If you've done much online banking, or even seen bank ads on TV, you might have noticed Member FDIC and Equal Housing Lender labels. Financial institutions certified as equal housing lenders conduct business in accordance with anti-discrimination laws that concern the financing of property based on race, religion, national origin, sex, handicap or familial status. It’s all about creating a fairer playing field and ensuring everyone has access to quality service.

There are two agencies that insure equal housing lenders, and at least one of those names might sound familiar. The Federal Deposit Insurance Corporation, or FDIC, is the agency that covers our own banking services. The second agency is called the National Credit Union Administration, and they perform the same service, but for credit unions. Central Bank’s affiliation with the FDIC means our clients’ deposits are safely insured by the federal government up to $250,000 per ownership account. Read on to learn more about the history of the FDIC and equal housing lenders, and how they benefit you as an account holder.

The Origin of the FDIC and Equal Housing Lenders
The FDIC was created in response to the Stock Market Crash of 1929, and it was part of the 1933 Banking Act. During the Great Depression, nearly half of banking institutions failed due to economic hardship and distrust in the U.S. financial system. Account holders were often quick to withdraw funds when the stability of their bank was in question, spurring widespread panic and many bank closures.

Government leaders knew they had to restore faith in the American banking system for our economy to recover from such a monumental downturn. The Banking Act established the FDIC as a temporary government corporation aimed at providing deposit insurance, funding short-term loans and regulating state banks. In 1935, the FDIC became a permanent agency of the government that continues to insure deposits and monitor the financial performance of its members.

Several decades later, the Fair Housing Amendment Act of 1988 introduced the concept of the equal housing lender. This law originated from the Civil Rights Act of 1968 and has since evolved to protect housing and mortgage loan candidates from discrimination. As a matter of fact, every bank insured by the FDIC is considered an equal housing lender or equal opportunity lender. You can read more about the FDIC law, regulations and related acts on their official website.

FDIC Membership Benefits
Membership in the FDIC is voluntary and requires banks to make premium payments to secure insurance coverage. In other words, the FDIC is not funded by the public because dues are paid directly by their banking institutions. Banking with an FDIC member means you’re doing business with a company that passes regular examinations of financial soundness and supervision over consumer protection functions.

The FDIC has a $100 billion line of credit with the U.S. Department of Treasury, which allows member institutions like ours to take out short-term loans as a safety net. This protects the bank as well as its investors and account holders. It’s important to note that since its origin in 1933, not a single depositor has lost FDIC-insured funds.

Account Coverage and Services
Today, the FDIC insures deposits up to $250,000 per ownership category. For joint accounts, this coverage applies individually to each co-owner. Accounts that do not qualify for coverage include safety deposit boxes, investment accounts, mutual funds and life insurance policies. There are limitations to certain accounts, so it’s important to discuss your personal savings and investment options with a financial adviser. For example, we offer protection for investments up to $50 million through our Certificate of Deposit Account Registry Service (CDARS). This service allows us to divide your investment into FDIC-insurable amounts and distribute it into CDs across our private network. Because we associate the investment with more than one bank, every dollar is insured, and you only receive one account statement.

We know how important it is to keep your investments secure, and your community bank is dedicated to providing customers with optimal deposit coverage and equal opportunity loans. We hope this blog has taught you a bit about our federal banking system and its impact on the services you use each day. If you have questions, don’t hesitate to contact us by phone or stop by your nearest Central Bank. We’re always happy to help!