Federal Deposit Insurance Reform Act

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The Federal Deposit Insurance Reform Act of 2005 (Title II, subtitle B of Pub.L. 109–171, 110 Stat. 9, enacted February 8, 2006, with a companion statute, Federal Deposit Insurance Reform Conforming Amendments Act of 2005, Pub.L. 109–173, 119 Stat. 3601, enacted February 15, 2006), is an act of the United States Congress that regulates banks. It contained a number of changes to the Federal Deposit Insurance Corporation (FDIC).

  • It raised the limit on deposit insurance for retirement accounts from $100,000 to $250,000, and indexed the amount to inflation.
  • 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 Corporation (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 crisis.
  • 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.