FDIC, Deposit Insurance & Bank Resolution

The Federal Deposit Insurance Corporation — created by the Banking Act of 1933 and governed by 12 U.S.C. §§ 1811–1835a — insures deposits at member banks up to $250,000 per depositor, per institution, per ownership category, protecting approximately $10 trillion in insured deposits across roughly 4,600 federally insured banks and savings associations. When a bank fails, the FDIC acts as receiver: it either facilitates an acquisition by a healthy institution (protecting all depositors, typically over the weekend) or pays out insured deposits directly. The Dodd-Frank Act (2010) added the Orderly Liquidation Authority (OLA) under 12 U.S.C. §§ 5381–5394, giving the FDIC a second tool — specifically for systemically important financial institutions (SIFIs) whose failure could destabilize the broader financial system — bypassing bankruptcy with a federal receivership funded by industry assessments, not taxpayer bailouts. The 2023 bank failures — Silicon Valley Bank ($209B assets), Signature Bank, and First Republic — tested both frameworks. SVB and Signature were resolved using a "systemic risk exception" that covered all deposits, including uninsured amounts above $250,000, to prevent broader contagion. That decision — guaranteeing uninsured deposits not covered by the standard $250,000 limit — reignited the debate over implicit government guarantees and moral hazard in banking.

Current Law (2026)

Legal Authority

• 12 U.S.C. § 1811 — FDIC establishment (the FDIC is established as an independent agency to insure deposits, examine insured depository institutions, and act as receiver for failed insured institutions)
• 12 U.S.C. § 1821 — Insurance and receivership powers (FDIC insures deposits up to $250,000; FDIC is appointed receiver for failed insured institutions; as receiver, FDIC may transfer assets and liabilities, organize bridge banks, and conduct orderly wind-downs)
• 12 U.S.C. § 1823 — Assistance to insured depository institutions (FDIC may provide financial assistance to prevent failure of insured institutions; subject to least-cost resolution requirement — FDIC must choose the resolution method least costly to the DIF)
• 12 U.S.C. § 5384 — Orderly liquidation of covered financial companies (upon determination of systemic risk by Treasury Secretary, Fed, and FDIC, the FDIC may be appointed receiver for a systemically important financial company; designed to resolve "too big to fail" firms without taxpayer bailout)

How It Works

The FDIC is one of the most successful government programs in American history — since its creation in 1933, no depositor has lost a penny of insured deposits. But deposit insurance is only part of the FDIC's role; it's also the nation's bank failure resolution authority, responsible for managing the orderly closure of failed banks and protecting the financial system.

Every account at an FDIC-insured bank is protected up to $250,000 per depositor, per insured bank, per ownership category under 12 U.S.C. § 1821. Ownership categories — single accounts, joint accounts, IRAs, trust accounts, business accounts, and government accounts — can be stacked: a couple can achieve up to $1 million in coverage at a single bank through two single accounts ($250,000 each) and a joint account ($500,000). Coverage is funded by premiums paid by insured banks to the Deposit Insurance Fund (DIF), not taxpayer dollars; the DIF targets a reserve ratio of 2% of insured deposits, currently approximately $129 billion. When a bank fails — typically when regulators determine it is insolvent or critically undercapitalized — the FDIC is appointed receiver. Its preferred resolution method is purchase and assumption (P&A): a healthy bank acquires the failed bank's deposits and assets, often over a weekend, so depositors wake up Monday at a new bank with no interruption to service. When no acquirer is available, the FDIC conducts a deposit payoff — paying each insured depositor directly and liquidating assets over time — or creates a bridge bank, a temporary FDIC-operated institution that continues banking operations while a permanent resolution is arranged.

