Federal Deposit
Insurance Corporation

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  The FDIC proposes eliminating the float deductions on the grounds 
that, based on available information, the standard float deductions 
appear to be obsolete and arbitrary, actual float appears to be small 
and decreasing as the result of legal, technological and payment 
systems changes, and requiring institutions to calculate actual float 
would appear to increase regulatory burden.
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  \18\ Table 1 includes all Call Report filers with $300 million 
or more in assets.
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    Eliminating the float deductions would favor some institutions over 
others. Institutions with larger percentages of time and savings 
deposits would see the least increase in their assessment bases; 
conversely, those with large percentages of demand deposits would see 
the greatest increases in their assessment bases. However, eliminating 
the float deductions would only minimally affect the relative 
distribution of the aggregate assessment base among institutions of 
different asset sizes and between banks and thrifts (although it would 
have a

[[Page 28795]]

greater effect on the assessment bases of some individual 
institutions).\19\ While eliminating the float deductions would 
increase assessment bases and affect the distribution of the assessment 
burden among institutions, it should not, in itself, increase 
assessments. The assessment rates that the FDIC will propose in the new 
pricing system will take into account the elimination of the float 
deduction.
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    \19\ See Attachment B for further analysis of the effect of 
eliminating the float deductions.
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    Based upon available information, the FDIC proposes to eliminate 
the float deduction, with the new rule taking effect January 1, 2007. 
However, in light of the alternatives discussed below, the FDIC 
believes that comment would be particularly helpful in evaluating this 
proposal, especially on how much float remains, how accurate the 
present float deductions are, and how burdensome calculation of actual 
float would be. The FDIC invites comment on the following two 
alternatives, as well as on the proposal to eliminate the float 
deduction.

Deduct Actual Float
    One alternative to eliminating the float deduction would be to 
deduct actual float to determine the assessment base.\20\ While legal, 
technological and payment systems changes that have accelerated check 
clearing appear to have reduced float, there is evidence that actual 
float has not been completely eliminated as indicated in Table 1 above.
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    \20\ One possible basic definition of actual float would be 
limited to the actual amount of cash items in process of collection: 
(1) included in the assessment base; and (2) for which the 
institution has not been paid. As soon as an institution received 
payment or credit for a cash item, the item would no longer be 
eligible for the float deduction. A variation on this definition 
would limit float to cash items in process of collection: (1) 
included in the assessment base; (2) due from another insured 
depository institution, a clearinghouse, or the Federal Reserve 
System; and (3) for which the institution has not been paid. A third 
alternative would be similar to the second alternative except that 
the actual amount of cash items in the process of collection would 
have to be credited to customer deposit accounts. Other definitions 
are possible and any definition adopted would probably be complex. 
Comments are particularly sought on the definition that should be 
used if actual float were deducted in determining the assessment 
base.
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    Deducting actual float rather than the standard float deductions to 
arrive at the assessment base would favor some institutions over other 
institutions. Institutions with float percentages on demand deposits 
that exceed 16\2/3\ percent would have a larger assessment base 
deduction than they currently have. Institutions with float percentages 
on demand deposits less than 16\2/3\ percent would have a smaller 
assessment base deduction than they currently have.
    The smallest banks (and all savings associations, which file TFRs) 
do not report cash items in process of collection separately. All other 
banks separately report cash items in process of collection, and among 
these banks the assessment bases of medium-sized banks would, as a 
whole, increase by the greatest percentage if institutions deducted 
actual float rather than 16\2/3\ percent. It appears unlikely that 
using actual float would result in a major change in the relative 
distribution of the aggregate assessment base among institutions of 
different sizes, at least among the medium to largest institutions. 
However, the FDIC has no proxy for actual float at smaller banks or for 
Office of Thrift Supervision (OTS) supervised savings institutions of 
any size, and thus cannot estimate the distributional effects on these 
institutions as a group.\21\
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    \21\ See Attachment B for further analysis of the effect of 
deducting actual float.
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    Deducting actual float rather than the standard float deductions to 
arrive at the assessment base would require that institutions report 
actual float. Institutions that determine their assessment base using 
average daily balances would be required to report average daily float. 
This would necessitate a new information requirement for float 
data.\22\ Before 1960, institutions computed actual float and deducted 
it from deposits when computing their assessment bases. Because this 
proved to be onerous at one time, Congress established the standardized 
float deductions by statute. Asking institutions to again report actual 
float could create significant regulatory burden. In addition, if 
actual float were deducted, institutions that report their assessment 
bases using average daily balances would be required to report their 
float deduction the same way.
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    \22\ The Call Report item ``Cash items in process of 
collection'' could not be used to determine the actual float 
deduction for individual institutions. Because ``Cash items in 
process of collection'' contains items other than float, it may 
overstate actual float. For a few institutions, ``Cash items in 
process of collection,'' exceeds the institutions' assessment bases. 
(These institutions' ``Cash items'' are not included in the 
approximation of actual float in the text.) Conversely, given the 
small size of the ``Cash items in process of collection'' reported 
by many institutions, this item may understate float at some 
institutions.
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Retain the Existing Float Deduction
    The FDIC considered retaining the current float deduction. The 
current deduction has largely been in place for over 40 years and is 
well known. This option would impose no conversion costs and would 
neither increase nor decrease record keeping or reporting costs at 
present.\23\ Current standardized float deductions, however, probably 
do not reflect real float for most institutions.
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    \23\ For assessment base reporting, the FDIC would need to 
retain a breakout of demand deposits and time and savings deposits.
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F. Modify the Terminating Transfer Rule

    At present, complex rules apply to terminating transfers \24\ to 
ensure that the assessment of a terminating institution is paid. 
Determining and collecting assessments after the end of each quarter 
and using average daily assessment bases make these complex rules 
obsolete and unnecessary. An acquiring institution (or institutions) 
would remain liable for the assessment owed by a terminating 
institution, but the assessment base of the disappearing institution 
would be zero for the remainder of the quarter after the terminating 
transfer.
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    \24\ Generally speaking, a terminating transfer occurs when an 
institution assumes another institution's liability for deposits--
often through merger or consolidation--when the terminating 
institution essentially goes out of business. Neither the assumption 
of liability for deposits from the estate of a failed institution 
nor a transaction in which the FDIC contributes its own resources in 
order to induce a surviving institution to assume liabilities of a 
terminating institution is a terminating transfer.
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    The proposed terminating transfer provision would deal with a few 
remaining situations. When a terminating transfer occurs, if the 
terminating institution does not file a report of condition for the 
quarter in which the terminating transfer occurred or for the prior 
quarter, calculation of its quarterly certified statement invoices for 
those quarters would be based on its assessment base from its most 
recently filed report of condition. For the quarter before the 
terminating transfer occurred, the acquired institution's assessment 
premium would be determined using its rate, but for the quarter in 
which the terminating transfer occurs, the acquired institution's 
assessment premium would be pro rated according to the portion of the 
quarter in which it existed and assessed at the rate of the acquiring 
institution.
    Under the proposal, once institutions begin reporting average daily 
deposits, the average assessment base of the acquiring institution will 
properly reflect the terminating transfer and will increase after the 
terminating transfer. For an acquiring institution that does not report 
average daily deposits, however, the FDIC proposes that its assessment 
base as reported at the end of the quarter be reduced to reflect that

