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4000 - Advisory Opinions

FDIC Insurance Fund Backed by Full Faith and Credit of the United States Government


December 17, 1987

Alan J. Kaplan, Counsel

Thank you for your letter of December 11, which asks what responsibility the United States Government has should the Federal Deposit Insurance Corporation (FDIC) run out of funds.

The FDIC, an agency of the United States government, receives no government appropriations; instead, FDIC's funding consists of its income obtained from insurance assessments and from the return on investments made in government securities. At present, FDIC's insurance fund exceeds $18 billion. For 1986, assessment income was $1.5 billion and other income was $1.8 billion. The FDIC also is authorized to borrow up to $3.0 billion from the Treasury, although it has never used this authority.

Title IX of the Competitive Equality Banking Act of 1987, signed into law by President Reagan on August 10, 1987, serves as a reaffirmation by Congress that the United States pledges its full faith and credit behind the federal deposit insurance funds. Thus, although the FDIC's deposit insurance fund remains strong, Congress has expressed its intention to support the fund, should the need ever arise.

A copy of Title IX is enclosed.

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