Federal Deposit Insurance Corporation Improvement Act - FDICIA


DEFINITION of '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).

BREAKING DOWN '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.

  1. Monetary Policy

    Monetary policy is the actions of a central bank, currency board ...
  2. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  3. FDIC Insured Account

    An account that meets the requirements to be covered or insured ...
  4. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  5. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  6. Thrift Bank

    A financial institution focusing on taking deposits and originating ...
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