The FDIC must select the resolution method least costly to the Deposit Insurance Fund — a requirement enacted after the savings and loan crisis to prevent sweetheart deals. However, a systemic risk exception allows deviation when the Secretary of the Treasury (consulting the President and acting on recommendation of the FDIC and Federal Reserve) determines that least-cost compliance would have "serious adverse effects on economic conditions or financial stability." This exception was invoked during the 2008 financial crisis for Wachovia and Citigroup, and again in March 2023 for Silicon Valley Bank and Signature Bank, protecting all depositors — including those above $250,000 — when regulators determined that failing to do so would trigger broader bank runs. The Dodd-Frank Act created a complementary tool: the Orderly Liquidation Authority (OLA), which empowers the FDIC to be appointed receiver for systemically important nonbank financial companies in danger of default, winding them down in an orderly manner that imposes losses on shareholders and unsecured creditors rather than taxpayers, with any FDIC borrowing repaid through assessments on the financial industry. Dodd-Frank also requires large bank holding companies and designated systemically important financial companies to submit annual resolution plans ("living wills") to the FDIC and Federal Reserve — detailed plans for how the company could be resolved under bankruptcy without government assistance — which regulators review and can require to be revised if they find the plans not credible.

How It Affects You

State Variations

Implementing Regulations

• 12 CFR Part 303 — FDIC filing procedures (§§ 303.220, 303.230 — Section 19 applications for individuals with criminal convictions, denial procedures)

• 12 CFR Part 308 — FDIC rules of practice and procedure (§§ 308.125, 308.16 — temporary suspension of deposit insurance, FDIC examination authority)

• 12 CFR Part 313 — FDIC administrative enforcement (§§ 313.41, 313.45 — notice requirements, certification of debt by FDIC as creditor agency)

• 12 CFR Part 324 — FDIC capital adequacy standards (implementing Basel III for state non-member banks). Key provisions:

  • § 324.10 — Minimum capital ratios: Common Equity Tier 1 (CET1) at least 4.5%; Tier 1 capital at least 6%; Total capital at least 8%; Leverage ratio at least 4% (ratio of Tier 1 to average total consolidated assets)
  • § 324.11 — Capital conservation buffer: an additional 2.5% CET1 buffer above the minimum ratios. Banks that fall below the buffer face restrictions on capital distributions (dividends, share repurchases) and discretionary executive bonuses — the restrictions scale from 60% to 100% payout limitation depending on how far below the buffer the bank is. Countercyclical capital buffer of up to 2.5% CET1 may be imposed during periods of excess aggregate credit growth.
  • § 324.12 — Community Bank Leverage Ratio (CBLR) framework: a qualifying community banking organization (total assets < $10 billion, limited off-balance-sheet exposures, limited trading activities) may elect to use a simplified 9% leverage ratio — if it maintains this ratio, it is presumed to meet all risk-based capital requirements and is not required to calculate risk-weighted assets. This substantially reduces compliance burden for community banks.
  • Subpart D (§§ 324.20–324.90) — Standardized approach risk weights: 0% for U.S. Treasuries and FDIC-guaranteed assets; 20% for interbank deposits and most GSE-backed securities; 50% for qualifying residential mortgage first liens; 100% for most commercial loans, unsecured consumer loans, and equity exposures; 150% for past-due exposures; 250% for significant investments in unconsolidated financial institutions.
  • §§ 324.401–324.405 (Subpart H) — Prompt Corrective Action (PCA) capital categories and mandatory supervisory responses:
    • Well capitalized: CET1 ≥ 6.5%, Tier 1 ≥ 8%, Total ≥ 10%, Leverage ≥ 5% (no additional restrictions)
    • Adequately capitalized: meets minimums but not well capitalized thresholds (restricted from brokered deposits without waiver)
    • Undercapitalized: fails any minimum in § 324.10 — mandatory suspension of dividends and management fees; capital restoration plan required within 45 days; asset growth restrictions; FDIC approval required for acquisitions
    • Significantly undercapitalized: CET1 < 3%, Tier 1 < 4%, Total < 6%, or Leverage < 3% — enhanced mandatory actions including compensation restrictions; FDIC may compel recapitalization or merger
    • Critically undercapitalized: tangible equity ≤ 2% of total assets — FDIC must generally appoint a receiver or conservator within 90 days

• 12 CFR Part 150 — Liquidation of savings associations (§§ 150.310, 150.520 — uninsured deposits, receivership or voluntary dissolution)