[[Page 28796]]

the acquiring institution did not hold the acquired institution's 
assessment base for the full quarter. Thus, for example, an institution 
that reports end-of-quarter balances might acquire another institution 
by merger one month (one-third of the way) into a quarter. In that 
case, the acquiring institution's assessment base for that quarter 
would be decreased by one-third of the acquired institution's 
assessment base.
    The FDIC proposes that this rule become effective January 1, 2007.

G. Assess Newly Insured Institutions for the Quarter They Become 
Insured

    At present, a newly insured institution is not liable for 
assessments for the semiannual period in which it becomes insured, but 
is liable for assessments for the following semiannual period. The 
institution's assessment base as of the day before the following 
semiannual period begins is deemed to be its assessment base for the 
entire semiannual period. These special rules are needed because, at 
present, assessments are based upon assessment bases that an 
institution has reported in the past. A newly insured institution 
reports an assessment base at the end of the quarter in which it 
becomes insured but that assessment base is not used to calculate its 
assessment until the following semiannual period. Further, if an 
institution becomes insured in the second half of a semiannual period, 
it will have no reported assessment base on which to calculate the 
first installment of its premium for the next semiannual period.
    Under the FDIC's proposals, each quarterly assessment will be based 
upon the assessment base that an institution reports at the end of that 
quarter. Thus, a newly insured institution will have reported an 
assessment base for the quarter in which it becomes insured and the 
special assessment rules for newly insured institutions will no longer 
be needed.
    The FDIC proposes that the special assessment rules for newly 
chartered institutions be eliminated, that the normal rules for 
determining assessment bases apply to newly chartered institutions and 
that these new rules go into effect January 1, 2007.

H. Allow 90 Days Each Quarter To File a Request for Review or Request 
for Revision

    The current deadline for an institution to request a review of its 
assessment risk classification is 90 days from the invoice date for the 
first quarterly installment of a semiannual period. Under the FDIC's 
proposal, each quarterly assessment will be separately computed in the 
future. Consequently, a conforming change is needed to the rules for 
requesting review, so that institutions would have 90 days from the 
date of each quarterly certified statement invoice to file a request 
for review. Institutions would also have 90 days from the date of any 
subsequent invoice that adjusted the assessment of an earlier 
assessment period to request a review.
    A parallel amendment would be made so that requests for revision of 
an institution's quarterly assessment payment computation would be made 
within 90 days of the quarterly assessment invoice for which revision 
is requested (rather than the present 60 days).
    The FDIC proposes that these amendments go into effect January 1, 
2007.

I. Conforming Changes to the Certified Statement Rules

    The Reform Act eliminated the requirement that the deposit 
insurance assessment system be semiannual and provided a new three-year 
statute of limitations for assessments. Accordingly, the FDIC proposes 
to revise the provisions of 12 CFR 327.2 to clarify that the certified 
statement is the quarterly certified statement invoice and to provide 
for the retention of the quarterly certified statement invoice by 
insured institutions for three years, rather than five years under the 
prior law.
    The FDIC proposes that these amendments take effect January 1, 
2007.

J. Eliminate the Prepayment and Double Payment Options

    When the present assessment system was proposed more than 10 years 
ago, the original quarterly dates for payment of assessments were: 
March 30, June 30, September 30, and December 30. The FDIC recognized 
that the December 1995 collection date could present a one-time problem 
for institutions using cash-basis accounting, since these institutions 
would, in effect, be paying assessments for five quarters in 1995. The 
FDIC believed that few institutions would be adversely affected. Soon 
after the new system was adopted, however, the FDIC began to receive 
information that more institutions than had originally been identified 
would be adversely affected by the December collection date. As a 
result, the FDIC amended the regulation in 1995 to move the collection 
date to January 2, but allowed institutions to elect to pay on December 
30, thus establishing the prepayment date.
    The FDIC proposes eliminating the prepayment option. With 
implementation of the revamped assessment system, a transition period 
will be created in which institutions will not be subject to deposit 
insurance assessment premiums after the September 30, 2006 payment date 
until June 30, 2007. Consequently, reestablishing the original December 
30 payment date should have no adverse consequences for institutions 
that use cash-basis accounting. No institution would make more than 
four insurance payments in calendar year 2006; those using the December 
30, 2005 payment date would make only three payments in 2006. All 
institutions would make four payments annually thereafter. This change 
will keep all assessment payments within each calendar year.\25\
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    \25\ The allowance for payment on the following business day--
should January 2 fall on a non-business day--will be eliminated as 
well.
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    In addition, insured institutions presently have the regulatory 
option of making double payments on any payment date except January 2. 
Under the proposed system, this option would also be eliminated. The 
double payment option has its origins in the 1995 amendment, when the 
payment date was modified from December 30, 1995 to January 2, 1996. 
The double payment option was adopted to provide cash basis 
institutions the opportunity to pay the full amount of their semiannual 
assessment premium on December 30 so as to have the complete benefit of 
this modification. The transition period from September 30, 2006 to 
June 30, 2007 and four payments annually beginning in 2007 should 
eliminate the need for the double payment option. Moreover, the FDIC 
will no longer be charging semiannual premiums.
    The FDIC proposes that these amendments take effect January 1, 
2007. Comment from interested parties is elicited on the elimination of 
the prepayment and double payment options.

III. Regulatory Analysis and Procedure

A. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 
Stat. 1338, 1471 (Nov. 12, 1999), requires the Federal banking agencies 
to use plain language in all proposed and final rules published after 
January 1, 2000. We invite your comments on how to make this proposal 
easier to understand. For example:
     Have we organized the material to suit your needs? If not, 
how could this material be better organized?

[[Page 28797]]

     Are the requirements in the proposed regulation clearly 
stated? If not, how could the regulation be more clearly stated?
     Does the proposed regulation contain language or jargon 
that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes to the format would make the regulation 
easier to understand?
     What else could we do to make the regulation easier to 
understand?

