Bank Insurance Fund (BIF) Law and Legal Definition

Bank Insurance Fund (BIF) provides deposit insurance for commercial banks. The BIF is administered by the Federal Deposit Insurance Corporation (FDIC). The BIF provides an insurance coverage of up to $250,000 per customer account for insolvent banks. The BIF was created as a result of the savings and loan meltdown in the late eighties. The BIF was formed to keep separate the administration of a bank and thrift insurance programs. Earlier two distinct insurance entities were created under the FDIC: BIF and SAIF (Savings Association Insurance Fund). The BIF and SAIF were merged in 2005 to form the Deposit Insurance Fund (DIF).