Financial Institution Letters
January 21, 2016
Small Bank Pricing
Notice of Proposed Rulemaking
On January 21, 2016, the FDIC Board of Directors (Board) approved the attached Notice of Proposed Rulemaking (NPR). The NPR revises an NPR adopted by the Board on June 16, 2015, (2015 NPR) in response to comments received. Like the 2015 NPR, this revised NPR would refine the deposit insurance assessment system for small insured depository institutions (generally, those institutions with less than $10 billion in total assets). Under the revised NPR, refinements would become operative the quarter after the reserve ratio of the Deposit Insurance Fund (DIF) reaches 1.15 percent (or the first quarter after a final rule is adopted that the rule can take effect, whichever is later). Comments on the revised NPR are due 30 days following publication of the revised NPR in the Federal Register.
Statement of Applicability to Institutions under $1 Billion in Total Assets: This Financial Institution Letter applies to institutions under $1 billion in total assets.
The revised NPR would be similar to the 2015 NPR, but, in contrast to the 2015 NPR, would:
- Revise the previously proposed one-year asset growth measure.
- Use a brokered deposit ratio (that treats reciprocal deposits and Federal Home Loan Bank advances the same as under current regulations) ––rather than the previously proposed core deposit ratio –– as a measure in the financial ratios method for calculating assessment rates for all established small banks.
- Remove the existing brokered deposit adjustment for established small banks, which currently applies to banks outside Risk Category I.
- Revise the weights assigned to the proposed measures in the financial ratios method based upon a re-estimation of the underlying statistical model.
To help established IDIs evaluate the effect of the proposed rule, the FDIC will update the assessment calculator on the FDIC's website that will allow IDIs to estimate their assessment rates under the revised proposal.
- All FDIC-Insured Institutions
- Chief Executive Officer
- Chief Financial Officer
- FDIC Regulations Governing the Assessment Process, 12 CFR Part 327
- Ashley Mihalik, Senior Financial Economist, Banking and Regulatory Policy Section, Division of Insurance and Research, (202) 898-3793; Nefretete Smith, Senior Attorney, Legal Division, (202) 898-6851; Thomas Hearn, Counsel, Legal Division, (202) 898-6967.
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at https://www.fdic.gov/news/news/financial/
To receive FILs electronically, please visit https://service.govdelivery.com/accounts/USFDIC/subscriber/new.
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).