Deposit insurance national bank


A deposit insurance national bank is a temporary bank in the United States that is established by the Federal Deposit Insurance Corporation in the wake of a bank failure. DINBs are authorized under the Banking Acts of 1933 and 1935.

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. 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.
The bank is managed by an executive officer appointed by the FDIC. A DINB is not required to have paid-in capital stock, has no board of directors, and is not required to own stock in a Federal Reserve Bank. Otherwise it conforms to the National Bank Act and other laws relevant to national banks.
A DINB can operate for up to two years. 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.

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. Under this original deposit insurance system, the FDIC assumed receivership of nine insured banks and paid off their deposits through DINBs.
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. 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. Only five DINBs were created by the FDIC between 1935 and 1998.
Initially, the FDIC responded to the 2023 collapse of [Silicon Valley Bank] by forming a Deposit Insurance National Bank of Santa Clara 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.

List of deposit insurance national banks

YearFailed bankDINBHeadquarters
1935The Commercial National Bank of BradfordDeposit Insurance National Bank of BradfordBradford, Pennsylvania
1964First State BankDeposit Insurance National Bank of Dell CityDell City, Texas
1964Crown Savings BankDeposit Insurance National Bank of Newport NewsNewport News, Virginia
1975Swope Parkway National BankDeposit Insurance National Bank of Kansas CityKansas City, Missouri
1975The Peoples Bank of the Virgin IslandsDeposit Insurance National Bank of the Virgin IslandsCharlotte Amalie, U.S. Virgin Islands
1982Penn Square BankDeposit Insurance National Bank of Oklahoma CityOklahoma City
2009New Frontier BankDeposit Insurance National Bank of GreeleyGreeley, Colorado
2009Community Bank of NevadaDeposit Insurance National Bank of Las VegasLas Vegas
2009Citizens State BankDeposit Insurance National Bank of New BaltimoreNew Baltimore, Michigan
2010Barnes Banking CompanyDeposit Insurance National Bank of KaysvilleKaysville, Utah
2010Waterfield BankWaterfield Bank, FAGermantown, Maryland
2011Enterprise Banking CompanyDeposit Insurance National Bank of McDonoughMcDonough, Georgia
2011FirsTier BankDeposit Insurance National Bank of LouisvilleLouisville, Colorado
2012Bank of the Eastern ShoreDeposit Insurance National Bank of Eastern ShoreCambridge, Maryland
2023Silicon Valley BankDeposit Insurance National Bank of Santa ClaraSanta Clara, California