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires that each Federal 
agency either certify that a proposed rule would not, if adopted in 
final form, have a significant economic impact on a substantial number 
of small entities or prepare an initial regulatory flexibility analysis 
of the proposal and publish the analysis for comment. See 5 U.S.C. 603, 
604, 605. Certain types of rules, such as rules of particular 
applicability relating to rates or corporate or financial structures, 
or practices relating to such rates or structures, are expressly 
excluded from the definition of ``rule'' for purposes of the RFA. 5 
U.S.C. 601. The proposed rule provides operational procedures governing 
assessments and relates directly to the rates imposed on insured 
depository institutions for deposit insurance, by providing for the 
determination of assessment bases to which the rates will apply. 
Consequently, no regulatory flexibility analysis is required.
    Moreover, if adopted in final form, the proposed rule would not 
have a significant economic impact on a substantial number of small 
institutions within the meaning of those terms as used in the RFA. The 
proposed rule would provide the operational format for the FDIC's 
assessment system for the collection of deposit insurance assessments. 
Most of the processes within this proposed regulation are analogous to 
existing FDIC assessment processes; variances occur largely in timing, 
not in the processes themselves; no additional reporting requirements 
or record retention requirements are created by the proposed rules.
    The provisions dealing with determining assessment bases using 
average daily balances include an opt-out for insured institutions with 
assets of less than $300 million, which would permit small institutions 
under the RFA (i.e., those with $165 million or less in assets) to 
continue (as they do now) reporting quarter end balances. Newly insured 
institutions with $165 million or less in assets, however, would be 
required to report average daily balances. Most small, newly insured 
institutions (for the period from 2001 through 2005, the average number 
of small institutions that became insured each year was approximately 
126) will ordinarily implement systems permitting calculation of 
average daily balances and therefore will not be significantly burdened 
by this requirement.
    Similarly, elimination of the float deduction in calculating 
assessment bases would not have a significant economic impact on a 
substantial number of small ($165 million in assets or less) insured 
depository institutions within the meaning of the RFA. Based on 
December 31, 2005 reports of condition, small institutions represented 
5.09 percent of the total assessment base, with large institutions 
(i.e., those with more than $165 million in assets) representing 94.91 
percent. Without the existing float deduction, those percentages would 
have been 5.14 and 94.86, respectively, a change of only .05 percent. 
By way of example, if a flat 2 basis point annual charge had been 
assessed on the December 31, 2005 assessment base without the float 
deduction (i.e., with the float deduction added back to the assessment 
base), the amount collected would have been approximately $1.267 
billion. To collect the same amount from the industry on the same 
assessment base, but allowing the float deduction, approximately a 2.05 
basis point charge would have been required, since the assessment base 
would have been smaller. The average difference in assessment charged a 
small institution for one year if the float deduction were eliminated 
(charging 2 basis points) versus allowing the float deduction (charging 
2.05 basis points) would be about $110. The actual increase in 
assessments charged small institutions for one year if the float 
deduction were eliminated (charging 2 basis points) versus allowing the 
float deduction (charging 2.05 basis points) would be greater than or 
equal to $1,000 for only 38 out of 5,362 small institutions.\26\ The 
largest resulting increase for any small institution would be about 
$2,500. In addition, the actual amount collected would in many cases be 
reduced by one-time credit use while these credits last. Accordingly, 
pursuant to section 605 of the RFA, the FDIC is not required to do an 
initial regulatory flexibility analysis of the proposed rule.
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    \26\ Of the 8,832 insured depository institutions, there were 
5,362 small insured depository institutions (i.e., those with $165 
million or less in assets) as of December 31, 2005.
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    Commenters are invited to provide the FDIC with any information 
they may have about the likely quantitative effects of the proposal on 
small insured depository institutions.

C. Paperwork Reduction Act

    No collections of information pursuant to the Paperwork Reduction 
Act (44 U.S.C. 3501 et seq.) are contained in the proposed rule. Any 
paperwork created as the result of the conversion to reporting average 
daily assessment balances will be submitted to the Office of Management 
and Budget (OMB) for review and approval as an adjustment to the 
Consolidated Reports of Condition and Income (call reports), an 
existing collection of information approved by OMB under Control No. 
3064-0052.

D. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

List of Subjects in 12 CFR Part 327

    Bank deposit insurance, Banks, banking, Savings associations.

    For the reasons set forth in the preamble, the FDIC proposes to 
amend chapter III of title 12 of the Code of Federal Regulations as 
follows:

PART 327--ASSESSMENTS

    1. The authority citation for part 327 is revised to read as 
follows:

    Authority: 12 U.S.C. 1441, 1813, 1815, 1817-1819, 1821; Sec. 
2101-2109, Pub. L. 109-171, 120 Stat. 9-21 , and Sec. 3, Pub. L. 
109-173, 119 Stat. 3605.

    2. Revise Sec. Sec.  327.1 through 327.8 of Subpart A to read as 
follows:


Sec.  327.1  Purpose and scope.

    (a) Scope. This part 327 applies to any insured depository 
institution, including any insured branch of a foreign bank.
    (b) Purpose. (1) Except as specified in paragraph (b)(2) of this 
section, this part 327 sets forth the rules for:
    (i) The time and manner of filing certified statements by insured 
depository institutions;
    (ii) The time and manner of payment of assessments by such 
institutions; and

[[Page 28798]]

    (iii) The payment of assessments by depository institutions whose 
insured status has terminated.
    (2) Deductions from the assessment base of an insured branch of a 
foreign bank are stated in subpart B part 347 of this chapter.


Sec.  327.2  Certified statements.

