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FDIC Deposit Insurance

Banks keep America's deposits secure

ABA Position

On August 20, the FDIC Board proposed to amend its rule that determines when assessment credits can be used. As proposed, with the FDIC insurance fund’s balance in excess of 1.38 percent of insured deposits, credits will be applied against assessments as that ratio remains above 1.35 percent, instead of 1.38 percent as at present. Any credits left after first quarter 2021 would be remitted directly to the banks. Comments on the proposal are due by September 30.

The FDIC Deposit Insurance Fund reached a record balance of $104.9 billion as of first quarter 2019. The “reserve ratio” of the fund to insured deposits held at 1.36 percent for the third straight quarter.

The strong growth of the fund’s balance resulted from $5.3 billion in assessments paid by bank in 2018, then $1.4 billion in first quarter 2019 (with an average assessment rate of 0.9 basis points). No bank failed over those five quarters.

Banks, not taxpayers, are entirely responsible for covering all of the FDIC’s expenses. In fact, banks have paid over $100 billion in assessments since the inception of the find, ensuring that no one has ever lost a penny of an insured deposit.

In January, the FDIC allocated $764.4 billion in assessment credits to 5,212 banks with under $10 billion in assets prior to third quarter 2018. This amount reflects the assessments paid by these banks prior to that time that exceeded the amount needed to maintain the fund’s reserve ratio at 1.15 percent (per Dodd-Frank Act §334). With the fund now above 1.38 percent, credits offset assessments for these banks.

The FDIC Deposit Insurance Fund reached a record balance of $104.9 billion as of first quarter 2019. The “reserve ratio” of the fund to insured deposits held at 1.36 percent for the third straight quarter.

The strong growth of the fund’s balance resulted from $5.3 billion in assessments paid by bank in 2018, then $1.4 billion in first quarter 2019 (with an average assessment rate of 0.9 basis points). No bank failed over those five quarters.

Banks, not taxpayers, are entirely responsible for covering all of the FDIC’s expenses. In fact, banks have paid over $100 billion in assessments since the inception of the find, ensuring that no one has ever lost a penny of an insured deposit.

In January, the FDIC allocated $764.4 billion in assessment credits to 5,212 banks with under $10 billion in assets prior to third quarter 2018. This amount reflects the assessments paid by these banks prior to that time that exceeded the amount needed to maintain the fund’s reserve ratio at 1.15 percent (per Dodd-Frank Act §334). With the fund now above 1.38 percent, credits offset assessments for these banks.

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