BROWSE

Federal Deposit Insurance Corporation Improvement Act (FDICIA)

What is 'Federal Deposit Insurance Corporation Improvement Act - FDICIA'

Passed in 1991 at the height of the Savings and Loan Crisis (S&L), this act fortified the FDIC's role and resources in protecting consumers. The most notable provisions of the act raised the FDIC's U.S. Treasury line of credit from $5 million to $30 million, revamped the FDIC auditing and evaluation standards of member banks, and created the Truth in Savings Act (Regulation DD).

Explaining 'Federal Deposit Insurance Corporation Improvement Act - FDICIA'

While it may be hard to fully appreciate the changes made to the internal workings of the FDIC through this legislative act, most consumers can agree that the Truth in Savings Act has gone a long way towards forcing banks to deliver on their advertised promises.

The Truth in Savings Act, which was part of the FDICIA, has forced banks to begin disclosing savings account interest rates using the uniform annual percentage yield (APY) method. This has helped consumers to better understand their potential return on a deposit at a bank, as well as to compare multiple products and multiple banks simultaenously.


Further Reading




Q&A About Federal Deposit Insurance Corporation Improvement Act (FDICIA)


What is the FDIC?

The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors in member banks.

What did FDICIA do to strengthen the role and resources of the FDIC?

It fortified the role and resources of the FDIC by raising its U.S. Treasury line of credit from 5 million to 3 million, revamping auditing and evaluation standards for member banks, and creating a new act called "The Truth in Savings Act" (Regulation DD).

How has Regulation DD helped consumers?

Consumers have been able to better understand their potential return on a deposit at a bank as well as compare multiple products and multiple banks simultaneously with this regulation.