    (a) Required. (1) The certified statement shall also be known as 
the quarterly certified statement invoice. Each insured depository 
institution shall file and certify its quarterly certified statement 
invoice in the manner and form set forth in this section.
    (2) The quarterly certified statement invoice shall reflect the 
institution's assessment base, assessment computation, and assessment 
amount, for each quarterly assessment period.
    (b) Availability and access. (1) The Corporation shall make 
available to each insured depository institution via the FDIC's e-
business Web site FDICconnect a quarterly certified statement invoice 
each assessment period.
    (2) Insured depository institutions shall access their quarterly 
certified statement invoices via FDICconnect, unless the FDIC provides 
notice to insured depository institutions of a successor system. In the 
event of a contingency, the FDIC may employ an alternative means of 
delivering the quarterly certified statement invoices. A quarterly 
certified statement invoice delivered by any alternative means will be 
treated as if it had been downloaded from FDICconnect.
    (3) Institutions that do not have Internet access may request a 
renewable one-year exemption from the requirement that quarterly 
certified statement invoices be accessed through FDICconnect. Any 
exemption request must be submitted in writing to the Chief of the 
Assessments Section.
    (4) Each assessment period, the FDIC will provide courtesy e-mail 
notification to insured depository institutions indicating that new 
quarterly certified statement invoices are available and may be 
accessed on FDICconnect. E-mail notification will be sent to all 
individuals with FDICconnect access to quarterly certified statement 
invoices.
    (5) E-mail notification may be used by the FDIC to communicate with 
insured depository institutions regarding quarterly certified statement 
invoices and other assessment-related matters.
    (c) Review by institution. The president of each insured depository 
institution, or such other officer as the institution's president or 
board of directors or trustees may designate, shall review the 
information shown on each quarterly certified statement invoice.
    (d) Retention by institution. If the appropriate officer of the 
insured depository institution agrees that to the best of his or her 
knowledge and belief the information shown on the quarterly certified 
statement invoice is true, correct and complete and in accordance with 
the Federal Deposit Insurance Act and the regulations issued under it, 
the institution shall pay the amount specified on the quarterly 
certified statement invoice and shall retain it in the institution's 
files for three years as specified in section 7(b)(4) of the Federal 
Deposit Insurance Act.
    (e) Amendment by institution. If the appropriate officer of the 
insured depository institution determines that to the best of his or 
her knowledge and belief the information shown on the quarterly 
certified statement invoice is not true, correct and complete and in 
accordance with the Federal Deposit Insurance Act and the regulations 
issued under it, the institution shall pay the amount specified on the 
quarterly certified statement invoice, and may:
    (1) Amend its Report of Condition, or other similar report, to 
correct any data believed to be inaccurate on the quarterly certified 
statement invoice; amendments to such reports timely filed under 
section 7(g) of the Federal Deposit Insurance Act but not permitted to 
be made by an institution's primary Federal regulator may be filed with 
the FDIC for consideration in determining deposit insurance 
assessments; or
    (2) Amend and sign its quarterly certified statement invoice to 
correct a calculation believed to be inaccurate and return it to the 
FDIC by the applicable payment date specified in Sec.  327.3(c).
    (f) Certification. Data used by the Corporation to complete the 
quarterly certified statement invoice has been previously attested to 
by the institution in its Reports of Condition, or other similar 
reports, filed with the institution's primary Federal regulator. When 
an insured institution pays the amount shown on the quarterly certified 
statement invoice and does not correct that invoice as provided in 
paragraph (e) of this section, the information on that invoice shall be 
deemed true, correct, complete, and certified for purposes of paragraph 
(a) of this section and section 7(c) of the Federal Deposit Insurance 
Act.
    (g) Requests for revision of assessment computation. (1) The timely 
filing of an amended Report of Condition or other similar report, or an 
amended quarterly certified statement invoice, that will result in a 
change to deposit insurance assessments owed or paid by an insured 
depository institution shall be treated as a timely filed request for 
revision of computation of quarterly assessment payment under Sec.  
327.3(f).
    (2) The rate multiplier on the quarterly certified statement 
invoice shall be amended only if it is inconsistent with the assessment 
risk classification assigned to the institution by the Corporation for 
the assessment period in question pursuant to Sec.  327.4(a). Agreement 
with the rate multiplier shall not be deemed to constitute agreement 
with the assessment risk classification assigned.


Sec.  327.3  Payment of assessments.

    (a) Required--(1) In general. Except as provided in paragraph (b) 
of this section, each insured depository institution shall pay to the 
Corporation for each assessment period an assessment determined in 
accordance with this part 327.
    (2) Notice of designated deposit account. For the purpose of making 
such payments, each insured depository institution shall designate a 
deposit account for direct debit by the Corporation. No later than 30 
days prior to the next payment date specified in paragraph (b)(2) of 
this section, each institution shall provide written notice to the 
Corporation of the account designated, including all information and 
authorizations needed by the Corporation for direct debit of the 
account. After the initial notice of the designated account, no further 
notice is required unless the institution designates a different 
account for assessment debit by the Corporation, in which case the 
requirements of the preceding sentence apply.
    (b) Assessment payment--(1) Quarterly certified statement invoice. 
Starting with the first assessment period of 2007, no later than 15 
days prior to the payment date specified in paragraph (b)(2) of this 
section, the Corporation will provide to each insured depository 
institution a quarterly certified statement invoice showing the amount 
of the assessment payment due from the institution for the prior 
quarter (net of credits or dividends, if any), and the computation of 
that amount. Subject to paragraph (e) of this section, the invoiced 
amount on the quarterly certified statement invoice shall be the 
product of the following: The assessment base of the institution for 
the prior quarter computed in accordance with Sec.  327.5 multiplied by 
the institution's rate for that prior quarter as assigned to the 
institution pursuant to Sec. Sec.  327.4(a) and 327.9.

[[Page 28799]]

