The FDIC is divided up into seven divisions, or groups. Each division provides a valuable service and helps the FDIC do its job!
The field staff of FDIC's Division of Supervision and Consumer Protection (DSC) is responsible for conducting both off-site reviews and on-site examinations of financial institutions. DSC examiners do much more than simply review bank files to verify that the institution's management is running a safe and sound business. There are examination specialists who test computer systems. Others conduct specialized portfolio reviews keyed to the institution's defined business strategy. The integrity of accounting systems and adequacy of internal controls also are examined by DSC specialists. Each bank obtains a rating by the examiners. It is the examiner judgment behind this rating that is relied upon to determine whether a bank is sound or a potential failure, or if an enforcement action is necessary to correct improper banking practices.
DSC also has specialists called "Compliance Examiners" who review bank compliance with federal laws and regulations intended to promote consumer protection, fair lending and community reinvestment. Compliance Examiners, for example, determine whether banks are engaging in racial or ethnic discrimination in their loan programs. DSC also operates a consumer hotline. Hotline specialists provide consumers with information on deposit insurance protection and will help callers determine where to file a complaint if they feel their bank is not treating them properly.
The Division of Resolutions and Receiverships (DRR) is the part of the FDIC that is called into action when a bank or savings institution is identified as a potential failure. The DRR staff prepares a detailed financial profile of the failing institution. Potential bidders who might be interested in assuming responsibility for servicing the deposits are identified and invited to submit an offer. If the institution does fail, the deposits are usually transferred to another financial institution and service to customers continues without interruption. If no bank or savings institution wants to assume responsibility for the deposits, DRR pays depositors their money directly, including interest earned. DRR then begins selling the failed bank's loans and other assets to recover funds disbursed by the FDIC to depositors.
The FDIC also has a large legal staff. The Legal Division's lawyers draft regulations and prepare enforcement actions in support of the bank supervision and consumer protection programs. They also prepare contracts for services obtained by the FDIC, assist DRR in their asset sales activities, and help the FDIC manage its own corporate affairs. The lawyers also oversee the FDIC's litigation. The caseload grows dramatically when there are a significant number of bank failures because the FDIC inherits any litigation the bank was engaged in and also must pursue borrowers who defaulted on their loans.
Evaluating economic conditions in the country and how they might affect performance of the banking industry is a task performed by the Division of Insurance and Research. Economists, statisticians and other financial specialists in this division monitor the stock and commodities markets, home sales and business activity around the country. Trends are evaluated, and the Division of Insurance and Research attempts to predict bank failure activity. This information is used by FDIC managers in their assessment of staffing needs and in the establishment of bank examination priorities.
The remaining three divisions provide the services and expertise necessary to keep the FDIC running.
Housing the FDIC staff, purchasing equipment and services, hiring new employees and providing other corporate support is the job of the Division of Administration. The Division of Finance (DOF) manages the FDIC's money and its accounting systems. DOF also audits banks to ensure correct deposit insurance premiums are being paid to the FDIC. The Division of Information Technology (DIT) oversees the development and operation of the FDIC's computer systems and software. DIT maintains the FDIC's communication network and provides the expertise necessary for developing new information management systems needed by the FDIC's bank examiners, researchers, legal case managers and finance officers.