFO Act Chief Financial Officers’ Act 

CFPB Consumer Financial Protection Bureau 

CFR Center for Financial Research 

CFT Countering the Financing of Terrorism 

CFTC Commodity Futures Trading Commission 

CIO Chief Information Officer 

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APPENDICES 

CIOO Chief Information Officer Organization 

CISR Division of Complex Institution Supervision and Resolution 

CMG Crisis Management Group 

CMP Civil Money Penalty 

ComE-IN Advisory Committee on Economic Inclusion 

COVID-19 Coronavirus Disease 2019 

CRA Community Reinvestment Act 

CRC Consumer Response Center 

CSBS Conference of State Bank Supervisors 

CSRS Civil Service Retirement System 

DCP Division of Depositor and Consumer Protection 

DFA Dodd-Frank Act 

DIF Deposit Insurance Fund 

DIR Division of Insurance and Research 

DIT Division of Information Technology 

DOA Division of Administration 

DRR Division of Resolutions and Receiverships 

EC European Commission 

EDIE Electronic Deposit Insurance Estimator 

EGRRCPA Economic Growth, Regulatory Relief, and Consumer Protection Act 

EU European Union 

ERM Enterprise Risk Management 

FAQs Frequently Asked Questions 

FASB Financial Accounting Standards Board 

FBO Foreign Bank Organization 

FDI Act Federal Deposit Insurance Act 

FDIC Federal Deposit Insurance Corporation 

FEHB Federal Employees Health Benefits 

FERS Federal Employees Retirement System 

FFB Federal Financing Bank 

FEDERAL DEPOSIT INSURANCE CORPORATION 
 

 

 

 

 

 

 

APPENDICES 

FFIEC Federal Financial Institutions Examination Council 

FFMIA Federal Financial Management Improvement Act 

FID Financial Institution Diversity 

FinCEN Financial Crimes Enforcement Network 

FinTech Financial Technology 

FIRREA Financial Institutions Reform, Recovery and Enforcement Act 

FISMA Federal Information Security Modernization Act of 2014 

FMFIA Federal Managers’ Financial Integrity Act 

FRB Board of Governors of the Federal Reserve System 

FRF FSLIC Resolution Fund 

FRWG Financial Regulatory Working Group 

FSB Financial Stability Board 

FSLIC Federal Savings and Loan Insurance Corporation 

FSOC Financial Stability Oversight Council 

FTE Full-Time Employee 

GAAP Generally Accepted Accounting Principles 

GAO U.S. Government Accountability Office 

GDP Gross Domestic Product 

GPRA Government Performance and Results Act 

G-SIBs Global Systemically Important Banks 

G-SIFI Global SIFIs 

HMDA Home Mortgage Disclosure Act 

IADI International Association of Deposit Insurers 

IDI Insured Depository Institution 

IMF International Monetary Fund 

IRS Internal Revenue Service 

IT Information Technology 

LCFI Large Complex Financial Institution 

LIBOR London Inter-bank Offered Rate 

LIDI Large Insured Depository Institution 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 

 

 

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LMI Low- Moderate-Income 

LURAs Land Use Restriction Agreements 

MDI Minority Depository Institutions 

ML Machine Learning 

MOL Maximum Obligation Limitation 

MOU Memoranda of Understanding 

MRBA Matters Requiring Board Attention 

MWOB Minority- and Women-Owned Business 

MWOLF Minority-and Women-Owned Law Firms 

NAMWOLF National Association of Minority-and Women-Owned Law Firms 

NCDA National Center for Consumer and Depositor Assistance 

NCUA National Credit Union Administration 

NPR Notice of Proposed Rulemaking 

NSFR Net Stable Funding Ratio 

OCC Office of the Comptroller of the Currency 

OIG Office of the Inspector General 

OLF Orderly Liquidation Fund 

OMB U.S. Office of Management and Budget 

OMWI Office of Minority and Women Inclusion 

OO Office of the Ombudsman 

OPM Office of Personnel Management 

ORMIC Office of Risk Management and Internal Controls 

OTS Office of Thrift Supervision 

PPP Paycheck Protection Program 

Q&A Question and Answer 

QFC Qualified Financial Contract 

REFCORP Resolution Funding Corporation 

RFI Request For Information 

RMS Division of Risk Management Supervision 

RTO Return to Office 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
 

 

APPENDICES 

SBA Small Business Administration 

SEC Securities and Exchange Commission 

SIFI Systemically Important Financial Institution 

SLA Shared-Loss Agreement 

SMS Systemic Monitoring System 

SNC Shared National Credit Program 

SRAC Systemic Resolution Advisory Committee 

SRR SIFI Risk Report 

SSGNs Securitizations and Structured Sale of Guaranteed Note 

TLAC Total Loss-Absorbing Capacity 

TSP Federal Thrift Savings Plan 

TSP (IT-related) Technology Service Providers 

UDAA Unclaimed Deposits Amendments Act of 1933 

UK United Kingdom 

Treasury U.S. Treasury 

VIEs Variable Interest Entities 

VITA Volunteer Income Tax Assistance 

WRH Wisconsin Rural Housing 

FEDERAL DEPOSIT INSURANCE CORPORATION ANNUAL REPORT   
2021

Federal Deposit 

Insurance Corporation 

This Annual Report was produced by talented and dedicated sta
 . To these 

individuals, we would like to o
 er our sincere thanks 

and appreciation. Special recognition is given to the following 

for their contributions: 

 ̃ Jannie F. Eaddy 

 ̃ Barbara A. Glasby 

 ̃ Financial Reporting Section Sta
 

 ̃ Division and O
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FEDERAL DEPOSIT INSURANCE CORPORATION 
 

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