    (2) Quarterly payment date and manner. The Corporation will cause 
the amount stated in the applicable quarterly certified statement 
invoice to be directly debited on the appropriate payment date from the 
deposit account designated by the insured depository institution for 
that purpose, as follows:
    (i) In the case of the assessment payment for the quarter that 
begins on January 1, the payment date is the following June 30;
    (ii) In the case of the assessment payment for the quarter that 
begins on April 1, the payment date is the following September 30;
    (iii) In the case of the assessment payment for the quarter that 
begins on July 1, the payment date is the following December 30; and
    (iv) In the case of the assessment payment for the quarter that 
begins on October 1, the payment date is the following March 30.
    (c) Necessary action, sufficient funding by institution. Each 
insured depository institution shall take all actions necessary to 
allow the Corporation to debit assessments from the insured depository 
institution's designated deposit account. Each insured depository 
institution shall, prior to each payment date indicated in paragraph 
(b)(2) of this section, ensure that funds in an amount at least equal 
to the amount on the quarterly certified statement invoice are 
available in the designated account for direct debit by the 
Corporation. Failure to take any such action or to provide such funding 
of the account shall be deemed to constitute nonpayment of the 
assessment.
    (d) Business days. If a payment date specified in paragraph (b)(2) 
falls on a date that is not a business day, the applicable date shall 
be the previous business day.
    (e) Payment adjustments in succeeding quarters. Quarterly certified 
statement invoices provided by the Corporation may reflect adjustments, 
initiated by the Corporation or an institution, resulting from such 
factors as amendments to prior quarterly reports of condition, 
retroactive revision of the institution's assessment risk 
classification, and revision of the Corporation's assessment 
computations for prior quarters.
    (f) Request for revision of computation of quarterly assessment 
payment.
    (1) In general. An institution may submit a written request for 
revision of the computation of the institution's quarterly assessment 
payment as shown on the quarterly certified statement invoice in the 
following circumstances:
    (i) The institution disagrees with the computation of the 
assessment base as stated on the quarterly certified statement invoice;
    (ii) The institution determines that the rate multiplier applied by 
the Corporation is inconsistent with the assessment risk classification 
assigned to the institution in writing by the Corporation for the 
assessment period for which the payment is due; or
    (iii) The institution believes that the quarterly certified 
statement invoice does not fully or accurately reflect adjustments 
provided for in paragraph (e) of this section.
    (2) Inapplicability. This paragraph (f) is not applicable to 
requests for review of an institution's assessment risk classification, 
which are covered by Sec.  327.4(c).
    (3) Requirements. Any such request for revision must be submitted 
within 90 days of the date of the quarterly assessment invoice for 
which revision is requested. The request for revision shall be 
submitted to the Chief of the Assessments Section and shall provide 
documentation sufficient to support the revision sought by the 
institution. If additional information is requested by the Corporation, 
such information shall be provided by the institution within 21 days of 
the date of the request for additional information. Any institution 
submitting a timely request for revision will receive written notice 
from the Corporation regarding the outcome of its request. Upon 
completion of a review, the DOF Director shall promptly notify the 
institution in writing of his or her determination of whether revision 
is warranted.
    (g) Quarterly certified statement invoice unavailable. Any 
institution whose quarterly certified statement invoice is unavailable 
on FDICconnect by the fifteenth day of the month in which the payment 
is due shall promptly notify the Corporation. Failure to provide prompt 
notice to the Corporation shall not affect the institution's obligation 
to make full and timely assessment payment. Unless otherwise directed 
by the Corporation, the institution shall preliminarily pay the amount 
shown on its quarterly certified statement invoice for the preceding 
assessment period, subject to subsequent correction.


Sec.  327.4  Assessment rates.

    (a) Assessment risk classification. For the purpose of determining 
the annual assessment rate for insured depository institutions under 
Sec.  327.9, each insured depository institution will be assigned an 
``assessment risk classification.'' Notice of an institution's current 
assessment risk classification will be provided to the institution with 
each quarterly certified statement invoice. Adjusted assessment risk 
classifications for prior periods may also be provided by the 
Corporation. Notice of the procedures applicable to requests for review 
will be included with the assessment risk classification.
    (b) Payment of assessment at rate assigned. Institutions shall make 
timely payment of assessments based on the assessment risk 
classification assigned in the notice provided to the institution 
pursuant to paragraph (a) of this section. Timely payment is required 
notwithstanding any request for review filed pursuant to paragraph (c) 
of this section. If the classification assigned to an institution in 
the notice is subsequently changed, any excess assessment paid by the 
institution will be credited by the Corporation, with interest, and any 
additional assessment owed shall be paid by the institution, with 
interest, in the next assessment payment after such subsequent 
assignment or change. Interest payable under this paragraph shall be 
determined in accordance with Sec.  327.7.
    (c) Requests for review. An institution that believes any 
assessment risk classification provided by the Corporation pursuant to 
paragraph (a) if this section is incorrect and seeks to change it must 
submit a written request for review of that assessment risk 
classification. Any such request must be submitted within 90 days of 
the date of the assessment risk classification being challenged 
pursuant to paragraph (a) of this section. The request shall be 
submitted to the Corporation's Director of the Division of Insurance 
and Research in Washington, DC, and shall include documentation 
sufficient to support the reclassification sought by the institution. 
If additional information is requested by the Corporation, such 
information shall be provided by the institution within 21 days of the 
date of the request for additional information. Any institution 
submitting a timely request for review will receive written notice from 
the Corporation regarding the outcome of its request. Upon completion 
of a review, the Director of the Division of Insurance and Research (or 
designee) or the Director of the Division of Supervision and Consumer 
Protection (or designee), as appropriate, shall promptly notify the 
institution in writing of his or her determination of whether 
reclassification is warranted. Notice of the procedures applicable to 
reviews will be included with the assessment risk classification notice 
to be provided pursuant to paragraph (a) of this section.

[[Page 28800]]

    (d) Disclosure restrictions. The portion of an assessment risk 
classification assigned to an institution by the Corporation pursuant 
to paragraph (a) of this section that reflects any supervisory 
evaluation or confidential information is deemed to be exempt 
information within the scope of Sec.  309.5(g)(8) of this chapter and, 
accordingly, is governed by the disclosure restrictions set out at 
Sec.  309.6 of this chapter.
    (e) Limited use of assessment risk classification. The assignment 
of a particular assessment risk classification to a depository 
institution under this part 327 is for purposes of implementing and 
operating a risk-based assessment system. Unless permitted by the 
Corporation or otherwise required by law, no institution may state in 
any advertisement or promotional material the assessment risk 
classification assigned to it pursuant to this part.
    (f) Effective date for changes to risk classification. Any change 
in risk classification that results from a change in an institution's 
supervisory rating shall be applied to the institution's assessment:
    (1) If an examination causes the change in an institution's 
supervisory rating and an examination start date exists, as of the 
examination start date;
    (2) If an examination causes the change in an institution's 
supervisory rating and no examination start date exists, as of the date 
the institution's supervisory rating (CAMELS) change is transmitted to 
the institution; or
    (3) Otherwise, as of the date that the FDIC determines that the 
change in the supervisory rating occurred.


Sec.  327.5  Assessment base.