• 12 CFR Part 370 — Recordkeeping for Timely Deposit Insurance Determination: the FDIC rule requiring large insured depository institutions to maintain information technology systems and records capable of calculating deposit insurance coverage for every account within 24 hours of the FDIC being appointed receiver — enabling rapid payout of insured deposits if a large bank fails:

  • § 370.2 — Covered institutions: applies to insured depository institutions with 2 million or more deposit accounts — a threshold that captures large retail banks and excludes smaller community banks; these large institutions have the most complex account structures (joint accounts, revocable trusts, retirement accounts, government accounts) that require the most sophisticated systems to calculate coverage correctly and quickly
  • § 370.3 — IT system requirements: a covered institution must configure its information technology systems to be capable, within 24 hours of FDIC appointment as receiver, of: (1) calculating the deposit insurance coverage for each deposit account; (2) identifying ownership categories for all accounts (individual, joint, payable-on-death, trust accounts, retirement accounts, government accounts, etc.); (3) ascertaining each account holder's total insured deposits across all account ownership categories; and (4) producing data files in FDIC-required format for the FDIC to use to initiate insurance payments — this 24-hour clock replaced the historical baseline where some large bank failures required weeks to pay insured depositors
  • § 370.4 — Recordkeeping requirements: covered institutions must maintain in their deposit account records, for each account, the information necessary for their IT system to perform the 24-hour coverage calculation — including account holder names, ownership category designations, beneficiary information for payable-on-death accounts, and trust account documentation; this means maintaining real-time, complete records, not just transaction history
  • § 370.5 — Pass-through accounts (brokered and pooled deposits): deposit accounts with "transactional features" where the account holder is not the beneficial owner (omnibus brokered deposit accounts, money market mutual fund sweep accounts, benefit administration platforms) require the covered institution to either maintain records identifying each beneficial owner and their deposit amounts, or take steps to obtain that information promptly on failure; this provision targets one of the hardest problems in large bank resolution — brokered deposits held in omnibus accounts where the underlying beneficial owners (millions of individuals) are recorded only at the broker, not at the bank
  • § 370.7 — Accelerated implementation for troubled banks: the FDIC may shorten the compliance deadline for a bank that receives a CAMELS composite rating of 3, 4, or 5 — directing the bank to expedite its IT and recordkeeping compliance given the elevated probability of failure; this allows FDIC to ensure the most at-risk banks are ready for rapid payout before they fail
  • § 370.10 — Certification of compliance: covered institutions must submit annual certifications to the FDIC confirming compliance with the rule's IT and recordkeeping requirements, along with a deposit insurance coverage summary report; the certification creates accountability and gives FDIC visibility into which large banks may have gaps in their systems

  Part 370 was finalized in 2016 in response to lessons from the 2008 financial crisis, when the resolution of large failed institutions like IndyMac took extended time to pay insured depositors because of data quality issues. The 2023 bank failures (Silicon Valley Bank, Signature Bank) renewed focus on Part 370's importance — SVB and Signature were large enough to be covered by Part 370, and the FDIC was able to make insured depositors whole within days. The uninsured deposit problem (which drove the systemic risk exception decision) was distinct from the Part 370 mechanical problem — Part 370 addresses speed of payout for insured deposits, not the policy decision about protecting uninsured ones.

• 12 CFR Part 337 — Unsafe and Unsound Banking Practices: the FDIC's conduct rules for insured state nonmember banks governing practices linked historically to bank failures — most importantly, the brokered deposit restrictions and interest rate caps for undercapitalized institutions. Key provisions:

  • § 337.6 — Brokered deposits: brokered deposits (deposits obtained through deposit brokers who shop rates among banks) are treated as a risk factor correlated with bank failures because distressed banks sometimes bid aggressively for brokered deposits to fund risky loans. The rule creates a tiered access system: (1) Well-capitalized institutions may accept brokered deposits without restriction; (2) Adequately capitalized institutions may not accept brokered deposits unless they obtain a waiver from the FDIC; (3) Less-than-adequately capitalized institutions may not accept brokered deposits at all, regardless of waiver. The brokered deposit restriction is an automatic consequence of capital deterioration — no regulatory action required. The FDIC's 2021 brokered deposits final rule (86 FR 6745) modernized the definition, creating safe harbors for bank-established deposit programs (reciprocal deposits up to $5 billion for well-capitalized banks) and clarifying treatment of fintech partnerships and deposit-taking networks.
  • § 337.7 — Interest rate restrictions: even where a bank may accept deposits, less-than-well-capitalized institutions face a cap on the rates they can pay. The national rate cap is the higher of: (a) the national average rate (weighted average paid by all insured depository institutions and credit unions) plus 75 basis points, or (b) 120% of the current yield on a Treasury obligation of comparable maturity plus 75 basis points. The national rate is published weekly by the FDIC for CDs (1-month, 3-month, 6-month, 12-month, 24-month, 36-month, 48-month, 60-month), savings, interest checking, and money market accounts. A bank that is less than well capitalized and operating in a "high-rate area" (where local competition pushes deposit rates above the national cap) may apply to the FDIC for a higher local market rate cap. The interest rate restriction prevents weakened banks from paying above-market rates to attract new deposits — a classic "gambling for resurrection" strategy where insolvent banks fund high-risk assets with costly deposits, exposing the deposit insurance fund to losses.
  • § 337.3 — Insider lending: FDIC-supervised institutions (state-chartered, non-Fed-member banks) are subject to the Federal Reserve's Regulation O (12 CFR Part 215) insider lending restrictions — same arm's-length requirements, aggregate limits, and board approval thresholds — with one FDIC modification to the board approval threshold for loans to principal shareholders.

  Together, §§ 337.6 and 337.7 form the FDIC's "deposit discipline" framework: as a bank's capital deteriorates, its access to deposits is progressively restricted and its cost of remaining deposits is capped, reducing the ability to fund risky growth. Both restrictions expire automatically if the bank returns to well-capitalized status.

• 12 CFR Part 1009 — Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance (Regulation I): the CFPB rule implementing 12 U.S.C. § 1831t to protect consumers from depositing money at institutions that are not FDIC-insured without realizing it. The rule applies to any bank, savings association, or credit union that lacks Federal deposit insurance — primarily state-chartered institutions that operate without FDIC or NCUA coverage. Key provisions:

  • § 1009.3 — Disclosures in periodic statements and account records: every statement, signature card, passbook, and certificate of deposit must include a clear and conspicuous notice that the institution is not federally insured and that if it fails, "the Federal Government does not guarantee that you will get your money back"; the sample language in the rule is designed to be self-executing — using it satisfies the requirement
  • § 1009.4 — Disclosures in advertising and on the premises: a compliant notice must appear at every deposit-taking station and window, at the principal place of business and all branches, on the institution's main website, and in all advertising (with exceptions for small utilitarian items like pens and calendars that don't promote specific products); the notice must be in a simple, easy-to-understand format — no legalese
  • § 1009.5 — Written acknowledgment from depositors: before a depositor opens an account, the institution must obtain the depositor's written acknowledgment that the institution is not federally insured and that they understand deposits are not backed by the U.S. government; this pre-account-opening acknowledgment requirement addresses the core risk — depositors who don't read periodic disclosures are still protected by the requirement to sign before the account opens
  • § 1009.6 — Enforcement: the CFPB and other appropriate regulators enforce this rule; state banking authorities may enforce it against state-chartered institutions in their jurisdictions

  Regulation I is largely invisible to consumers at federally insured institutions — the vast majority of American banks and credit unions. It becomes significant for state-chartered private credit unions, cooperative financial institutions, and new fintech charters in states without mandatory federal insurance. Any fintech or neobank that accepts deposits without FDIC partnership or pass-through insurance is subject to Regulation I's disclosure requirements.

