In 1933, the federal government created the Federal Deposit Insurance Corporation (FDIC) in order to promote consumer confidence in banking and insure the funds the public was placing in financial institutions. The FDIC has two main responsibilities; the first is insuring all of the deposits in member banks for individual depositors, up to $250,000, and the second is to receive all of the "failed banks" in the United States. A bank fails when it can no longer meet its responsibilities to depositors, and is closed by a state or federal bank regulatory agency. Upon receiving the bank, the FDIC becomes the bank caretaker, charged with the selling bank assets, settling debts, and negotiating claims from depositors who had more money than the maximum insurance amount in the bank. Since the financial crisis began, the FDIC has seen a dramatic increase in failed banks. This table lists all current bank failures for 2008 and 2009.

On May 20, 2009, as part of the Helping Families Save Their Homes Act, Congress approved a permanent increase of the FDIC's line of credit with the Treasury from $30 billion to $100 billion. In addition, the bill allows the FDIC to draw up to $500 billion until December 2010 if FDIC Chairman, Fed Chairman, and Secretary of the Treasury all agree on the need to do so.

On November 12, 2009, the FDIC adopted a rule to require banks to pay at the end of 2009 the amount they would owe the FDIC for insurance premiums over the next three years. The rule was created to shore-up the deposit insurance fund in the face of many projected bank closings for 2010.