    (a) Quarter end balances and average daily balances. An insured 
depository institution shall determine its assessment base using 
quarter end balances until changes in the quarterly report of condition 
allow it to report average daily deposit balances on the quarterly 
report of condition, after which--
    (1) An institution that becomes newly insured after the first 
report of condition allowing for average daily balances shall determine 
its assessment base using average daily balances; otherwise,
    (2) An insured depository institution reporting assets of $300 
million or more on the first report of condition allowing for average 
daily balances shall within one year determine its assessment base 
using average daily balances;
    (3) An insured depository institution reporting less than $300 
million in assets on the first report of condition allowing for average 
daily balances ``
    (i) May continue to determine its assessment base using quarter end 
balances; or
    (ii) May opt permanently to determine its assessment base using 
average daily balances after notice to the Corporation, but
    (iii) Shall use average daily balances as the permanent method for 
determining its assessment base for any quarter beginning six months 
after the institution reported that its assets equaled or exceeded $300 
million for two consecutive quarters; and
    (4) In any event, an insured depository institution that is a 
subsidiary of another insured depository institution that determines 
its assessment base using average daily balances and files its report 
of condition on a consolidated basis by including a subsidiary bank(s) 
or savings association(s) shall use average daily balances as the 
permanent method for determining its assessment base; assessment bases 
shall be determined separately for each consolidated institution.
    (b) Computation of assessment base. Whether computed on a quarter-
end balance or an average daily balance, the assessment base for any 
insured institution that is required to file a quarterly report of 
condition shall be computed by:
    (1) Adding all deposit liabilities as defined in section 3(l) of 
the Federal Deposit Insurance Act, to include deposits that are held in 
any insured branches of the institution that are located in the 
territories and possessions of the United States; and
    (2) Subtracting the following allowable exclusions, in the case of 
any institution that maintains such records as will readily permit 
verification of the correctness of its assessment base--
    (i) Any demand deposit balance due from or cash item in the process 
of collection due from any depository institution (not including a 
foreign bank or foreign office of another U.S. depository institution) 
up to the total of the amount of deposit balances due to and cash items 
in the process of collection due to such depository institution that 
are included in paragraph (b)(1) of this section;
    (ii) Any outstanding drafts (including advices and authorization to 
charge deposit institution's balance in another bank) drawn in the 
regular course of business;
    (iii) Any pass-through reserve balances; and
    (iv) Liabilities arising from a depository institution investment 
contract that are not treated as insured deposits under section 
11(a)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)).
    (c) Newly insured institutions. A newly insured institution shall 
pay an assessment for any assessment period during which it became a 
newly insured institution.


Sec.  327.6  Terminating transfers; other terminations of insurance.

    (a) Terminating institution's final two quarterly certified 
statement invoices. If a terminating institution does not file a report 
of condition for the quarter prior to the quarter in which the 
terminating transfer occurs or for the quarter in which the terminating 
transfer occurs, its assessment base for the quarterly certified 
statement invoice or invoices for which it failed to file a report of 
condition shall be deemed to be its assessment base for the last 
quarter for which the institution filed a report of condition. The 
acquiring institution in a terminating transfer is liable for paying 
the final invoices of the terminating institution. The terminating 
institution's assessment for the quarter in which the terminating 
transfer occurs shall be reduced by the percentage of the quarter 
remaining after the terminating transfer and calculated at the 
acquiring institution's rate. The terminating institution's assessment 
for the quarter prior to the quarter in which the terminating transfer 
occurs shall be calculated at the terminating institution's rate.
    (b) Terminating transfer--Assessment base computation. In a 
terminating transfer, if an acquiring institution's assessment base is 
computed as a quarter-end balance pursuant to Sec.  327.5, its 
assessment base for the assessment period in which the terminating 
transfer occurred shall be reduced by an amount equal to the percentage 
of the assessment period prior to the terminating transfer multiplied 
by the amount of the deposits acquired from the terminating 
institution.
    (c) Other terminations. When the insured status of an institution 
is terminated, and the deposit liabilities of such institution are not 
assumed by another insured depository institution--
    (1) Payment of assessments; quarterly certified statement invoices. 
The terminating depository institution shall continue to file and 
certify its quarterly certified statement invoice and pay assessments 
for the assessment period its deposits are insured. Such terminating 
institution shall not be required to file and certify its quarterly 
certified statement invoice and pay further assessments after the 
depository

[[Page 28801]]

institution has paid in full its deposit liabilities and the assessment 
to the Corporation required to be paid for the assessment period in 
which its deposit liabilities are paid in full, and after it, under 
applicable law, has ceased to have authority to transact a banking 
business and to have existence, except for the purpose of, and to the 
extent permitted by law for, winding up its affairs.
    (2) Payment of deposits; certification to Corporation. When the 
deposit liabilities of the depository institution have been paid in 
full, the depository institution shall certify to the Corporation that 
the deposit liabilities have been paid in full and give the date of the 
final payment. When the depository institution has unclaimed deposits, 
the certification shall further state the amount of the unclaimed 
deposits and the disposition made of the funds to be held to meet the 
claims. For assessment purposes, the following will be considered as 
payment of the unclaimed deposits:
    (i) The transfer of cash funds in an amount sufficient to pay the 
unclaimed and unpaid deposits to the public official authorized by law 
to receive the same; or
    (ii) If no law provides for the transfer of funds to a public 
official, the transfer of cash funds or compensatory assets to an 
insured depository institution in an amount sufficient to pay the 
unclaimed and unpaid deposits in consideration for the assumption of 
the deposit obligations by the insured depository institution.
    (3) Notice to depositors. (i) The terminating depository 
institution shall give sufficient advance notice of the intended 
transfer to the owners of the unclaimed deposits to enable the 
depositors to obtain their deposits prior to the transfer. The notice 
shall be mailed to each depositor and shall be published in a local 
newspaper of general circulation. The notice shall advise the 
depositors of the liquidation of the depository institution, request 
them to call for and accept payment of their deposits, and state the 
disposition to be made of their deposits if they fail to promptly claim 
the deposits.
    (ii) If the unclaimed and unpaid deposits are disposed of as 
provided in paragraph (b)(2)(i) of this section, a certified copy of 
the public official's receipt issued for the funds shall be furnished 
to the Corporation.
    (iii) If the unclaimed and unpaid deposits are disposed of as 
provided in paragraph (b)(2)(ii) of this section, an affidavit of the 
publication and of the mailing of the notice to the depositors, 
together with a copy of the notice and a certified copy of the contract 
of assumption, shall be furnished to the Corporation.
    (4) Notice to Corporation. The terminating depository institution 
shall advise the Corporation of the date on which the authority or 
right of the depository institution to do a banking business has 
terminated and the method whereby the termination has been affected 
(i.e., whether the termination has been effected by the surrender of 
the charter, the cancellation of its authority or license to do a 
banking business by the supervisory authority, or otherwise).
    (c) Resumption of insured status before insurance of deposits 
ceases. If a depository institution whose insured status has been 
terminated is permitted by the Corporation to continue or resume its 
status as an insured depository institution before the insurance of its 
deposits has ceased, the institution will be deemed, for assessment 
purposes, to continue as an insured depository institution and must 
thereafter file and certify its quarterly certified statement invoices 
and pay assessments as though its insured status had not been 
terminated. The procedure for applying for the continuance or 
resumption of insured status is set forth in Sec.  303.5 of this 
chapter.


Sec.  327.7  Payment of interest on assessment underpayments and 
overpayments.