• 12 CFR Part 325 — Stress Testing: the FDIC's Dodd-Frank Act stress testing rule for large state nonmember banks and state savings associations, implementing 12 U.S.C. § 5365(i)(2). The rule applies to state-chartered banks that are not Federal Reserve members (non-member state banks) with average total consolidated assets above $250 billion — capturing only the largest state-chartered institutions like Signature Bank and others in the mega-bank tier. Key provisions:

  • § 325.2 — Definitions: "covered bank" is any state nonmember bank or state savings association with more than $250 billion in average total consolidated assets (averaged from quarterly Call Reports); "severely adverse scenario" means a set of conditions significantly worse than baseline (large unemployment increase, sharp decline in asset prices, credit tightening); "planning horizon" is the 9-quarter forward-looking period over which projected financial impacts are estimated
  • § 325.3 — Applicability: a bank that first becomes "covered" (exceeds $250B) must begin stress testing in the first reporting year that starts more than three calendar quarters later; a bank that drops below $250B for four consecutive quarters ceases to be covered; bank subsidiaries of holding companies that are subject to Fed supervisory stress tests under 12 CFR Part 252 may satisfy FDIC reporting through the Fed's supervisory process, coordinating so the consolidated holding company results encompass the subsidiary bank
  • § 325.4 — Periodic stress tests required: covered banks use financial data as of December 31 of the prior year; the FDIC provides scenario descriptions (baseline and severely adverse at minimum) no later than February 15 of the reporting year; the stress test projects pre-provision net revenue, losses, provision for credit losses, net income, and capital ratios across the 9-quarter planning horizon under each scenario
  • § 325.6 — Report to FDIC and Federal Reserve: covered banks must report stress test results to both the FDIC and the Federal Reserve Board on or before April 5 of the reporting year; reports must include aggregate losses, revenue, provisions, net income, and pro forma capital ratios under each scenario, plus an explanation of the most significant drivers of capital ratio changes
  • § 325.7 — Publication of results: covered banks must publish a summary of stress test results between June 15 and July 15 of the reporting year; publication must occur no earlier than the date the Fed publishes parent holding company supervisory stress test results (for bank subsidiaries of holding companies); the public summary must include descriptions of the most significant risk types included in the test and estimates of losses, revenues, and capital ratios in the severely adverse scenario

  The $250 billion threshold was established by 2019 amendments (84 FR 56933) that raised the original $10 billion threshold following the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA, S. 2155), which directed the Fed and FDIC to recalibrate stress testing requirements. The threshold change eliminated mandatory FDIC stress testing for the vast majority of mid-size and large banks, leaving it only for megabank-scale institutions. Recent rulemakings: the 2019 revision (84 FR 56934) also aligned the publication window with the Fed's supervisory stress test disclosure schedule to prevent market distortions from staggered disclosures.

• 12 CFR Part 381 — Resolution Plans (Living Wills): the joint FDIC/Federal Reserve rule implementing Dodd-Frank Act § 165(d) (12 U.S.C. § 5365(d)), which requires large financial companies to submit periodic resolution plans — detailed roadmaps describing how the company could be resolved under the U.S. Bankruptcy Code without systemic disruption or government assistance. Resolution plans are colloquially called "living wills" because they document how a firm would wind down in failure. The rule applies to two categories of firms:

