Records Relating to Depositors Economic Protect... | State Archives Catalog
Please Note: The arrangement and descriptions of the records in this record group are largely based on descriptions and lists provided by the Rhode Island Depositors Economic Protection Corporation at the time of transfer. The volume of records transferred has so far precluded a detailed examination of the materials to verify the accuracy of the lists and descriptions.
In 1991, the Rhode Island General Assembly created the Depositors Economic Protection Corporation (DEPCO) to assist in protecting the interests of depositors of certain credit unions, loan and investment companies and bank and trust companies in the state (PL 1991, ch.116.) This was made necessary by a banking crisis triggered by the collapse of the Rhode Island Share and Depositors' Indemnity Corporation (RISDIC), a private firm established by the General Assembly in 1969 to insure deposits in certain of Rhode Island's financial institutions. The failure of many of these institutions over a short period of time had overwhelmed RISDIC's limited financial resources. This prompted Governor Bruce Sundlun to declare a banking emergency and to close over forty institutions unable to obtain legally required insurance to back their deposits. (This was the last in a series of post-1970 failures of state-chartered, privately operated deposit insurance funds for thrift institutions, industrial banks, and some credit unions. The failures began in Mississippi in 1976 and continued in Nebraska and California (1983), Ohio and Maryland (1985), Utah and Colorado (1987), and Rhode Island (1991.)
The lockout provoked a financial crisis. It prevented depositors from withdrawing their funds and caused consternation in myriad other ways. Over time, many of the affected financial institutions were able to obtain deposit insurance from other sources, such as the Federal Deposit Insurance Corporation, and to resume operations. Others were absorbed by insured entities. In the end ten financial institutions were unable to reopen. These financial institutions' lending practices accounted for their eventual insolvency. They were all placed into conservatorship.
DEPCO was created to assume the role of a liquidating bank for the closed, uninsurable institutions. As such, certain accounting principles governing liquidating banks were implemented by DEPCO. DEPCO was empowered to act as the receiver, to manage the failed banks' real estate, marshal and liquidate their assets, repay depositors, and seek recovery from those responsible for the fiasco. It was established as a semi-autonomous public corporation. It was dissolved on April 30, 2003.
The records in this Record Group include DEPCO's corporate records as well as the records of the Select Commission established to investigate RISDIC's failure; the Gregorian Commission; RISDIC’s corporate records and, also, dating back to 1936, the corporate records from those financial institutions that fell into bankruptcy and came under DEPCO receivership.