    (a) Payment of interest--(1) Payment by institutions. Each insured 
depository institution shall pay interest to the Corporation on any 
underpayment of the institution's assessment.
    (2) Payment by Corporation. The Corporation will pay interest on 
any overpayment by the institution of its assessment.
    (3) Accrual of interest. (i) Interest on an amount owed to or by 
the Corporation for the underpayment or overpayment of an assessment 
shall accrue interest at the relevant interest rate.
    (ii) Interest on an amount specified in paragraph (a)(3)(i) of this 
section shall begin to accrue on the day following the regular payment 
date, as provided for in Sec.  327.3(c)(2), for the amount so overpaid 
or underpaid, provided, however, that interest shall not begin to 
accrue on any overpayment until the day following the date such 
overpayment was received by the Corporation. Interest shall continue to 
accrue through the date on which the overpayment or underpayment 
(together with any interest thereon) is paid.
    (iii) The relevant interest rate shall be redetermined for each 
quarterly assessment interval. A quarterly assessment interval begins 
on the day following a regular payment date, as specified in Sec.  
327.3(c)(2), and ends on the immediately following regular payment 
date.
    (b) Rates after the first payment date in 1996. (1) On and after 
January 3, 1996, the relevant interest rate for a quarterly assessment 
interval that includes the month of January, April, July, and October, 
respectively, is the coupon equivalent yield of the average discount 
rate set on the 3-month Treasury bill at the last auction held by the 
United States Treasury Department during the preceding December, March, 
June, and September, respectively.
    (2) The relevant interest rate for a quarterly assessment interval 
will apply to any amounts overpaid or underpaid on the payment date 
(whether regular or alternate) immediately prior to the beginning of 
the quarterly assessment interval. The relevant interest rate will also 
apply to any amounts owed for previous overpayments or underpayments 
(including any interest thereon) that remain outstanding, after any 
adjustments to such overpayments or underpayments have been made 
thereon, at the end of the regular payment date immediately prior to 
the beginning of the quarterly assessment interval.


Sec.  327.8  Definitions.

    For the purpose of this part 327:
    (a) Deposits--(1) Deposit. The term deposit has the meaning 
specified in section 3(l) of the Federal Deposit Insurance Act. In 
particular, the term ``deposit'' includes any liability--without regard 
for whether the liability is a liability of an insured bank or of an 
insured savings association--that is of a kind which, had the liability 
been a liability of an insured bank immediately prior to the effective 
date of the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989, would have constituted a deposit in such bank within the 
meaning of section 3(l) of the Federal Deposit Insurance Act as such 
section 3(l) was then in effect.
    (2) Demand deposits. The term demand deposits refers to deposits 
specified in Sec.  329.1(b) of this chapter, except that any reference 
to ``bank'' in such section shall be deemed to refer to ``depository 
institution''.
    (3) Time and savings deposits. The term time and savings deposits 
refers to any deposits other than demand deposits.
    (4) Exception. (i) Deposits accumulated for the payment of personal 
loans, which represent actual loan payments received by the depository 
institution from borrowers and accumulated by the depository 
institution in hypothecated deposit

[[Page 28802]]

accounts for payment of the loans at maturity, shall not be reported as 
deposits on the quarterly report of condition. The deposit amounts 
covered by the exception are to be deducted from the loan amounts for 
which these deposits have been accumulated and assigned or pledged to 
effectuate payment.
    (ii) Time and savings deposits that are pledged as collateral to 
secure loans are not ``deposits accumulated for the payment of personal 
loans'' and are to be reported in the same manner as if they were not 
securing a loan.
    (b) Quarterly report of condition. The term quarterly report of 
condition means a report required to be filed pursuant to section 
7(a)(3) of the Federal Deposit Insurance Act.
    (c) Assessment period--In general. The term ``assessment period'' 
means a period beginning on January 1 of any calendar year and ending 
on March 31 of the same year, or a period beginning on April 1 of any 
calendar year and ending on June 30 of the same year; or a period 
beginning on July 1 of any calendar year and ending on September 30 of 
the same year; or a period beginning on October 1 of any calendar year 
and ending on December 31 of the same year.
    (d) As used in Sec.  327.6(a) and (b), the following terms are 
given the following meanings:
    (1) Acquiring institution. The term acquiring institution means an 
insured depository institution that assumes some or all of the deposits 
of another insured depository institution in a terminating transfer.
    (2) Terminating institution. The term terminating institution means 
an insured depository institution some or all of the deposits of which 
are assumed by another insured depository institution in a terminating 
transfer.
    (3) Terminating transfer. The term terminating transfer means the 
assumption by one insured depository institution of another insured 
depository institution's liability for deposits, whether by way of 
merger, consolidation, or other statutory assumption, or pursuant to 
contract, when the terminating institution goes out of business or 
transfers all or substantially all its assets and liabilities to other 
institutions or otherwise ceases to be obliged to pay subsequent 
assessments by or at the end of the assessment period during which such 
assumption of liability for deposits occurs. The term terminating 
transfer does not refer to the assumption of liability for deposits 
from the estate of a failed institution, or to a transaction in which 
the FDIC contributes its own resources in order to induce a surviving 
institution to assume liabilities of a terminating institution.

    Note: The following attachments will not appear in the Code of 
Federal Regulations.

