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.