How Does the FDIC Affect My Bank’s Service?

This post addresses how the FDIC affects the level of service you receive from your bank. But before we jump into service levels, you need to understand more of what the FDIC does and how it operates.

The FDIC directly examines and supervises 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. For example, Western Community Bank is a state-chartered bank that opted not to join the Federal Reserve System (like most community banks in the country), so the FDIC is Western Community Bank’s primary regulator.

Banks have to comply with a host of federal and state regulations and safe operating guidelines designed to protect depositors and their money. The FDIC regularly sends teams of examiners to banks to review compliance with banking regulations, information security guidelines, and prescribed safe and sound operating procedures. It’s the FDIC’s supervisory role that plays a large part in the service, and services, you receive from your bank.

Checking, savings, loans and other accounts and products are made available in accordance with banking regulation. Computer systems, electronic and paper information, and how that information is used is carefully managed and protected by regulation. The interest rates for savings accounts and loans are also managed, in part, by regulatory requirements for equity and availability. Therefore, the challenge for your bank is to offer all of its services and products in a highly regulated industry, while doing its best to delight you.

Certainly personalities, cultures, and management styles will play a role in the kind of service you receive at your bank. But from an operational and procedural standpoint, the FDIC plays an important role in maintaining the stability of, and public confidence in the nation’s financial system by insuring deposits and examining and supervising financial institutions.

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