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Deposit Insurance Assessments Final Rule on Assessment Dividends

Deposit Insurance Fund
October 18, 2006
Summary: The FDIC Board of Directors has approved the attached final rule to implement Assessment Dividends, as required by the Federal Deposit Insurance Reform Act of 2005. The final rule takes effect on January 1, 2007. 

Highlights: 

The Reform Act generally requires that the FDIC pay dividends from the Deposit Insurance Fund (DIF) to insured institutions when the DIF reserve ratio at the end of a calendar year exceeds 1.35 percent.

The attached final rule:

  • Establishes a temporary rule for payment of dividends from the DIF. The rule expires at the end of 2008.
  • Indicates the FDIC's intention to undertake a second, more comprehensive rulemaking on dividends to explore alternative methods for distributing future dividends after the initial two-year period.

The FDIC considers it unlikely that the reserve ratio of the DIF will trigger a dividend before this temporary rule expires.

Distribution: 
All FDIC-Insured Institutions 

Suggested Routing: 
Chief Executive Officer 
President 
Chief Financial Officer 

Note: 
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/financial-institution-letters/2006/index.html . 

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html . 

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200). 

Additional Related Topics:

  • FDIC Assessments Regulations, 12 CFR 327, Subpart A
  • FDIC Dividends Regulations, 12 CFR 327, Subpart C
Attachment(s)
Final Rule

Last Updated: October 18, 2006