As required by the Dodd-Frank Act, the FDIC finalized a rule to increase the deposit insurance fund from 1.15% of insured deposits to 1.35% by 2020.
Under a rule adopted in 2011, assessment rates for all banks will decline by 2 or more basis points the quarter after the fund reaches 1.15%, which is anticipated for the second quarter of 2016 (possibly the third quarter if insured deposit growth exceeds expectations). Under the finalized rule, starting that same quarter, banks under $10 billion will accrue credits for the portion of their assessments that contribute to growth of the fund above 1.15%. Banks will be allowed to use their credits without limit to cover assessments once the fund reaches 1.38% – a provision incorporated into the final rule following comments by ABA.
At the same time, the rule requires banks with over $10 billion in assets to pay 4.5 basis-point annual surcharge assessments until the fund reaches the 1.35% target, or until the fourth quarter of 2018. If needed, there will be a one-time “shortfall assessment” in the first quarter of 2019 to bring the fund to 1.35%.
View the final rule.
Read ABA’s summary of the rule.