Deposit Insurance Assessments
Overview of Final Assessments due from Voluntarily Liquidated Institutions
A voluntarily liquidating institution pays for deposit insurance through the insurance termination date contained in its Order of Termination of Deposit Insurance. Since deposit insurance is paid in arrears, the institution, or its remaining legal entity, will need to remain in contact with the FDIC assessment staff (see contact information below) and maintain an ACH account until the final deposit insurance assessments are paid.
8(q) Orders of Termination
In 8(q) Orders of Termination, the insurance termination date can be any day in a quarter. The final assessment billing will include a pro-rata charge up to and including the insurance termination date. This billing method also applies to voluntary liquidations that do not require an 8(q) Order of Termination because the sale of all deposits and the dissolution of the charter happen within 5 business days of each other - a simultaneous liquidation transaction per 12 U.S.C. § 1818(q) and 12 CFR § 307.2
If the transaction occurs early in a quarter, for example, if the Order of Termination is issued on January 5 and the insurance termination date contained in the order is February 5, the final payment will be collected on next upcoming invoice, the March 30 invoice (see Invoice Payment Dates). In this example, the institution’s March invoice will charge for deposit insurance coverage for the fourth quarter of the previous year plus include a pro-rata charge for the first 36 days of the first quarter (January 1 - February 5) of the current year.
If the timing of a transaction is such that the pro-rata charge cannot be collected on the next upcoming invoice, the pro-rata charge will be collected on the following invoice. For example, if an institution’s insurance termination date is March 20, the institution would pay (as it normally would) its March 30 invoice for deposit insurance coverage for the fourth quarter of the previous year. Then, the institution, or its legal entity, would receive a final invoice payable on June 30 that bills the pro-rata charge for the first 79 days of the first quarter (January 1 - March 20).
8(p) Orders of Termination
In 8(p) Orders of Termination, 12 U.S.C. § 1818(p) and 12 CFR § 307.3 the insurance termination date is a quarter end date since these orders state that insurance terminates on the last day of the first full quarterly assessment period following the date of issuance of the order. For example, if the order is issued on March 1, the insurance termination date will be June 30. In this example, the institution, or its legal entity, will make its final assessment payment on September 30 since the September 30 payment is for the second quarter of the year (April 1 - June 30). Institutions under an 8(p) Order will receive an instructional letter from the FDIC Assessment staff on filing manual Call Reports and making the final payments for deposit insurance (see sample instruction letter).
A liquidating institution, or its legal representatives, should contact the Assessments Section at 1-800-759-6596, Option 2, or email email@example.com, to discuss final payment arrangements.