  • Biennial filers (§ 381.4(a)): global systemically important bank holding companies (G-SIBs — the eight U.S. banks designated as globally systemic) and FSOC-designated nonbank financial companies must file a full resolution plan every two years; these firms are considered to pose the greatest systemic risk and require the most comprehensive planning
  • Triennial full filers (§ 381.4(b)): Category II–IV banking organizations (banks with $100 billion or more in total assets, but below G-SIB designation) must file a full plan every three years, alternating with targeted plan submissions in off years; the tiered filing schedule balances the compliance burden on large but not G-SIB-sized firms against the regulatory need for credible resolution planning
  • § 381.3 — Critical operations identification: biennial and triennial full filers must identify their "critical operations" — operations whose failure or discontinuation would have a serious adverse effect on the financial stability of the United States; this is the analytical core of the resolution plan — the firm must demonstrate it understands which of its activities are systemically important and how to preserve or wind them down; critical operations typically include payment clearing and settlement functions, custody and securities services, market-making in key markets, and deposit-taking
  • § 381.5 — Full plan content: a full resolution plan must include: (1) a description of the firm's organizational structure, material entities, and business lines; (2) a description of core business lines that if discontinued would materially impact revenue or the firm's franchise value; (3) information on interconnections and interdependencies among material entities; (4) a description of management information systems; (5) a description of strategies for orderly resolution under bankruptcy, including the approach to liquidity, loss absorbency (bail-in), continuity of critical operations, and separation of operations; and (6) actions the firm would take to facilitate implementation of the preferred resolution strategy
  • § 381.6 — Targeted plans: a targeted plan is a subset of a full plan and includes the core resolution strategy elements but excludes certain subsidiary information; targeted plans are filed in alternating years by triennial filers; they allow regulators to track year-over-year changes in the resolution strategy without requiring the full documentation burden annually
  • § 381.8 — Deficiency notices: if regulators jointly determine that a resolution plan is not credible or would not facilitate orderly resolution, they issue a notice of deficiency identifying the plan's shortcomings; the firm has the opportunity to respond; failure to cure a deficiency can lead to regulatory escalation
  • § 381.9 — Restrictions and divestiture orders: if a firm fails to cure a resolution plan deficiency, regulators may impose additional capital, leverage, or liquidity requirements on the firm; in extreme cases, regulators may order the firm to divest assets or operations — the nuclear option that has rarely been formally invoked but has been threatened as leverage to compel improved planning
  • § 381.11 — Confidentiality: resolution plans contain highly sensitive information about a firm's internal structure, vulnerabilities, and resolution strategy; they are treated as confidential supervisory information and are not disclosed to the public; the firm is required to publish a public section of its plan containing a summary of the resolution strategy in non-sensitive terms

  The resolution planning regime was one of the most consequential post-2008 financial reforms. The first-generation plans (2012–2015) were roundly criticized by the FDIC and Fed as not credible; regulators found that the firms' proposed resolution strategies assumed continued availability of funding, counterparty relationships, and infrastructure that would not survive the firm's stress. The regulatory pressure generated by deficiency notices drove the adoption of clean holding company structures (where the parent holds loss-absorbing debt that can be bailed in), single-point-of-entry resolution strategies (resolving at the holding company level rather than cascading bankruptcy through subsidiaries), and substantial liquidity pre-positioning across material entities. Recent rulemaking: the 2023 joint final rule (88 FR 64588, September 2023) updated requirements for biennial filer plans, strengthened expectations for demonstrating operational readiness for resolution, and increased requirements around payment, clearing, and settlement continuity.

• 12 CFR Part 348 — Management Official Interlocks: the FDIC's implementing regulations for the Depository Institution Management Interlocks Act (DIMIA) (12 U.S.C. §§ 3201–3208), which prohibits the same person from simultaneously serving as a management official at two unaffiliated depository organizations when both operate in the same geographic market or when either is very large. The interlocks prohibition prevents competitors from sharing board members or senior executives in ways that could facilitate coordination on pricing, terms, or competitive strategy:

