Banking Law Prof Blog

Don't Miss Out on One-Time Assessment Credit

FDIC reminds banks that the deadline to seek review of One-Time Assessment Credit Eligibility is December 18, 2006.  A Preliminary Statement of One-Time Credit for each insured institution is available for viewing on FDICconnect.  Institutions are advised to check their Preliminary Statements and seek review if appropriate.

Link to FIL-101-2006 (Nov. 17, 2006):  http://www.fdic.gov/news/news/financial/2006/fil06101.html

(ag) Nov. 20, 2006, in Deposit Insurance Assessments

Dollars Out the Door

The impact of FDIC's new assessment rules, adopted Nov. 2, 2006, is that banks will acutally pay deposit insurance premiums for the first time since 1996.  Well-capitalized, well-managed institutions will pay between 5 and 7 basis points of their total domestic deposits.  This assessment is necessary to bring the Designated Reserve Ratio up to 1.25%.  The DRR had dropped to 1.23% in June.  The good news is that the Deposit Insurance Reform Act provided that banks which had paid premiums into the Bank Insurance Fund prior to 1996 receive a credit.  According to a Nov. 2, 2006, American Banker Article by Joe Adler, "FDIC Approves New Premiums on Industry",  approximately 70% of banks can use that credit to avoid paying an assessment in the first year and 30% can use the credit to escape assessment payments for 2 years.

(ag) Nov. 3, 2006, in Deposit Insurance Assessments

Big Banks & FDIC Insurance Assessments

America's largest banks oppose several aspects of FDIC's proposed changes to Risk Based Assessment. 

Check out Bank of America Corporation's Sept. 22 Comment Letter:

www.fdic.gov/regulations/laws/federal/2006/06c443ad09.pdf

and Citigroup's Sept. 26 Comment Letter:

www.fdic.gov/regulations/laws/federal/2006/06c540ad09.pdf

To date, FDIC's website shows 625 Comment Letters regarding the Risk Based Assessment Proposal.

(ag) Sept. 29, 2006, in Deposit Insurance/Assessments