Federal law enacted in 1991 to address the thrift industry crisis. FDICIA recapitalized the Bank Insurance Fund of the Federal Deposit Insurance Corporation (FDIC), expanded the authority of banking regulators to seize undercapitalized banks, and expanded consumer protections available to banking customers.
Among its major provisions:
(1) raised the FDIC's authority to borrow from the Treasury Department from $5 million to $30 million.
(2) revised deposit insurance coverage, linking the premiums banks pay for FDIC insurance to their financial strength.
(3) required banking regulators to intervene in restructuring banks and thrifts that fail to meet minimum capital requirements.
(4) required the FDIC to use the method least costly to the insurance fund when merging insolvent banks into healthy ones.
(5) required annual on-site examinations of banks and thrifts.
(6) required banks and thrifts to disclose fair market value of their assets.
(7) required audited financial statements in annual reports of banks and thrifts with assets of $150 million or more.
(8) introduced a new formula for computing capital adequacy.
(9) imposed new limits on executive compensation and lending to senior officers and bank directors.
(10) extended U.S. Banking regulations and on-site examinations to branches of foreign banks.
(11) required disclosure of more information (Truth in Savings) on interest rates paid to depositors.
See also Regulation F; Risk-Based Deposit Insurance; Uninsured Depositor.
