Understanding the Eligible Insured Depository Institution: Key Insights
Definition & meaning
The term eligible insured depository institution refers to any bank or financial institution that is insured and meets specific criteria. According to federal law, an institution qualifies as eligible if it was operational on December 31, 1996, and had paid a deposit insurance assessment before that date. Additionally, any institution that succeeds a qualifying institution also falls under this definition.
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This term is primarily used in banking and financial law, particularly in the context of deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC). Eligible insured depository institutions are crucial for ensuring the safety of depositors' funds. Users may encounter this term when dealing with banking regulations, applying for loans, or understanding their rights as depositors. Legal forms related to banking transactions may be available through platforms like US Legal Forms.
Key Legal Elements
Real-World Examples
Here are a couple of examples of abatement:
Example 1: A bank that was established in 1995 and has consistently paid its deposit insurance assessments qualifies as an eligible insured depository institution.
Example 2: A new bank that has acquired the assets of a bank that was operational on December 31, 1996, may also be recognized as an eligible insured depository institution. (hypothetical example)
Relevant Laws & Statutes
The primary statute governing eligible insured depository institutions is 12 USCS § 1817(3)(C), which outlines the qualifications and definitions related to deposit insurance.
Comparison with Related Terms
Term
Definition
Insured depository institution
Any bank or savings institution that has federal insurance for its deposits, regardless of the date of establishment.
Eligible institution
Refers specifically to institutions that meet the criteria established by federal law, particularly regarding their operational history and insurance assessments.
Common Misunderstandings
What to Do If This Term Applies to You
If you are a depositor at a bank and want to verify its eligibility as an insured depository institution, you can check the FDIC's database or contact the bank directly. If you are considering opening an account or applying for a loan, understanding whether your bank is an eligible institution is important for your financial security. For assistance with related legal documents, consider exploring US Legal Forms for templates that can help you navigate banking transactions.
Quick Facts
Attribute
Details
Definition
An institution insured and operational since December 31, 1996.
Primary Law
12 USCS § 1817(3)(C)
Eligibility Criteria
Operational history, insurance assessment payment
Key Takeaways
FAQs
It is a bank or financial institution that was operational on December 31, 1996, and paid deposit insurance assessments before that date.
Knowing this helps ensure that your deposits are protected under federal insurance.
A new bank can become eligible if it acquires the assets of a qualifying institution.
