Rhode Island Depositors Economic Protection Corporation (DEPCO) records (2002-09)

Historical note

The day before Bruce Sundlun was to take office as governor he learned that the Rhode Island Share and Depositors Insurance Corporation (RISDIC) was going into receivership. RISDIC provided depositor insurance for more than thirty banks, savings and loan institutions, and credit unions in the state. The failure of RISDIC meant that the funds deposited in those institutions were no longer insured. By state law the institutions could not continue to operate without insurance.

As a result, among Sundlun's first official acts as Governor on January 1, 1991, he ordered the immediate closing of the banking institutions insured by RISDIC. They were to remain closed until such time as they could obtain federal insurance from the Federal Depositors Insurance Corporation (FDIC) or the National Credit Union Association (NCUA). Until they could obtain federal insurance, the funds of depositors in those institutions were frozen and unavailable to the depositors. Many of the RISDIC insured institutions were able to obtain federal insurance very quickly and reopen in a matter of days. Others, including many of the largest institutions, were unable to do so.

The principal response of the Sundlun Administration was the development, introduction, and passage of legislation entitled the depositors economic protection act. The legislation created a government corporation, the Depositors Economic Protection Corporation (DEPCO), to restore funds to depositors as quickly as possible. DEPCO worked with officials and depositors of closed institutions to assist them in obtaining federal insurance if possible or to assist them in finding other banking institutions willing to purchase and reopen the closed institutions. For those institutions for which neither options proved feasible, DEPCO was empowered to assume their assets and sell them in order to get funds to depositors as quickly as possible.