FDIC Proposes Extending Access to Assessment Credits
Community banks under $10 billion in assets will have extended access to deposit-insurance assessment credits under a new FDIC proposal.
The FDIC is proposing to apply the credits to quarterly deposit insurance assessments for as long as the Deposit Insurance Fund reserve ratio remains over 1.35 percent, instead of the current 1.38 percent threshold.
Under current policy long advocated by ICBA, community banks under $10 billion qualify for roughly $750 million in credits once the DIF reserve ratio reaches 1.35 percent and can begin redeeming them once it hits 1.38 percent. While the DIF threshold has not yet topped 1.38 percent, the FDIC earlier this year notified qualifying community banks of their individual credit amount.
The regulations implement an ICBA-advocated provision in the Dodd-Frank Act requiring the FDIC to offset the cost of increasing the reserve ratio from 1.15 percent to 1.35 percent on institutions with less than $10 billion in assets.
The proposed regulation is effective immediately with a 30-day comment period. The FDIC will in the coming days release its second-quarter Quarterly Banking Profile with information on whether the reserve ratio has topped 1.38 percent.
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ICBA Backs Plan for Assessment Credits
ICBA expressed support for an FDIC proposal to suspend community bank credits to deposit-insurance assessments only if the Deposit Insurance Fund reserve ratio falls below 1.35 percent, rather than 1.38 percent.
In a comment letter
, ICBA said it also supports the FDIC’s idea of fully remitting any remaining credits after eight quarterly assessment periods.
The FDIC recently announced that roughly $764 million in assessment credits are headed to community banks with assets under $10 billion. In a recent Main Street Matters post
, ICBA's Chris Cole details the long-awaited assessments, which were triggered when the DIF reserve ratio surpassed 1.38 percent.