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The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. 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 has been increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".
In the United States, banking had begun by the 1780s, along with the country's founding. It has developed into a highly influential and complex system of banking and financial services. Anchored by New York City and Wall Street, it is centered on various financial services, such as private banking, asset management, and deposit security.
The savings and loan crisis of the 1980s and 1990s was the failure of 32% of savings and loan associations (S&Ls) in the United States from 1986 to 1995. An S&L or "thrift" is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members.
A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy. A bailout differs from the term bail-in under which the bondholders or depositors of global systemically important financial institutions (G-SIFIs) are forced to participate in the recapitalization process but taxpayers are not. Some governments also have the power to participate in the insolvency process; for instance, the U.S. government intervened in the General Motors bailout of 2009–2013. A bailout can, but does not necessarily, avoid an insolvency process. The term bailout is maritime in origin and describes the act of removing water from a sinking vessel using a bucket.
The Continental Illinois National Bank and Trust Company was at one time the seventh-largest commercial bank in the United States as measured by deposits, with approximately $40 billion in assets. In 1984, Continental Illinois became the largest ever bank failure in U.S. history, when a run on the bank led to its seizure by the Federal Deposit Insurance Corporation (FDIC). Continental Illinois retained this dubious distinction until the failure of Washington Mutual in 2008 during the financial crisis of 2008, which ended up being over seven times larger than the failure of Continental Illinois.
An industrial loan company (ILC) or industrial bank is a financial institution in the United States that lends money, and may be owned by non-financial institutions. They provide niche financial services nationwide. ILCs offer FDIC-insured deposits and are subject to FDIC and state regulator oversight. All "FDIC-insured entities are subject to Sections 23A and 23B of the Federal Reserve Act, which limits bank transactions with affiliates, including the non-bank parent company." ILCs are permitted to have branches in multiple states. They are regulated and supervised by state charters and insured by the Federal Deposit Insurance Corporation. They are authorized to make consumer and commercial loans and accept federally insured deposits. Banks may not accept demand deposits if the bank has total assets greater than $100 million. ILCs are exempted from the Bank Holding Company Act.
Regions Financial Corporation is an American bank holding company headquartered in the Regions Center in Birmingham, Alabama. The company provides retail and commercial banking, trust, stock brokerage, and mortgage services. Its banking subsidiary, Regions Bank, operates about 2,000 automated teller machines and 1,300 branches in 15 states in the Southern and Midwestern United States.
United Commercial Bank was an overseas Chinese bank in the United States, based in San Francisco, California. It was a subsidiary of UCBH Holdings. Founded in 1974 as United Federal Savings and Loan Association, it changed its name to United Savings Bank, and finally United Commercial Bank in 1998. It had operations and branches located in the San Francisco Bay Area, Sacramento, Stockton, Los Angeles and Orange counties, New York, Boston, Greater Seattle Area, Hong Kong, Atlanta, Houston, Shanghai and two representative branches in Taipei, Taiwan and Shenzhen, China. United Commercial Bank was closed by regulators on November 6, 2009; it was the 120th U.S. bank to fail in 2009, and it had $11.2 billion in assets at the time of the bank failure. East West Bank of Pasadena, California, acquired all the deposits of UCBH.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s.
Beal Financial Corporation is a bank holding company based in Plano, Texas that operates two federally chartered banks: Beal Bank, with 6 branches, and Beal Bank USA, headquartered in Las Vegas, Nevada, with 10 branches and a direct bank. It is on the list of largest banks in the United States. It was founded by and is entirely owned by billionaire Andrew Beal and specializes in acquiring distressed securities at discounted values. It acquires risky loans, but keeps a much higher equity buffer than other banks.
BOK Financial Corporation — pronounced as letters, "B-O-K" — is a financial services holding company headquartered in Tulsa, Oklahoma. Offering a full complement of retail and commercial banking products and services across the American Midwest and Southwest, the company is one of the 50 largest financial services firms in the U.S., and the largest in Oklahoma.
"Too big to fail" (TBTF) is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and therefore should be supported by government when they face potential failure. The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois. The term had previously been used occasionally in the press, and similar thinking had motivated earlier bank bailouts.
New York Private Bank & Trust Corporation is a bank holding company headquartered in New York City, United States. Howard Milstein is the chairman, president and CEO. As of early 2007, it had US$17.3 billion in assets and was the 50th largest bank holding company in the United States. As of March 31, 2019 its assets were US$5.716 billion. The company had 1,221 employees in 2019.
FBOP Corporation was a financial services company based in Oak Park, Illinois, United States. As of mid-2009, it had $18.5 billion in assets and was the 46th largest bank holding company in the United States. On October 30, 2009, FBOP's banking subsidiaries were closed by their chartering agencies and the Federal Deposit Insurance Corporation was appointed as their receiver. The company had over 4064 employees.
The government interventions during the subprime mortgage crisis were a response to the 2007–2009 subprime mortgage crisis and resulted in a variety of government bailouts that were implemented to stabilize the financial system during late 2007 and early 2008.
The Bank of New England Corporation was a regional banking institution based in Boston, Massachusetts, which was seized by the Federal Deposit Insurance Corporation (FDIC) in 1991 as a result of heavy losses in its loan portfolio and was placed into Chapter 7 liquidation. At the time, it was the 33rd largest bank in the United States, and its federal seizure bailout was the second-largest on record. At its peak, it had been the 18th largest bank and had over 470 branch offices. The liquidation company was named Recoll Management Corporation and its bankruptcy estate has continued to exist to pay out claims against the company. As of 2016, most of what was once Bank of New England is now part of Bank of America.
A community bank is a depository institution that is typically locally owned and operated. Community banks tend to focus on the needs of the businesses and families where the bank holds branches and offices. Lending decisions are made by people who understand the local needs of families, businesses, and farmers. Employees often reside within the communities they serve.
This article details the history of banking in the United States. Banking in the United States is regulated by both the federal and state governments.
A systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. They are colloquially referred to as "too big to fail".
A bank examiner is a financial professional who has the task of making sure that banks and savings and loan associations are operating legally and safely, in accordance with the bank regulations imposed on these institutions by the chartering level of government. In the United States, they may conduct supervision on behalf of a U.S. government agency, the Federal Reserve System, a state banking authority, or for the financial institutions themselves as internal auditors. The main duties of a bank examiner are to ensure that a bank's operations are legal and can provide financial stability. A bank examiner will also review financial statements, evaluate the level of risk associated with loans, and assess the management of a bank.
References
- ↑ "FDIC Quarterly". Federal Deposit Insurance Corporation.
- ↑ "Large Commercial Banks". Federal Reserve.
- ↑ "Holding Companies with Assets Greater Than $10 Billion". Federal Financial Institutions Examination Council.
- ↑ "Large Bank Capital Requirements" (PDF). August 2022.
- ↑ "Results". Board of Governors of the Federal Reserve System.
- ↑ "Yahoo! Finance". Yahoo! Finance .
