FDICIA's Prompt Corrective Action Provisions
Following passage of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which addressed the insolvency of the Federal Savings and Loan Insurance Corporation’s deposit insurance fund, policymakers turned their attention toward heading off a similar collapse of the Bank Insurance Fund (BIF). After months of wrangling, Congress forwarded the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) to the White House last November 27. As President Bush signed the bill into law a few weeks later, the BIF was roughly $7 billion in the red — its first deficit since the 1930s.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.