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/

Federal National Mortgage Association

Common known as Freddie Mac, this enterprise was established by Congress to compete with Fannie Mae and provide banks with federal money to finance home mortgages. Freddie Mac purchases loans from lenders. It does not make loans directly to home buyers. Freddie Mac loans requirements can differ from Fannie Mae requirements and are subject to change.

Fees by Association

California law prohibits an association from charging a fee not directly related to a cost. Fees related to the cost of collecting delinquent assessments can be imposed by an association upon a delinquent owner and include late fees and interest charges in addition to reasonable costs of collection incurred.

Franchise Tax Board

To verify current address contact the Franchise Tax Board, Exempt Unit (916-845-4171). When filing the Association’s annual tax statements, you can update the address on those forms {nonprofit tax return (FTB Form 100); annual nonprofit information return (FTB Form 199)].


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.

Fidelity Bond

While the term “fidelity bond” is used in many, if not most, association governing documents, fidelity bonds have been replaced almost entirely with fidelity insurance, also known as crime or dishonesty coverage. Fidelity coverage, however it is provided, essentially protects an association against theft and other unexplained losses of money, securities or other property belonging to an association.

Fiduciary Duty

Having a fiduciary duty to another involves being in a position of confidence and trust. A director owes a fiduciary responsibility to the association and to all of its members. The director’s personal needs and desires must be put aside in favor of the director acting in good faith and in the best interests of the association and the entire membership. See Corp. Code section 7231 and Civil Code section 5800.

Financial Duties of Board

Board members have a variety of financial duties that they owe to the association. In addition to the annual budget and reserve duties, the board has an affirmative duty to review a current reconciliation of the association’s operating accounts, reserve accounts and bank statements on at least a quarterly basis. The board has many more financial duties than are listed here; contact an attorney for further information.