Kristy Schauer, age 15, of Roseville, Minn., for her question:

WHAT IS THE FDIC?

FDIC is the abbreviation for the Federal Deposit Insurance Corporation. Directors of this group insure the deposits of about 97 percent of the banks in the United States.

If an insured bank is forced to close and finds that it is unable to pay its depositors, the FDIC will pay each depositor up to $40,000.

The FDIC also makes loans to reopen closed insured banks or to keep insured banks from closing.

The organization has the right to examine all insured banks to make sure they are using safe banking practices. It also passes on bank mergers and acts on applications of nonmembers of the Federal Reserve System to change location or establish branches.