A bank's assessment is calculated by multiplying its assessment rate by its assessment base. A bank's assessment base and assessment rate are determined each quarter.
From the beginning of the FDIC until 2010, a bank's assessment base was about equal to its total domestic deposits. As required by the Dodd-Frank Act, however, the FDIC amended its regulations effective April 2011 to define a bank's assessment base as its average consolidated total assets minus its average tangible equity.
By statute, assessment rates must be risk based. The method for determining a bank's risked-based assessment rate differs for small banks and large banks, however. Small banks (generally, those with less than $10 billion in assets) are assigned an individual rate based on a formula using financial data and CAMELS ratings.
Large banks (generally, those with $10 billion or more in assets) are assigned an individual rate based on a scorecard.3 The scorecard combines the following measures to produce a score that is converted to an assessment rate: CAMELS component ratings, financial measures used to measure a bank's ability to withstand asset-related and funding-related stress, and a measure of loss severity that estimates the relative magnitude of potential losses to the FDIC in the event of the bank's failure.
Assessment rates for both large and small banks are subject to adjustment. Assessment rates: (1) decrease for issuance of long-term unsecured debt, including senior unsecured debt and subordinated debt; (2) increase for holdings of long-term unsecured or subordinated debt issued by other insured banks (the Depository Institution Debt Adjustment or DIDA); and (3) for large banks that are not well-rated or not well-capitalized, increase for significant holdings of brokered deposits.
Total base Assessment Rates for established institutions (insured 5 or more years)*
|Small Banks||Large & Highly Complex Institutions|
|Initial Base Assessment Rate||3 to 30||3 to 30|
|Unsecured Debt Adjustment (added) ***||-5 to 0||-5 to 0|
|Brokered Deposit Adjustment (added)||N/A||0 to 10|
|Total Base Assessment Rate||1.5 to 30||1.5 to 40|
* Total base assessment rates do not include the depository institution debt adjustment.
Total Base Assessment Rates for newly insured small institutions (those insured less than 5 years) *
|Risk Category I||Risk Category II||Risk Category III||Risk Category IV|
|Initial Base Assessment Rate||7||12||19||30|
|Brokered Deposit Adjustment (added)||N/A||0 to 10||0 to 10||0 to 10|
|Total Base Assessment Rate||7||12 to 22||19 to 29||30 to 40|
For more information:
- Deposit Insurance Assessments - Provides a comprehensive overview of deposit insurance assessments, including information on the quarterly invoicing process, compliance reviews of assessment reporting, and prior period rates.
- Small Bank Pricing Financial Institution Letter - Revises the deposit insurance assessment system for established small banks.
- Final Rule of Assessments, Dividends, Assessment Base, and Large Bank Pricing - PDF (PDF Help) - Implements changes to the assessment base, rate schedules, and dividends, pursuant to Dodd-Frank Act changes. Revises the large bank assessment system to the scorecard method to better differentiate for risk and better take into account losses from large bank failures.
- Questions and Answers Pertaining to the Final Rule on Assessments, Dividends, Assessment Base, and Large Bank Pricing (Last Updated 9/28/11) - PDF (PDF Help)
- Final Rule on Assessments, Large Bank Pricing Changes to Definitions of Higher Risk Assets - PDF (PDF Help) - Revises definitions used to determine assessment rates for large banks.
- Questions and Answers Pertaining to the Final Rule on Assessments, Large Bank Pricing Changes to Definitions of Higher-Risk Assets (Last Updated 01/20/2015) - PDF (PDF Help)
- Final Rule of Regulatory Capital Rules: Regulatory Capital, Revisions to the Supplementary Leverage Ratio - PDF (PDF Help) - Revises the definition of the denominator of the supplementary leverage ratio.
3 Technically, there are two scorecards, one for most large banks and one for a few highly complex banks. The scorecards are similar but not identical.