The FDIC proposed reducing deposit insurance assessments by 2 basis points for banks subject to the small bank scorecard, as advocated by ICBA.
Details: The FDIC proposed:
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Decreasing initial base deposit insurance assessment rate schedules uniformly by 2 basis points for insured depository institutions that meet the proposed definition of a small institution.
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Decreasing the assessment rate by 1 basis point for institutions that meet the proposed definition of a large institution or the definition of a highly complex institution, while the reserve ratio is below 2%.
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Raising the dollar threshold in the assessment regulations used to define small and large institutions from $10 billion to $30 billion and providing for future adjustments pursuant to a pre-determined indexing methodology.
More: Assessment rate calculators are available on the FDIC website to allow institutions to estimate their assessment rate under the proposed changes. Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.
ICBA View: ICBA has long advocated reducing deposit insurance assessments for community banks when the Deposit Insurance Fund reaches its 1.35% statutory minimum to ensure community banks do not bear the cost of the risk posed by too-big-to-fail institutions.
Statement: In a national news release, ICBA President and CEO Rebeca Romero Rainey said the proposal follows the FDIC’s 2023 special assessment exemption for the vast majority of community banks, which recognized the importance of distinguishing large banks that pose systemic risk to the financial system from the thousands of community banks dedicated to serving their local communities.