Attachment A--Call Report Instructions for Cash Items in Process of 
Collection

    Cash items in process of collection include:
    (1) Checks or drafts in process of collection that are drawn on 
another depository institution (or on a Federal Reserve Bank) and 
that are payable immediately upon presentation in the United States. 
This includes:
    (a) Checks or drafts drawn on other institutions that have 
already been forwarded for collection but for which the reporting 
bank has not yet been given credit (``cash letters'').
    (b) Checks or drafts on hand that will be presented for payment 
or forwarded for collection on the following business day.
    (c) Checks or drafts that have been deposited with the reporting 
bank's correspondent and for which the reporting bank has already 
been given credit, but for which the amount credited is not subject 
to immediate withdrawal (``ledger credit'' items).
    However, if the reporting bank has been given immediate credit 
by its correspondent for checks or drafts presented for payment or 
forwarded for collection and if the funds on deposit are subject to 
immediate withdrawal, the amount of such checks or drafts is 
considered part of the reporting bank's balances due from depository 
institutions.
    (2) Government checks drawn on the Treasurer of the United 
States or any other government agency that are payable immediately 
upon presentation and that are in process of collection.
    (3) Such other items in process of collection that are payable 
immediately upon presentation and that are customarily cleared or 
collected as cash items by depository institutions in the United 
States, such as:
    (a) Redeemed United States savings bonds and food stamps.
    (b) Amounts associated with automated payment arrangements in 
connection with payroll deposits, federal recurring payments, and 
other items that are credited to a depositor's account prior to the 
payment date to ensure that the funds are available on the payment 
date.
    (c) Federal Reserve deferred account balances until credit has 
been received in accordance with the appropriate time schedules 
established by the Federal Reserve Banks. At that time, such 
balances are considered part of the reporting bank's balances due 
from depository institutions.
    (d) Checks or drafts drawn on another depository institution 
that have been deposited in one office of the reporting bank and 
forwarded for collection to another office of the reporting bank.
    (e) Brokers' security drafts and commodity or bill-of-lading 
drafts payable immediately upon presentation in the U.S. (See the 
Glossary entries for ``broker's security draft'' and ``commodity or 
bill-of-lading draft'' for the definitions of these terms.)
    Exclude from cash items in process of collection:
    (1) Cash items for which the reporting bank has already received 
credit, provided that the funds on deposit are subject to immediate 
withdrawal. The amount of such cash items is considered part of the 
reporting bank's balances due from depository institutions.
    (2) Credit or debit card sales slips in process of collection 
(report as noncash items in Schedule RC-F, item 5, ``Other'' 
assets). However, when the reporting bank has been notified that it 
has been given credit, the amount of such sales slips is considered 
part of the reporting bank's balances due from depository 
institutions.
    (3) Cash items not conforming to the definition of in process of 
collection, whether or not cleared through Federal Reserve Banks 
(report in Schedule RC-F, item 5, ``Other'' assets).
    (4) Commodity or bill-of-lading drafts (including arrival 
drafts) not yet payable (because the merchandise against which the 
draft was drawn has not yet arrived), whether or not deposit credit 
has been given. (If deposit credit has been given, report as loans 
in the appropriate item of Schedule RC-C, part I; if the drafts were 
received on a collection basis, they should be excluded entirely 
from the bank's balance sheet, Schedule RC, until the funds have 
actually been collected.)

Attachment B--Additional Float Analysis

Eliminate the Float Deduction

    If the standard float deductions were eliminated, holding all 
else equal, the aggregate assessment base would have increased by 
about 2.7 percent, as of December 31, 2005. Table 2 illustrates how 
individual assessment bases would have changed if the standard float 
deductions were eliminated as of that date. Institutions in Table 2 
are ranked by percentage change in their assessment bases, from 
least change on the left to greatest change on the right. The table 
shows, for example, that the median (50th percentile) change would 
have been a 3 percent increase. Table 2 also demonstrates that the 
assessment bases of the vast majority of institutions would have 
increased between 1.3 and 6.1 percent, but the assessment bases of a 
few institutions would have increased by much larger percentages. 
(The largest change for a single institution would have been a 20 
percent increase.)

Table 2.--Percentage Increase in Assessment Bases at Various Percentiles if the Current Float 
Deduction Were Eliminated

              
              
              

                
Percentile
1
              
5
              
10
              
20
              
30
              
40
              
50
              
60
              
70
              
80
              
    
90
              
95
              
    
99
              
    

                
Percent change in assessment base
                
1.0%
              
1.3%
              
1.7%
              
2.2%
              
2.6%
              
2.9%
              
3.0%
              
3.5%
              
3.9%
              
4.4%
              
5.2%
              
6.1%
              
   9.3%
              
              


                                     
    The 100 institutions whose assessment bases would have increased 
by the greatest percentage include several bankers' banks and trust 
banks and other banks of many different sizes, but no thrifts or 
extremely large institutions. Small to medium-sized institutions 
(including many thrifts) predominate among the 100 institutions 
whose assessment bases would have increased by the smallest 
percentage; however, some large institutions are also represented.
    Table 3 compares the percentage of the industry aggregate 
assessment base held by institutions grouped by asset size, with and 
without float deductions, as of December 31, 2005. Based on this 
analysis, eliminating the float deductions would only minimally 
affect the relative distribution of the aggregate assessment base 
among institutions of different asset sizes (although it would have 
a greater effect on the assessment bases of some individual 
institutions).

Table 3.--Current Float/No Float Comparison by Institution Asset Size

Table 4 compares the percentage of the industry aggregate
assessment base held by charter type (commercial banks versus
thrifts), with and without float deductions, as of December 31,
2005. With the current standard float deductions (16 percent for
demand deposits, 1 percent for time and savings deposits),
institutions that hold a larger percentage of demand deposits'typically, 
commercial banks'hold a relatively smaller
percentage of the aggregate assessment base. Nevertheless, given
Table 4, eliminating the float deductions would only minimally
affect the relative distribution of the aggregate assessment base
between banks and thrifts (although, again, it would have a greater
effect on the assessment bases of some individual institutions).     

Table 4.--Current Float/No Float Comparison by Charter Type  

Deduct Actual Float

    Using data as of December 31, 2005, Table 5 illustrates how
individual assessment bases would have changed if institutions
deducted the cash items in process of collection Call Report item as
a proxy for actual float. Institutions in Table 5 are ranked by
percentage change in their assessment bases, from greatest decrease
on the left to greatest increase on the right. The table shows, for
example, that the median (50th percentile) change would have been a
1.6 percent increase. Table 5 also demonstrates that the assessment
bases of the vast majority of banks would have changed between -1.3
and 4.2 percent. (However, the assessment bases of a few banks would
have increased or decreased by much larger percentages.)                                



Table 5.--Percentage Change in Assessment Bases at Various Percentiles if Cash Items 
(as a Proxy for Actual Float) Were Deducted 

Medium-sized banks predominate among those institutions whose
assessment bases would have increased by the greatest percentage.
Many large banks are included among the institutions whose
assessment bases would have decreased by the greatest percentage.
    Again using data from December 31, 2005, Table 6 compares the
percentage of the aggregate assessment base held by medium-sized,
large, and very large banks (collectively, banks with assets of at
least $300 million) under the current standard float deduction and
the actual float deduction, using the cash items in process of
collection Call Report item as a proxy for actual float. Based on
this analysis, it appears unlikely that using actual float would
result in a major change in the relative distribution of the
aggregate assessment base among institutions of different sizes, at
least among the medium to largest institutions. However, the FDIC
has no proxy for actual float at

[[Page 28804]]

smaller banks or for OTS-supervised savings institutions of any
size. 

Table 6.--Comparison of Current Float Deduction to Cash Items (as a Proxy for Actual Float) 
Deduction for Medium-Sized, Large, and Very Large Banks
 

* Banks include commercial banks and FDIC-supervised savings banks.
** Percentages are of the aggregate base of medium, large, and very large commercial and savings banks only. 

Federal Deposit Insurance Corporation.
    
By order of the Board of Directors.

    
Dated at Washington, DC this 9th day of May, 2006.

Robert E. Feldman,
Executive Secretary.
[FR Doc. 06-4657 Filed 5-17-06; 8:45 am]

BILLING CODE 6714-01-P