page_title: Federal Deposit Insurance Corporation
section_title: Establishment of the FDIC: 1933
hierarchical_section_title: Federal Deposit Insurance Corporation / History / Establishment of the FDIC: 1933
caption_attribution_description: FDIC placard from when the deposit insurance limit was $2,500.
context_page_description: The Federal Deposit Insurance Corporation is one of two agencies that provide deposit insurance to depositors in U.S. depository institutions, the other being the National Credit Union Administration, which regulates and insures credit unions. The FDIC is a United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings banks. The FDIC was created by the 1933 Banking Act, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this was increased several times over the years. Since the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2011, the FDIC insures deposits in member banks up to US$250,000 per ownership category.
  The FDIC and its reserves are not funded by public funds; member banks' insurance dues are the FDIC's primary source of funding. The FDIC also has a US$100 billion line of credit with the United States Department of the Treasury.
context_section_description: President Franklin D. Roosevelt himself was dubious about insuring bank deposits, saying, "We do not wish to make the United States Government liable for the mistakes and errors of individual banks, and put a premium on unsound banking in the future." But public support was overwhelmingly in favor, and the number of bank failures dropped to near zero. On 16 June 1933, Roosevelt signed the 1933 Banking Act into law, creating the FDIC. The initial plan set by Congress in 1934 was to insure deposits up to $2,500 ($47,780 today) adopting of a more generous, long-term plan after six months. However, the latter plan was abandoned for an increase of the insurance limit to $5,000 ($95,560 today).
  The 1933 Banking Act:
  Established the FDIC as a temporary government corporation. The Banking Act of 1935 made the FDIC a permanent agency of the government and provided permanent deposit insurance maintained at the $5,000 level.
  Gave the FDIC authority to provide deposit insurance to banks
  Gave the FDIC the authority to regulate and supervise state non-member banks
  Funded the FDIC with initial loans of $289 million through the U.S. Treasury and the Federal Reserve, which were later paid back with interest
  Extended federal oversight to all commercial banks for the first time
  Separated commercial and investment banking (Glass–Steagall Act)
  Prohibited banks from paying interest on checking accounts
  Allowed national banks to branch statewide, if allowed by state law.
caption: Bank sign indicating the original insurance limit offered by the FDIC of $2,500 in 1934
exif: {"Image Make": "EASTMAN KODAK COMPANY", "Image Model": "KODAK EASYSHARE M1033 DIGITAL CAMERA", "Image Orientation": "Horizontal (normal)", "Image XResolution": "480", "Image YResolution": "480", "Image ResolutionUnit": "Pixels/Inch", "Image Software": "Microsoft Windows Photo Gallery 6.0.6001.18000", "Image DateTime": "2009:09:28 16:40:32", "Image YCbCrPositioning": "Centered", "Image Rating": "0", "Image ExifOffset": "2362", "Image Padding": "[]", "Thumbnail Compression": "JPEG (old-style)", "Thumbnail XResolution": "1/96", "Thumbnail YResolution": "1/96", "Thumbnail ResolutionUnit": "Pixels/Inch", "Thumbnail JPEGInterchangeFormat": "17984", "Thumbnail JPEGInterchangeFormatLength": "3513", "EXIF ExposureTime": "1/60", "EXIF FNumber": "31/10", "EXIF ExposureProgram": "Program Normal", "EXIF ISOSpeedRatings": "500", "EXIF ExifVersion": "0221", "EXIF DateTimeOriginal": "2009:09:28 01:44:36", "EXIF DateTimeDigitized": "2009:09:28 01:44:36", "EXIF ComponentsConfiguration": "YCbCr", "EXIF ShutterSpeedValue": "6", "EXIF ApertureValue": "33/10", "EXIF BrightnessValue": "0", "EXIF ExposureBiasValue": "0", "EXIF MaxApertureValue": "33/10", "EXIF MeteringMode": "Pattern", "EXIF LightSource": "Unknown", "EXIF Flash": "Flash did not fire, compulsory flash mode", "EXIF FocalLength": "63/10", "EXIF SubSecTimeOriginal": "20", "EXIF FlashPixVersion": "0100", "EXIF ColorSpace": "sRGB", "EXIF ExifImageWidth": "2152", "EXIF ExifImageLength": "2077", "Interoperability InteroperabilityIndex": "R98", "Interoperability InteroperabilityVersion": "[48, 49, 48, 48]", "EXIF InteroperabilityOffset": "17810", "EXIF ExposureIndex": "500", "EXIF SensingMethod": "One-chip color area", "EXIF FileSource": "Digital Camera", "EXIF SceneType": "Directly Photographed", "EXIF CustomRendered": "Custom", "EXIF ExposureMode": "Auto Exposure", "EXIF WhiteBalance": "Auto", "EXIF DigitalZoomRatio": "0", "EXIF FocalLengthIn35mmFilm": "35", "EXIF SceneCaptureType": "Standard", "EXIF GainControl": "High gain up", "EXIF Contrast": "Normal", "EXIF Saturation": "Normal", "EXIF Sharpness": "Normal", "EXIF SubjectDistanceRange": "0", "EXIF ImageUniqueID": "E5F6FEEFF27D4111A3283CBE3094A9C9", "EXIF Padding": "[]", "EXIF OffsetSchema": "4156"}