Right, and the National Credit Union Administration is likewise backed by the "full faith and credit" of the US Treasury. Both the FDIC and NCUA ran out of insurance funds during the GFC and borrowed from the Treasury. Then during the recovery, both the FDIC and NCUA increased their insurance rates on banks in order to pay back the Treasury over a period of years and rebuild their insurance funds. The increased insurance premiums for banks depressed interest rates paid on accounts for a time.The purpose of the Deposit Insurance Fund and line of credit with Treasury (capped at $100B) is so that the member banks, and not taxpayers fund the insurance. If the FDIC exhausts all of that, taxpayers are still on the hook, because FDIC insurance is backed by the full faith and credit of the US government. That is stated explicitly in the Federal Deposit Insurance Act. See page 177 below, about 1/3 the way down from the top of the page, (d) FULL FAITH and CREDIT ...
Maybe.
The FDIC only has limited resources. These were sorely tested during the 2008 GFC. Yes, they do have a line of credit with the Treasury but there is a cap set on it.
https://www.govinfo.gov/content/pkg/COM ... PS-265.pdf
Statistics: Posted by Franz — Mon Oct 20, 2025 8:05 pm — Replies 40 — Views 3619