FDIC, known as the Federal Deposit Insurance Corporation, is an independent agency of the federal government that regulates banks in the United States. In the 1920s and early 1930s, the U.S. banking system was plagued with thousands of failures and many Americans became weary of making deposits. In 1933 Congress passed the Glass-Steagall Act and on 1 January 1934, the FDIC began its operations.

The charter of the FDIC is to maintain public confidence in the banking system by providing insurance to depositors and by taking measures to minimize bank failures. Depositors are granted $100,000 insurance for their savings and checking deposits; if a bank fails, the FDIC will reimburse depositors up to $100,000. Member banks proudly post emblems proclaiming their FDIC membership in conspicuous locations in each branch.

The FDIC is funded entirely by member banks who must meet specific liquidity and reserve requirements. Examiners regularly visit banks throughout the country to ensure that banks are complying with the established guidelines. Whenever a bank fails to meet the guidelines, the FDIC issues a warning. If problems persist, the FDIC has the authority to change management or force the bank to take other corrective actions. Although rare, the FDIC can take steps that indirectly lead to the closure of the bank.