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4000 - Advisory Opinions


Insured Depository Institutions May Not Charge Customers a Fee for Cost of Deposit Insurance in Excess of Actual Cost

FDIC 91-30 April 17, 1991 Valerie J. Best, Counsel

This letter confirms our telephone conversation of February 21, 1991, and responds to your letter dated February 22nd. It is my understanding that your client performs data processing for a number of banks and savings associations. A depository institution has asked your client to implement a program wherein it would compute on a monthly basis the cost of federal deposit insurance on each of the depository institution's deposit accounts. The depository institution further proposes to directly pass this cost on to its customers and to notify its depositors in their monthly statements that the cost is specifically incurred to pay for deposit insurance. You ask if charging a minimum fee of $1.00 is acceptable when the customer's actual cost of federal deposit insurance is $0.30. Such a practice would not be acceptable.

I previously provided you with a letter concerning this subject dated December 24, 1990 from FDIC Attorney Mark A. Mellon. As stated in that letter, while we are not aware of any reason which would preclude FDIC-insured depository institutions from passing the costs of federal deposit insurance to selected depositors with notice that the cost is for that purpose, we do not endorse the practice. In any event, if an insured depository institution imposes a cost on depositors and informs them that the cost will pay for deposit insurance assessments, it is our belief that the cost should be accurately calculated and that the depositor should not pay any more than the actual cost of insurance for his deposits. Charging a minimum fee in excess of the actual cost of federal deposit insurance is neither fair nor accurate. Such a practice would not be acceptable to the FDIC.

You also ask if it would be acceptable to pass the costs of federal deposit insurance to customers who have checking accounts but not to customers who have certificates of deposit. While we do not endorse such a practice, we are not aware of any reason which would preclude FDIC-insured depository institutions from passing the costs of federal deposit insurance to selected depositors with notice that the cost is for that purpose. As noted above, the cost should be accurately calculated and the depositor should not pay any more than the actual cost of insurance for his deposits.

I trust this letter has been responsive to your inquiry.


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