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.

Assessments

Every member of an association is obligated to pay a share of common expenses through payment of assessments. As an association is funded and operates using assessment income, collection of assessments is one of the most important functions a board can undertake. When assessments go unpaid, associations can suffer from deferred maintenance and other problems that can ultimately affect the value of property in the community.

Cigarette Smoke

Cigarette smoke is deemed a health hazard by various governmental agencies, and cigarette smoke that emanates from one area of association property to another constitutes a nuisance. Associations are increasingly taking steps, whether by CC&R amendment or rule adoption, to prohibit or restrict smoking in common areas, exclusive use areas and even inside units. The laws establishing smoke-free environments are evolving to support smoke-free condominium associations (at least in common areas).

Davis-Stirling Act

The Davis-Stirling Act was originally passed into law in 1985 with the purpose of creating, governing and guiding homeowners associations. After 28 years of amendments and revisions, the entire Act was re-codified on January 1, 2014. The Act serves as one of the set of laws governing the day-to-day activities of associations. In addition to the Act, the Corporations Code, Civil Code and other miscellaneous statutes provide the framework within which these associations operate.

Enforcement

Association boards have the duty to enforce governing documents. To be enforceable, enforcement must comply with the due process procedures in the governing documents (Civ. Code §5855 and Corp. Code §7341). This includes, minimally, providing at least 10 days’ advance notice to an owner of a hearing to consider whether to impose discipline (governing documents may require a longer notice period). Associations can be held liable for failure to enforce the governing documents.

Maintenance Duties

One vital aspect of association life is maintenance duties. These duties are generally described in the association’s CC&Rs. The CC&Rs will generally describe what components the association and owner, respectively, are responsible for maintaining, repairing and replacing. Many associations also have a maintenance matrix that clearly identifies components and who bears the responsibility.