FDIC Issues Proposed Rule on Certain Assessment Credits
August 20, 2019
Julianne Fisher Breitbeil
The Federal Deposit Insurance Corporation (FDIC) today approved a notice of proposed rulemaking that would amend the deposit insurance assessment regulations that govern the use of small bank assessment credits and one-time assessment credits. Small bank credits were awarded to insured depository institutions (IDIs) that had less than $10 billion in assets, and that contributed to the growth in the Deposit Insurance Fund (DIF) reserve ratio at some point between July 1, 2016, and September 30, 2018, when the reserve ratio was between 1.15 percent and 1.35 percent.
The proposal would require the FDIC to automatically apply small bank credits to quarterly assessments when the reserve ratio is at least 1.35 percent, rather than 1.38 percent, as required under current regulation. After applying credits for eight quarters, the FDIC would remit to IDIs the nominal value of any remaining small bank credits.
The proposal would not change the total amount of credits awarded, but it could affect when the FDIC would apply the credits. The proposed changes intend to make the application of small bank credits to quarterly assessments more predictable for IDIs with these credits, and to simplify the FDIC's administration of these credits without materially impairing the ability of the FDIC to maintain the required minimum reserve ratio of 1.35 percent.
Comments on the proposed rule will be accepted for 30 days after publication in the Federal Register.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's banks and savings associations, 5,362 as of March 31, 2019. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars—insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-74-2019