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Paycheck Protection Program (PPP) & Money Market Mutual Fund Liquidity Facility (MMLF) Mitigation

Effective June 26, 2020, the FDIC adopted a Final Rule to mitigate the effect on deposit insurance assessments resulting from an insured institution’s participation in the Paycheck Protection Program (PPP), the Paycheck Protection Program Liquidity Facility (PPPLF), and the Money Market Mutual Fund Liquidity Facility (MMLF). The regulation provides adjustments to remove the effects of participating in PPP, PPPLF, and MMLF on the assessment rate calculation, and an offset to assessments attributable to the MMLF and PPP assessment base increases. New Report of Condition and Income (Call Report) items have been added to report PPP, PPPLF, and MMLF amounts necessary to implement the regulation changes.

Adjustment to the Risk Based Assessment Computation
The regulation will: 1) remove the effect of participation in the PPP and PPPLF on various risk measures used to calculate an Insured Depository Institution’s (IDI's) assessment rate, 2) remove the effect of participation in the PPPLF and MMLF programs on certain adjustments to an IDI’s assessment rate, and 3) remove the effect of participation in the PPPLF and MMLF programs when classifying IDIs as small, large, or highly complex for assessment purposes.

Assessment Offset
The regulation will also provide an offset to an IDI's assessment for the increase to its assessment base attributable to participation in the MMLF and PPP.

Call Report Changes
Institutions must report on the following new lines to take advantage of the FDIC rule changes beginning with the June 2020 Call Report in order to effect the deposit insurance assessment mitigation:

RC-M Memoranda

  1. U.S. Small Business Administration Paycheck Protection Program (PPP) loans and the Federal Reserve PPP Liquidity Facility (PPPLF):
    a. Number of PPP loans outstanding
    b. Outstanding balance of PPP loans
    c. Outstanding balance of PPP loans pledged to the PPPLF
    d. Outstanding balance of borrowings from Federal Reserve Banks under the PPPLF with a remaining maturity of:
         (1) One year or less
         (2) More than one year
    e. Quarterly average amount of PPP loans pledged to the PPPLF and excluded from “Total assets for the leverage ratio” reported in Schedule RC-R, Part I, item 30
  2. Money Market Mutual Fund Liquidity Facility (MMLF):
    a. Outstanding balance of assets purchased under the MMFL
    b. Quarterly average amount of assets purchased under the MMLF and excluded from “Total assets for the leverage ratio” reported in Schedule RC-R, Part I, Item 30
Please see Financial Institution Letter FIL-60-2020 for more information.  Current Call Report forms and instructions are found at Call Report Forms.  If your institution’s Call Report preparer would like to speak to a FDIC Call Report Analyst, click Analysts.

Effective Dates
The final rule is effective June 26, 2020, and will apply as of April 1, 2020, and will be reflected on the second quarter deposit insurance assessment (collected on September 30, 2020) based on amounts reported on June 2020 Call Reports.

For More Information
Please email your questions on risk ratings, risk measures, financial ratios, and the assessment rate calculators to RRPSAdministrator@fdic.gov.  Include your institution’s name and FDIC Certificate Number in your email. You may also call 1-800-759-6596, Option 1.

Please email your questions concerning the offset computation on the invoice and any other assessment invoice questions to Assessments@fdic.gov.  Include your institution’s name and FDIC Certification Number in your email. You may also call 1-800-759-6596, Option 2.