Banking Practice Showdown 2025 – Vault into Your Future Success!

The correct answer is the Competitive Equality Banking Act. This legislation, enacted in 1987, aimed to address several issues within the banking sector, especially focusing on the challenges faced by the Federal Deposit Insurance Corporation (FDIC) in managing failing financial institutions. One significant outcome of this act was the expansion of the FDIC's authority to provide open bank assistance, which allows the FDIC to offer financial support to solvent banks that may otherwise face problems due to economic conditions or systemic risks.

This power is crucial during financial crises, as it enables the FDIC to maintain confidence in the banking system and prevent unnecessary failures of otherwise healthy institutions. By providing liquidity or assistance directly to these banks, the FDIC can stabilize the banking system and protect depositors.

In contrast, the other options relate to different areas of financial regulation or reforms but do not specifically focus on expanding the FDIC's authority for open bank assistance. For instance, the Depository Institutions Act (Garn-St. Germain) primarily dealt with deregulation of interest rates and mortgage lending; the Financial Institutions Reform, Recovery and Enforcement Act addressed broader financial institution failures and reforms after the savings and loan crisis; and the Federal Deposit Insurance Corporation Improvement Act provided for various enhancements to the FDIC's