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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.

Annual Meeting

Associations are required to hold annual membership meetings to elect directors as set forth in the association’s bylaws. See also, Elections. If the board fails to hold an annual membership meeting within 60 days after the date designated in the governing documents or within 15 months of the association’s last regular meeting, any member can file a petition in superior court to have the court order a meeting. (Corp. Code § 7510(c)) The existing board members shall hold office until a successor has been elected and qualified. (Corp. Code §7220(b))

Association

This is the entity charged with the management and operation of a common interest development. (Civ. Code §4080) Associations are representative governments in which members typically have the right only to elect the board and make major decisions such as document amendments, imposing assessments that exceed statutory limits on the board’s power, etc. Otherwise, association boards typically have the right to make most day-to-day decisions. Also see Homeowners Association.

Borrowing from Reserves

Reserves are intended to fund the maintenance, repair, restoration and replacement of the major components an association is responsible for under its governing documents. Civil Code section 5515 authorizes an association to borrow money from a reserve account for up to one year to cover a short-term cash-flow deficit provided certain requirements are met.

Clubhouse

An association’s governing documents generally provide that every member of the association shall have a non-exclusive easement for use and enjoyment of the common area, including, but not limited to the clubhouse. Essentially this means that while every member of the association has equal access rights to the common area and clubhouse, they may not prevent other members from using these facilities simultaneously. An individual owner’s use of the common area and clubhouse may be regulated by an association. For example, the association’s governing documents may provide the association has the right to reasonably restrict the number of guests of owners using common area facilities. Further, governing documents generally provide an association has a right to establish rules and regulations pertaining to the use of common area facilities. If not already provided for in its governing documents, an association should consider including a requirement that individuals requesting to use the clubhouse facilities for a private event must enter into an indemnity agreement in order to help insulate the association from liability during this event.

Conflict of Interest

The Davis-Stirling Act now includes a section pertaining to conflicts of interest involving both directors and committee members. (Civ. Code §5350) Specifically directors and committee members may not vote on: (1) their own discipline; (2) an assessment against themselves for damage to the common area or facilities; (3) their own request for a payment plan for overdue assessments; (4) a decision whether to foreclose on a lien on their own separate interest; (5) a review a proposed physical change to their own separate interest; or, (6) a grant of exclusive use common area to themselves.