Federal Deposit Insurance CorporationNational Press Building, Washington 25, D.C.; EXecutive 8400
Field Building, Chicago 3, Ill; ANdover 5770
BOARD OF DIRECTORS Chairman Leo T. Crowley Directors Phillips Lee Goldsborough
Secretary E.F. Downey Executive Officer Henry W. Riley Secretary to Chairman Beryl Roberts Assistant to Phillips L. Goldsborough Albert G. Towers Special Assistant to the Chairman J. Forbes Campbell General Counsel Francis C. Brown Acting Chief, Division of Examination Neil G. Greensides Chief, Division of Research and Statistics Homer Jones Director of Personnel Carl W. Satterlee Chief, Service Division Frank C. Blowe Librarian Amy Dene Early Chicago, Ill. Chief, Division of Liquidation Wheeler McDougal Supervising Liquidator, Division of Liquidation Ralph E. Zimmerman Supervising Claim Agent, Division of Liquidation James M. Gaffney Supervising Accountant, Division of Liquidation H.R. Burling Counsel James M. Kane Fiscal Agent W.G. Loeffler Chief, Audit Division Mark A. Heck
Creation and Authority.--The Federal Deposit Insurance Corporation was organized under authority of the Banking Act of 1933 (48 Stat. 162; 12 U.S.C.; 15 U.S.C. 19a; 39 U.S.C. 758-59), approved by the President on June 16, 1933. This act was amended by Public Act 362, approved June 16, 1934 (73d Cong.P; by Public Resolution 38, approved June 28, 1935 (74th Cong.); by the Banking Act of 1935, approved August 23, 1935 (Public Act 305, 74th Cong.); by Public Resolution 83, approved April 21, 1936 (74th Cong.); by Public Act 544, approved May 25, 1938 (75th Cong. 3d sess.); by Public Resolution 116, approved June 16, 1938 (75th Cong., 3d sess.); by Public Act 135, approved June 20, 1939 (76th Cong., 1st sess.); by Public Law 603, approved June 11, 1942 (77th Cong., 2d sess.); and by Public Law 37, approved April 13, 1943 (78th Cong., 1st sess.).
Purpose.--The chief purpose of the Corporation is to insure the deposits of all banks which are entitled to the benefits of insurance under the law. The major functions of the Corporation are to pay off the depositors of insured banks closed without adequate provision having been made to pay claims of their depositors, to act as receiver for all suspended national banks and for suspended State banks when appointed by State authorities, and to prevent the continuance or development of unsafe and unsound banking practices. The Corporation may also make loans to or purchase assets from the insured banks when such loans or purchases will facilitate a merger or consolidation and will reduce the probable loss to the Corporation.
Organization.--Management of the Corporation is vested in a board of directors of three members. The President appoints two members for terms of 6 years, by and with the advice and consent of the Senate. The third member is the Comptroller of the Currency. One of the appointive members is made chairman of the board of directors, and the law requires that not more than two members of the board shall belong to the same political party.
The principal office of the Corporation is in Washington, D.C., and a subsidiary office is located in Chicago. District offices are maintained in Boston, New York, Columbus, Richmond, Atlanta, St. Louis, Madison, Chicago, St. Paul, Kansas City, Dallas, and San Francisco.
Capital.--The capital stock of the Corporation, subscribed according to the requirements of law, is as follows: (1) by the Treasury of the United States, $150,000,000; (2) by the Federal Reserve Banks, $139,299,556.99. Each Federal Reserve Bank subscribed to stock in an amount equal to one-half of the surplus of such bank as of January 1, 1933. All subscriptions have been called and paid in full. The entire capital stock of the Corporation is without nominal or par value, and the consideration received therefor may be allocated to capital and to surplus in such amounts as the board of directors shall prescribe. The stock has no vote and is not entitled to the payment of dividends. on June 30, 1944, the surplus of the Corporation amounted to $462,984,000 and total capital account to $752,284,000.
