Deposit insurance national bank
Bank created as a receiver for a failed U.S. bank
From Wikipedia, the free encyclopedia
A deposit insurance national bank (DINB, /ˈdɪnbi/ DIN-bee[1]) is a temporary bank in the United States that is established by the Federal Deposit Insurance Corporation (FDIC) in the wake of a bank failure. DINBs are authorized under the Banking Acts of 1933 and 1935.[2]
Characteristics
DINBs are chartered by the Office of the Comptroller of the Currency. Upon creation, the bank assumes the failed bank's insured deposits and temporarily provides banking services to customers.[3] A DINB's powers are narrowly limited to servicing the insured deposits of a failed bank; it cannot acquire assets from the failed bank, as a bridge bank can, nor can it accept uninsured deposits, unless it is the only depository institution in its community.[2][4]
The bank is managed by an executive officer appointed by the FDIC.[3] A DINB is not required to have paid-in capital stock,[5] has no board of directors,[6] and is not required to own stock in a Federal Reserve Bank.[7] Otherwise it conforms to the National Bank Act and other laws relevant to national banks.[8]
A DINB can operate for up to two years.[3] It can be acquired by another bank in its community, raise capital to become a permanent bank, or wind down and transfer its obligations to the FDIC.[2]
History
DINBs were initially the only way that the FDIC could resolve a failed institution. The first DINB was the Deposit Insurance National Bank of East Peoria, created when Fond Du Lac State Bank was closed by Illinois regulators on May 26, 1934.[9][10] Under this original deposit insurance system, the FDIC assumed receivership of nine insured banks and paid off their deposits through DINBs.[11]
After the Banking Act of 1935 permitted the FDIC to pay out depositors without establishing a DINB, use of this resolution method largely ceased, except for cases where a bank failed in an area with only limited banking services or where a prompt pay-out was not possible.[9] For example, 1975 saw failures of Swope Parkway National Bank, a Black-owned business serving the local Black community, and The Peoples Bank of the Virgin Islands, which was the only locally owned institution in the U.S. Virgin Islands; a DINB was created for each in hopes of giving the community time to establish a replacement institution.[1] Only five DINBs were created by the FDIC between 1935 and 1998.[12]
Initially, the FDIC responded to the 2023 collapse of Silicon Valley Bank by forming a Deposit Insurance National Bank of Santa Clara[13] because no institution was immediately willing to assume its substantial uninsured deposits. After the Treasury granted an exception to cover the uninsured deposits, the DINB was replaced with a bridge bank named Silicon Valley Bridge Bank, N.A.[14][15]
List of deposit insurance national banks
| Year | Failed bank | DINB | Headquarters |
|---|---|---|---|
| 1934 | Fond Du Lac State Bank | Deposit Insurance National Bank of East Peoria[9][10] | East Peoria, Illinois |
| 1934 | Bank of America Trust Co. | Deposit Insurance National Bank of Pittsburgh[11] | Pittsburgh |
| 1934 | The First National Bank of Lima | Deposit Insurance National Bank of Lima[11] | Lima, Montana |
| 1934 | The Florence Deposit Bank | Deposit Insurance National Bank of Florence[11] | Florence, Indiana |
| 1934 | Bank of Lewisport | Deposit Insurance National Bank of Lewisport[11] | Lewisport, Kentucky |
| 1934 | Farmers & Traders Bank | Deposit Insurance National Bank of Porterfield[11] | Porterfield, Wisconsin |
| 1934 | The Pickens County Bank | Deposit Insurance National Bank of Jasper[11] | Jasper, Georgia |
| 1934 | The State Bank | Deposit Insurance National Bank of Sauk City[11] | Sauk City, Wisconsin |
| 1934 | Farmers State Bank of Bongards | Deposit Insurance National Bank of Bongards[11] | Bongards, Minnesota |
| Year | Failed bank | DINB | Headquarters |
|---|---|---|---|
| 1935 | The Commercial National Bank of Bradford | Deposit Insurance National Bank of Bradford[16] | Bradford, Pennsylvania |
| 1964 | First State Bank[17] | Deposit Insurance National Bank of Dell City[18] | Dell City, Texas[1] |
| 1964 | Crown Savings Bank[17] | Deposit Insurance National Bank of Newport News[19] | Newport News, Virginia |
| 1975 | Swope Parkway National Bank[20][17] | Deposit Insurance National Bank of Kansas City | Kansas City, Missouri[1] |
| 1975 | The Peoples Bank of the Virgin Islands[20][17] | Deposit Insurance National Bank of the Virgin Islands[21] | Charlotte Amalie, U.S. Virgin Islands[1] |
| 1982 | Penn Square Bank | Deposit Insurance National Bank of Oklahoma City[22][12] | Oklahoma City |
| 2009 | New Frontier Bank | Deposit Insurance National Bank of Greeley[23] | Greeley, Colorado |
| 2009 | Community Bank of Nevada | Deposit Insurance National Bank of Las Vegas[24] | Las Vegas |
| 2009 | Citizens State Bank | Deposit Insurance National Bank of New Baltimore[25] | New Baltimore, Michigan |
| 2010 | Barnes Banking Company | Deposit Insurance National Bank of Kaysville[26] | Kaysville, Utah |
| 2010 | Waterfield Bank[27] | Waterfield Bank, FA[28][a] | Germantown, Maryland |
| 2011 | Enterprise Banking Company | Deposit Insurance National Bank of McDonough[29] | McDonough, Georgia |
| 2011 | FirsTier Bank | Deposit Insurance National Bank of Louisville[30] | Louisville, Colorado |
| 2012 | Bank of the Eastern Shore | Deposit Insurance National Bank of Eastern Shore[31] | Cambridge, Maryland |
| 2023 | Silicon Valley Bank | Deposit Insurance National Bank of Santa Clara[32][b] | Santa Clara, California |
See also
Notes
- Organized as a federal savings association rather than a national bank.
- Never operated; assets and liabilities were transferred to a bridge bank.