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.

Amendment

The act of altering a governing document. With some exceptions, the amendment of CC&Rs and bylaws requires a member vote, while the board has the authority to amend rules. The percentages of member consent required for amendment are normally set forth in the governing documents themselves. Occasionally the consent of persons or entities other than the members (e.g., lenders) is required as well. The Davis-Stirling Act also contains a procedure for application to the Superior Court for approval of a proposed CC&R amendment when sufficient owner consents cannot be obtained. (Civ. Code §4275)

Cable Television

Depending on the provisions of an association’s governing documents, an association can enter into cable contracts without membership approval. Bulk cable contracts provide a reduced rate for cable services. Even if the board has authority to enter into a cable contract for the entire community, member approval may be required if the term of the contract exceeds any service contract term limits in the governing documents.

Contractors

Most construction or repair work with a value over $500 must be performed by a contractor that is properly licensed (Bus & Prof. Code 7028 and 7048). A summary of the licenses issued by the State of California, and the work that can be performed by a person holding each type of license can be found at www.cslb.ca.gov. A check of this website should be made before any contract is signed to ensure that the Association is working with a person or company lawfully entitled to do the work and that the license is active and valid.

Easements

An easement is an incorporeal interest in the land of another that gives the easement holder the right to use the other’s land or to prevent the other person from using the land. Easements can be created in many ways, including by deed, agreement, CC&Rs, through necessity, hostile use (prescription), and through petitioning the court to exercise it equitable powers. The owner of the land usually retains the right to use the land encumbered by the easement to the extent that such use does not unreasonably interfere with the easement holder’s use. Easements frequently give rise to disputes concerning what may be done in the easement by the easement holder and the land owner, whether the easement is being overburdened, who must maintain and repair the easement area, and who must share in the cost of that work.

Good Standing

A term of no fixed meaning generally construed in associations to refer to compliance with governing documents. Thus an owner who is in default on payment of assessments, or in violation of the governing documents, may be said to be “not in good standing.” However, because the term is not defined by statute, a clear definition within the governing documents is advisable. A finding that an owner is “not in good standing” may require prior notice and a hearing.

Nonprofit Corporation

Most, but not all, CIDs are incorporated as nonprofit corporations. Most are nonprofit mutual benefit corporations under Corporations Code section 7110 et seq. A very small number of large, typically master, associations may be nonprofit public benefit corporations under the public benefit corporation law, Corporations Code section 5110 et seq.