Outstanding Obligations.--The Corporation is authorized and empowered to issue debentures or other obligations in an amount aggregating not more than three times the amount received in payment of its capital stock and in payment of the assessments upon insured banks for the year 1936. A market is created for such obligations to the extent of $500,000,000 through a requirement that the Reconstruction Finance Corporation and the Treasury purchase such obligations to that extent, the proceeds to be used in carrying out the functions of the Federal Deposit Insurance Corporation with respect to insurance of deposits. No obligations have been issued under these provisions of the law.
Permanent Plan for Insurance of Deposits.--Section 12 B of the Federal Reserve Act, as amended, provides for the insurance of the deposits of each depositor in an insured bank to the extent of $5,000. The creation of an insurance reserve in provided for through annual assessment, at the rate of one-twelfth of 1 percent, upon the average deposits less authorized deductions, of each insured bank. This assessment is payable in semiannual installments. Assessments paid into the Temporary Federal Deposit Insurance Fund by insured banks were credit in full to those banks to apply on assessments to be levied under the permanent insurance plan.
Eligibility of Banks.--All banks which are members of the Federal Reserve System are, under the law, insured under the permanent insurance plan. Any bank located in any State of the United States or the District of Columbia which is not a member of the Federal Reserve System, may become insured upon an application to and examination by the Corporation and approval by the board of directors. Banks in Hawaii, Alaska, Puerto Rico, and the Virgin Islands
are eligible to apply for insurance. In acting upon the application for admission to insurance of a bank not a member of the Federal Reserve System, the Corporation is required to take into consideration the financial history and condition of the bank, the adequacy of its capital structure, its future earning prospects, the general character of its management, the convenience and needs of the community to be served by the bank, and whether or not its corporate powers are consistent with the purposes of the permanent Federal deposit insurance law. Any bank which is not a member of the Federal Reserve System may terminate its insurance upon notice at any time, but the existing deposits continue to be insured for 2 years thereafter.
Powers of the Corporation in Relation to Insured Banks.--The Corporation is given the following powers with respect to insured banks:
- To examine, periodically, insured banks not members of the Federal Reserve System, and to examine banks with the written consent of the Comptroller of the Currency in the case of national banks and with the written consent of the Board of Governors of the Federal Reserve System in the case of other banks which are members of the Federal Reserve System.
- To terminate the insured status of a bank which continues, after notice and hearing, to engage in unsafe and unsound practices, the insurance of existing deposits continuing for 2 years thereafter.
- To approve or disapprove any consolidation or merger with a noninsured bank or the transfer of assets to a noninsured bank in consideration of the assumption of the liability for deposits made in an insured bank.
- To act as receiver for all suspended national banks, and for suspended State banks when appointed by State authorities.
- To make loans to, or purchase assets from, insured banks, in order to facilitate mergers or consolidations, and to reduce risks or avert threatened loss.
- To approve or disapprove a proposal to reduce the capital of an insured bank not a member of the Federal Reserve System.
- To approve or disapprove a proposal by an insured bank not a member of the Federal Reserve System to establish and operate a new branch, or remove a branch from one location to another.
- To regulate advertising which banks are required to use to enable the public to know that they are insured.
- To require insurance protection against burglary, defalcation, and other similar insurable losses.
- To publish notice of the termination of the insured status of a bank and to regulate the manner in which the bank shall give the required notice of such termination to depositors.
- To prohibit the payment of interest on demand deposits of insured banks not members of the Federal Reserve System.
- To limit rates of interest or dividends on time and savings deposits of insured banks not members of the Federal Reserve System and to prescribe different rates for deposits received under different specified conditions.
- To prohibit, before maturity, the payment of time deposits of insured banks not members of the Federal Reserve System, or the
waiver of any requirement of notice before payment of any savings deposit, except as to all savings deposits having the same requirement.
Operations of Deposit Insurance.--The insurance extends to deposits of every kind, including regular commercial deposits, time deposits, savings deposits, and trust funds awaiting investment. No distinction is made between public and private deposits, and the insurance applies even though security, such as depository bonds or collateral, may have been furnished by the bank for the repayment of such deposits.
