The FDIC board of directors voted 3-2 to approve its special assessment to replenish the Deposit Insurance Fund with an ICBA-supported exemption for the vast majority of community banks.
Details: As advocated by ICBA, the FDIC finalized the special assessment as proposed. It:
Exempts community banks with less than $5 billion in uninsured deposits, ensuring that no community banks with less than $5 billion in assets will pay any special assessment.
Will be tied to applicable financial institutions’ estimated uninsured deposits.
Will offset the $16.3 billion of the total cost of the failures of Silicon Valley Bank and Signature Bank of New York attributable to the protection of uninsured depositors.
Will be collected at an annual rate of 13.4 basis points beginning with the first quarterly assessment period of 2024.
ICBA Advocacy: Since the immediate aftermath of the March bank failures, ICBA has called on the FDIC to exempt community banks from bearing financial responsibility for replenishing the DIF. In a July comment letter that coincided with a grassroots advocacy campaign encouraging community banker letters of support, ICBA expressed strong support for the proposal and urged the FDIC to finalize it as proposed.
Meeting Cancellation: The FDIC approved the special assessment on a “notational” vote—without a public vote or open meeting—after it abruptly canceled its open meeting scheduled for Thursday. The FDIC canceled the meeting without an announcement a week after issuing a notice on the meeting with its agenda.
Misconduct Reports: The cancellation came amid reports of misconduct at the agency, which has led to the agency hiring a law firm to review its workplace culture as well as to questions and criticism from Congress. FDIC Vice Chairman Travis Hill and Director Jonathan McKernan on Thursday issued a joint statement calling on FDIC Chairman Martin Gruenberg and General Counsel Harrel Pettway to recuse themselves from the review process.
Notational Vote: Notational voting was at the center of a controversy at the agency two years ago, when then-Chairman Jelena McWilliams opposed an effort by other members of the board to require a review of the agency’s bank-merger framework. McWilliams said at the time that Pettway has previously communicated that the board members’ notational vote could not be added to meeting minutes because it was not valid.