FDIC Seeks Public Input on a Proposed Assessment on Insured Banks to Raise More Than Fifteen Billion Dollars to Safeguard Deposits

Daniel C. Conlon, dconlon@tuckerlaw.com, (412) 594-3951

The FDIC (Federal Deposit Insurance Corporation) is inviting public feedback on a proposed rule that aims to levy a special assessment on all banks with FDIC-insured deposits. Set to go into effect on January 1, 2024, the FDIC will commence collecting these assessments during the first quarter of that year.

This assessment seeks to recoup losses suffered by the Deposit Insurance Fund (“Fund”) due to the closure of two prominent banks this year: Silicon Valley Bank and Signature Bank. Compliance with the FDI Act also requires this assessment.[1]

Whenever a bank shuts down, the FDIC intervenes as the receiver to safeguard depositors’ funds. However, it’s important to note that not all the money in a bank is insured. The FDIC’s objective is to ensure that the Fund possesses sufficient resources to cover uninsured deposits in the event of future bank failures.

Under the proposed rule, the FDIC plans to calculate the special assessment based on each bank’s estimated uninsured deposits as of December 31, 2022, reported to the FDIC. The initial $5 billion of uninsured deposits for each bank will be exempted. If a bank operates as part of a holding company, the assessment will be determined at the bank level by the FDIC.

The FDIC aims to collect these special assessments at a rate of approximately 12.5 basis points annually, spanning eight quarters. As per FDIC’s estimates, this proposed assessment will generate $15.8 billion in revenue for the Fund. Should the estimated Fund loss change over time, the FDIC retains the authority to adjust the collection period or impose additional assessments to bridge the gap.

To provide comments on the proposed assessment, individuals can submit their feedback online, via email, or through traditional mail by following the instructions available on the official website.

[1] 12 U.S.C. 1823(c)(4)(G)

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