FDIC Approves New Assessment Rule for Small Banks
The FDIC board of directors has approved a rule that changes how banks with less than $10 billion in assets and have been FDIC insured for at least five years are assessed for deposit insurance.
“This rule will allow future assessments to better differentiate riskier banks from safer banks,” said FDIC Chairman Martin J. Gruenberg. “Using the FDIC’s experience during the recent financial crisis, this rule will better allocate the costs of maintaining a strong Deposit Insurance Fund. Taken together with the overall decline in rates approved by the board in 2011 that will occur once the reserve ratio reaches 1.15 percent, more than 93 percent of small banks will pay lower assessment rates.”
The change, which goes into effect for July 1, amends part 327 of the FDIC rules and revises the financial ratio method used in assessment calculations so that they are based on “a statistical model estimating the probability of failure over three years,” according to the federal agency. The change also updates the financial measures used in the financial ratios method consistent with the statistical model; and eliminating risk categories for established small banks and using the financial ratios method to determine assessment rates for all such banks.”
A full accounting of the FDIC’s new rule can be found here.
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