Upon the closing of a bank, the Corporation immediately assumes the insured deposit liability of the closed bank and makes available the funds needed to discharge such liability. For this purpose the Corporation may, if it finds that it is advisable, organize a new national bank. The claim of each insured depositor is paid upon assignment to the Corporation by him of all rights to dividends and recoveries on account and to the extent of his insured deposit. The dispositors in the 245 insured banks that have been placed in receivership from the beginning of deposit insurance to June 30, 1944, have been paid in each case a soon as their claims have been presented to agents of the Corporation and proved.
Depositors in 152 hazardous insured banks have been given full protection and uninterrupted bank service when, with financial aid from the Corporation in the form of loans or purchases of assets, these banks have been merged with solvent insured banks.
Number of Banks Insured.--Of the 14,192 operating commercial banks and trust companies in the United States and possessions on June 30, 1944, deposits in 13,269 banks were insured by the Federal Deposit Insurance Corporation. Of these banks, 6,770 by virtue of membership in the Federal Reserve System were automatically insured, and 6,499 were banks not members of the Federal Reserve System which had made application and had been admitted to insurance. In addition, of the 544 mutual savings banks, 192 were insured by the Corporation.
Federal Credit Unions.--Federal credit unions are cooperative associations organized in accordance with the Federal Credit Union Act, as amended (12 U.S.C. 1751-71), for the purpose of promoting thrift among their members and creating a source of credit for provident or productive purposes.
Effective May 16, 1942, all functions, powers, and duties of the Farm Credit Administration and of the Governor thereof under the Federal Credit Union Act were transferred to the Federal Deposit Insurance Corporation by Executive Order 9148 of April 27, 1942. On June 30, 1944, there were 3,847 Federal credit unions in operation. Share balances in credit unions are not insured by the Corporation.
Building and Loan Associations.--The Corporation does not insure the obligations of building and loan associations to their customers, since such associations are not banks and their liabilities are stock or share-holder liabilities rather than deposit liabilities. However, the Federal Savings and Loan Insurance Corporation does insure obligations of the eligible building and loan associations. (See p. 127.)
Funds.--No appropriations are made by Congress to the Corporation. All losses incurred by the Corporation in paying the insured deposits of insolvent banks, and all administrative expenses of the
Corporation, are met from Corporation funds. The funds of the Corporation not otherwise employed are required to be invested in securities of the Government of the United States, except that for temporary periods they may be deposited in a Federal Reserve Bank or with the Treasurer of the United States.
District Offices--Federal Deposit Insurance Corporation District Supervising Examiner Address No. 1. Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont Leo J. Carr, Acting Room 765, No. 10 Post Office Square, Boston 9, Mass. No. 2. Delaware, New Jersey, New York, Puerto Rico, Virgin Islands L.F. Stroefer Room 1900, 14 Wall Street, New York 5, N.Y. No. 3. Ohio, Pennsylvania L.F. Stroefer City National Bank Building, 20 East Broad Street, Columbus 15, Ohio No. 4. District of Columbia, Maryland, North Carolina, South Carolina, Virginia, West Virginia L.W. Barlow 909 State Planters Bank & Trust Company Building, Richmond 19, Va. No. 5. Alabama, Florida, Georgia, Louisiana, West Virginia W. Clyde Roberts 625 First National Bank Building, Atlanta 3, Ga. No. 6. Arkansas, Kentucky, Missouri, Tennessee Neil G. Greensides 1059 Arcade Building, St. Louis 1, Mo. No. 7. Indiana, Michigan, Wisconsin R.L. Hopkins 715 Tenney Building, Madison 3, Wis. No. 8. Illinois, Iowa C.L. Pitman 741 Federal Reserve Bank Building, Chicago 4, Ill. No. 9. Minnesota, Montana, North Dakota, South Dakota R.O. Bishop 1200 Minnesota Building, St. Paul 1, Minn. No. 10. Colorado, Kansas, Nebraska, Oklahoma, Wyoming G.F. Roetzel 901 Federal Reserve Bank Building, Kansas City 6, Mo. No. 11. Arizona, New Mexico, Texas L.J. Davis Federal Reserve Bank Building, Station K, Dallas 13, Tex. No. 12. California, Idaho, NEvada, Oregon, Utah, Washington, Alaska, Hawaii W.P. Funsten Suite 1120, 315 Montgomery Street, San Francisco 4, Calif.
Leo T. Crowley
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