Federal Deposit Insurance Reform Act
Encyclopedia
The Federal Deposit Insurance Reform Act of 2005 (Title II, subtitle B of , with a companion statute, Federal Deposit Insurance Reform Conforming Amendments Act of 2005), is an act of the United States Congress
that regulates banks. It contained a number of changes to the Federal Deposit Insurance Corporation
(FDIC).
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
that regulates banks. It contained a number of changes to the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
(FDIC).
- It raised the limit on deposit insuranceDeposit insuranceExplicit deposit insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due...
for retirement accounts from $100,000 to $250,000, and indexed the amount to inflationInflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...
. - It merged the two deposit insurance funds that the FDIC had been administering separately since the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). FIRREA, among many things, abolished the former Federal Savings and Loan Insurance CorporationFederal Savings and Loan Insurance CorporationThe Federal Savings and Loan Insurance Corporation was an institution that administered deposit insurance for savings and loan institutions in the United States...
(FSLIC), and created a new insurance fund, Savings Association Insurance Fund (SAIF), to be administered by the FDIC. The other longer standing fund that the FDIC was administering was the Bank Insurance Fund (BIF). SAIF and BIF were combined constituting the Depositor Insurance Fund (DIF). - It provided credits to banks that had paid into the deposit insurance funds in the early 1990s in the aftermath of the savings and loan crisisSavings and Loan crisisThe savings and loan crisis of the 1980s and 1990s was the failure of about 747 out of the 3,234 savings and loan associations in the United States...
. - It requires that the FDIC issue rebates to the banking industry should the level of the deposit insurance fund rise above 1.50% of total insured deposits.