FDIC

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/

Licenses

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.

Mediation

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.

Accrual Accounting

This method of accounting recognizes economic transactions when they occur, regardless of when cash actually changes hands. The goal of this system is the matching principle, wherein revenues are matched to expenses at the time the transaction occurs, as opposed to when the cash receipt or disbursement actually occurs. While slightly more complicated than cash accounting, this method gives a more accurate picture of an association’s fiscal status.

Architectural Control

California law provides minimum steps for architectural review procedures. (Civil Code §4765) If an association’s governing documents require association approval before a physical change is made to a separate interest or the common area, the association must provide a fair, reasonable, and expeditious procedure for making its decision. See “Architectural Enforcement Procedures for Community Associations.”

Children

California Associations are subject to the Fair Housing Act (“FHA”) and Unruh Act (“Unruh”). Unruh prohibits age discrimination. FHA prohibits familial status discrimination. “Familial status” discrimination is discrimination against a minor who resides with a parent, legal guardian, or person having authorized custody of the child. Qualified senior communities are generally exempted from these prohibitions. Use restrictions and rules should be scrutinized to ensure they do not discriminate against children in content or application.

Completed Payment

Within 21 days of payment of the sums specified in the notice of delinquent assessment, the association shall record or cause to be recorded in the office of the county recorder in which the notice of the delinquent assessment is recorded, a lien release or notice of rescission and provide the owner of the separate interest a copy of the lien release or notice that the delinquent assessment has been satisfied. See Civil Code section 5685.

D&O Insurance

This stands for Directors and Officers Liability Insurance. D&O insurance is intended to defend and indemnify the directors and officers of an association and often the association itself, usually against claims made by other persons arising out of alleged losses or damage other than bodily injury or property damage and possibly other personal (non-bodily) injury losses, such as libel or slander, that are covered under the typical commercial general liability (“CGL”) insurance policy. For directors and officers to obtain the limitations against liability offered by Civil Code section 5800, associations must have D&O insurance in the amounts specified in the statute. See the Article, Insurance for Community Associations, for more information.

Discrimination

The unlawful denial of rights or privileges of membership or occupancy, usually based on “suspect classification” (i.e., on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, or genetic information).