  • § 348.3 — Prohibitions: two distinct interlocks prohibitions: (a) Community prohibition — a management official of a depository organization may not simultaneously serve as management official of an unaffiliated competitor if both organizations (or their offices) are in the same city, town, or village; (b) Major asset prohibition — regardless of geography, a management official may not simultaneously serve at two unaffiliated depository organizations if either organization has total assets exceeding $2.5 billion (adjusted periodically for inflation); the prohibitions apply to directors, officers, and other management officials including those with policy-making authority; affiliated organizations (bank holding company and its bank subsidiary) are exempt from the prohibitions
  • § 348.4 — Statutory exemptions: the prohibitions do not apply when: (a) a small organization (assets below a regulatory threshold) is involved; (b) a depository organization is newly chartered and less than 2 years old; (c) the interlock arises from a change in the charter or corporate structure of an existing organization; or (d) the service is authorized by the primary federal regulatory agency of one of the depository organizations
  • § 348.5 — Small market share exemption: an interlock that would otherwise be prohibited is permissible if the combined market share of deposits in any relevant market held by the two organizations is less than 20%, and neither organization holds more than a de minimis share individually; this exemption is important for community bank situations where two small institutions share a director who provides expertise and guidance to institutions that lack the scale to attract dedicated board members
  • § 348.6 — General exemption: the FDIC may by agency order exempt a specific interlock from the prohibitions if the interlock would not result in a monopoly or substantially lessen competition; this case-by-case exemption authority allows the FDIC to accommodate unusual circumstances (geographic isolation, specialized expertise needs, de novo banks) where a rigid prohibition would be counterproductive
  • § 348.7 — Change in circumstances: if a change in circumstances (merger, asset growth, geographic expansion) causes an existing management official's service to become prohibited, the official must terminate the conflicting service or apply for an exemption; the rule gives the official a reasonable period to cure the interlock before enforcement action
  • § 348.8 — Enforcement: the FDIC administers and enforces DIMIA for FDIC-supervised institutions and may refer cases to the Department of Justice for criminal enforcement; the Fed enforces for Fed-member state banks and bank holding companies; the OCC enforces for national banks; coordination among regulators is required for interlocks spanning different charter types

  The interlocks restrictions are often overlooked in bank governance compliance programs but matter significantly in concentrated regional markets where a small number of directors serve on multiple community bank boards. The $2.5 billion asset threshold means that interlocks between mid-size and larger banks require specific regulatory exemption or the termination of the conflicting service. For a director who sits on two boards and one bank grows above the threshold, the interlock becomes prohibited — creating potential liability for the director and the institution if not addressed promptly. No major recent rulemaking — the DIMIA framework and FDIC's implementing regulation have been stable; the $2.5 billion threshold was last adjusted to reflect inflation in the early 2000s.

Pending Legislation

• S 3734 — Tighten FDIC authority over industrial banks/parents, stricter deposit-insurance applications. Status: Introduced.
• HR 6550 — Force Fed/OCC/FDIC to publish annual reports on global financial standard-setting participation. Status: In committee.
• HR 6555 — Joint OCC/FDIC/Fed study of shelf charters and modified bidder process for bank resolutions. Status: In committee.
• S 4050 — Let FDIC recover executive pay from failed banks over $10B, broaden liquidation authority. Status: Introduced.
• HR 8087 — Provide deposit insurance for noninterest-bearing transaction accounts. Status: Introduced.
• HR 8088 — Update inflation adjustment for deposit/share insurance. Status: Introduced.
• HR 8090 — Require FDIC/NCUA analysis on whether insurance coverage should be raised. Status: Introduced.
• HR 6547 — Let FDIC use costlier fixes to avoid expanding GSIBs, caps and buyer fees. Status: In committee.
• HR 4551 (Rep. Waters, D-CA) — Temporary full FDIC/NCUA coverage for business transaction accounts up to $100M. Status: Introduced.
• HR 3446 (Rep. Huizenga, R-MI) — Cap FDIC board service at 12 years, require small-bank experience. Status: In committee.

Recent Developments

• The 2023 bank failures (Silicon Valley Bank, Signature Bank, First Republic) resulted in systemic risk exception invocations, full depositor protection, and creation of the Bank Term Funding Program
• The FDIC is rebuilding the DIF after the 2023 special assessments of $16 billion on large banks
• Deposit insurance coverage adequacy is being debated — proposals range from unlimited insurance for business/payroll accounts to targeted increases above $250,000
• FDIC supervision of mid-size banks has been strengthened following the 2023 failures, with attention to interest rate risk and concentrated uninsured deposits
• Resolution planning ("living wills") for large banks continues to evolve, with regulators increasing requirements for credible plans
• In March 2026, the Federal Reserve published notices of formations, acquisitions, and mergers of bank holding companies, and the OCC renewed its information collection on general reporting and recordkeeping requirements for savings associations.
• In March 2026, the FDIC proposed adjustments to regulatory thresholds under Part 363, updating asset-size requirements for independent audit and reporting obligations for insured depository institutions with $500 million or more in consolidated assets.