ICBA Policy Resolutions for 2013
Track I: Legislation and Regulation

DEPOSIT INSURANCE

Position 

• Our nation’s federal deposit insurance system is critical to depositor confidence in the banking system, to the protection of small depositors and the funding base of community banks. A strong Deposit Insurance Fund is important to maintaining public confidence that the FDIC has adequate resources to protect the nation’s depositors.
  
  
• ICBA strongly supported the FDIC’s changes to the deposit insurance assessment system which incorporated the new assessment base. The new rates and the change in the assessment base will save community banks $4.5 billion over three years.
  
  
• ICBA will seek effective implementation of the “hold harmless” provision of Dodd-Frank that shields banks under $10 billion in assets from premiums that will result from increasing the Deposit Insurance Fund minimum reserve ratio from 1.15% to 1.35%.

Background

Deposit insurance has been the stabilizing force of our nation’s banking system for 80 years. It promotes public confidence by providing safe and secure depositories for small businesses and individuals alike.

Deposit Insurance Victories. ICBA achieved several significant and long-sought deposit insurance victories in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law permanently increased deposit insurance coverage to $250,000 per depositor which otherwise would have lapsed and reverted to $100,000 as of January 1, 2014. The Dodd-Frank Act also provides for community bank indemnification from any recapitalization costs associated with raising the DIF minimum reserve ratio from 1.15 to 1.35 percent, and a redefinition of the assessment base as average total consolidated assets minus average tangible equity. These changes helped create parity in the deposit insurance system, by reducing community bank assessments, and helping community banks offset the advantage that large banks have in attracting deposits.

ICBA Strongly Supported the Revised Rate Schedule. ICBA strongly supported the changes to the assessment system which incorporated the new assessment base and established a revised schedule of initial base assessment rates of 5-35 basis points as opposed to 12-45 basis points. The revised rate schedule is saving community banks more than $4.5 billion over a period of three years beginning in the second quarter of 2011.

Staff contact: Chris Cole

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