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.


Every analysis of maintenance and repairs responsibilities for balconies should begin with consideration of Civil Code section 4775(a). Pursuant to Section 4775(a), an association must maintain and repair the common areas and the individual owner must maintain and repair their separate interest and exclusive use areas. In a condominium association, everything in the community is either common area or part of a unit. Therefore, it is important to know the dividing line between the two. This question is generally answered in the CC&Rs and the condominium plan for your community. In general, the structural elements of a balcony are almost always the responsibility of the association to maintain.

Commingled Funds

Generally speaking, association funds that are representative of different financial accounts should be kept separate and distinct. For example, the general operating fund should be kept in a separate bank account from reserve funds. This procedure creates clear paper trails and may reduce the chances for embezzlement. The Civil Code specifically states that managers for associations may never commingle funds from difference associations.

Derivative Actions

A lawsuit brought by a shareholder of a corporation on behalf of the corporation to enforce or defend a legal right or claim, which the corporation has failed to do. Derivative actions in the context of homeowners associations are lawsuits brought by a member of the association, typically against a member of the board of directors or the entire board of directors, to enforce a legal right of the members of the Association that the board has failed to do or for malfeasance against the board or board member. The person bringing the derivative action cannot allege or recover damages on behalf of him or herself.


Before a purchaser or owner seeking refinancing in a condominium project can obtain a federally insured loan, the project must be approved for FHA by the Department of Housing and Urban Development. Excepted from the requirement are projects where no portions of the individual condominium units abut one another. To qualify for FHA, a project must satisfy a number of requirements, including requirements related to occupancy, solvency and insurance.

Meetings, Member

Member meetings include annual (e.g., election of directors) or special meetings (e.g., recall). An association’s bylaws generally state the time, location, frequency and quorum requirement for member meetings. Corporations Code section 7511(a) requires between 10 and 90 days’ notice of a member meeting, but Civil Code section 5115 changes this to at least 30 days’ notice for the ballot period. At member meetings, the members (not the board) vote on the items of business.

Payment Plans

Payment plans can be effective in collecting delinquent assessment accounts, and are something boards should consider. It is advisable to ensure that the debt is secured by a lien unless it is a very small amount, and to make the payments manageable, but in an amount to reduce the debt in no more than a year where feasible.