The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $250,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails.

An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of a failure.

The FDIC receives no Congressional appropriations – it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. The FDIC insures trillions of dollars of deposits in U.S. banks and thrifts – deposits in virtually every bank and thrift in the country.

The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC’s Electronic Deposit Insurance Estimatorcan help you determine if you have adequate deposit insurance for your accounts.

The FDIC insures deposits only. It does not insure securities, mutual funds or similar types of investments that banks and thrift institutions may offer. (Deposit Insurance: What’s Covered distinguishes between what is and is not protected by FDIC insurance.)

The FDIC directly examines and supervises about 4,000 banks and savings banks for operational safety and soundness, more than half of the institutions in the banking system. Banks can be chartered by the states or by the federal government. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System. In addition, the FDIC is the back-up supervisor for the remaining insured banks and thrift institutions.

The FDIC also examines banks for compliance with consumer protection laws, including the Fair Credit Billing Act, the Fair Credit Reporting Act, the Truth-In-Lending Act, and the Fair Debt Collection Practices Act, to name a few. Finally, the FDIC examines banks for compliance with the Community Reinvestment Act (CRA) which requires banks to help meet the credit needs of the communities they were chartered to serve.

To protect insured depositors, the FDIC responds immediately when a bank or thrift institution fails. Institutions generally are closed by their chartering authority – the state regulator, or the Office of the Comptroller of the Currency. The FDIC has several options for resolving institution failures, but the one most used is to sell deposits and loans of the failed institution to another institution. Customers of the failed institution automatically become customers of the assuming institution. Most of the time, the transition is seamless from the customer’s point of view.

The FDIC is headquartered in Washington, D.C., but conducts much of its business in regional and field offices around the country.

The FDIC is managed by a five-person Board of Directors, all of whom are appointed by the President and confirmed by the Senate, with no more than three being from the same political party.


For more information, visit: https://www.fdic.gov/


A license is an authorization given by the owner of land to another to perform an act or acts on the owner’s property. The owner’s permission may be expressed or implied. The license is a personal privilege; it is not an interest or right in the land. Generally, licenses are revocable at will by the land owner. The classic license is personal to the license holder and cannot be transferred, assigned, conveyed, or inherited. Written license agreements frequently blur the line between easements and licenses.


Disputes large and small are a regular part of life in homeowner associations. While always prepared to litigate, Epsten believes it is preferable to settle many disputes through quicker and less costly methods, including negotiation and mediation. Experience has shown that the results of mediation can be effective and satisfying. Mediation can be the fastest, most-effective solution to conflicts between homeowners and homeowners in conflict with their association.

In mediation, the disputing parties present their problem to a neutral third person who is an experienced mediator. Investigation and documentation of the complaint is made and the mediator conducts meetings to openly explore the opposing positions and guide negotiation between the parties. If the parties do not reach a compromise on their own, the mediator presents a resolution of the dispute that the parties can either accept or reject. While mediation is non-binding, studies have documented a success rate of 85% when a mediator is employed to settle a dispute.


The Americans with Disabilities Act (ADA) is one of the federal laws pertaining to accommodations for the disabled. See 42 USC 12101 et seq. Community associations are generally not subject to the ADA, except when some or all of the common areas are open to the public at large. However, community associations are subject to the Federal Fair Housing Amendments Act of 1988 (42 USC 3601 et seq.) which does provide protections for the disabled, as well as various state and local laws pertaining to the disabled. See also, “Fair Housing Laws.”

Attorneys’ Fees

Compensation for legal services performed by a lawyer or law firm personnel at the request of a client, in or out of court. Attorneys’ fees may be billed on an hourly, flat-rate or contingent fee. In litigation, attorneys’ fees are separate from fines, compensatory and punitive damages, and court costs. In the instance of a lawsuit, attorney fees are not paid by the losing party to the winning party except pursuant to specific statutory or contractual rights.

Business Judgment Rule

The business judgment rule mandates a director to perform his/her duties in good faith, in a manner such director believes to be in the best interests of the corporation, and with such care, including reasonable inquiry, as an ordinarily prudent person in a similar position would in similar circumstances. (Corp. Code § 7231(a)) In following this rule, a director will avoid personal liability for poor decisions. See also Civil Code section 5800.

Commercial Developments

“A ‘commercial or industrial common interest development’ means a common interest development that is limited to industrial or commercial uses by law or by a declaration of covenants conditions and restrictions that has been recorded….” “[C]ommercial use” includes, but is not limited to, the operation of a business that provides facilities for the overnight stay of its customers, employees, or agents.” Civ. Code §6531. Effective January 1, 2013, such developments are governed by the Commercial and Industrial Common Interest Development Act (Civ. Code §§ 6500-6875) rather than the Davis-Stirling Common Interest Development Act.

Consumer Product Safety Commission

The CPSC (www.cpsc.gov) is the independent federal agency regulating the manufacture and sale of thousands of consumer products ranging from barbecue grills to deck chairs to swimming pools. It also collects information on potential hazards associated with consumer products and has the power to order the recall of products already being sold.


Automatic external defibrillation devices (“AEDs”) have been required for “health studios” for some years. An unanswered question is whether the private gym facilities of an association fall under that definition. (Health & Safety Code §104113) For covered health studios, the owner of the studio is required to have trained personnel onsite for operation of the AED.

Due Process

When applied in the context of associations for common interest developments, due process refers to procedural due process, which mean using procedures that are fundamentally fair by following established laws and adopted operating rules and procedures, and by affording reasonable notice and an opportunity to be heard when provided for by either.