Letter on the Interim Final re: Special Assessment Collection

Dear Ms. Jones:

On behalf of the American Bankers Association (ABA), we appreciate the FDIC's thoughtful changes in the Interim Final Rule regarding the special assessment collection. The decision to reduce the eighth-quarter rate from 3.36 basis points to 2.97 basis points minimizes overcollection risk while ensuring the Deposit Insurance Fund (DIF) remains fully protected.

While we appreciate the FDIC’s efforts to minimize overcollection, we believe further adjustments are warranted to ensure alignment with declining and uncertain loss estimates. As discussed more fully below, we recommend no collection this quarter with a true-up after SVB litigation concludes, or alternatively, collecting only half of the planned eighth-quarter special assessment.

We continue to urge the FDIC bolster its processes to ensure future systemic risk exceptions, resolutions, and special assessments collectively are fair, fact-based, transparent, and predictable.

Long-term Structural Improvements 

ABA believes aligning the risk of the deposit insurance fund to the risk-based pricing system would be a positive step forward. We encourage the FDIC to continue its analysis of switching the reserve ratio denominator and publish the results of its analysis for public comment.

Recommendation for Further Adjustment

We urge the FDIC to consider deferring collection this quarter, with a true-up to occur after the SVB litigation concludes and receiverships terminate. This approach would ensure precision and fairness, avoiding unnecessary liquidity burdens while aligning with the principle of minimizing overcollection.

Alternative Option: While full deferral is our preferred approach, we recognize the FDIC may seek partial collection to maintain predictability. If the FDIC determines that some collection is necessary, we suggest collecting only half of the originally planned eighth-quarter special assessment, approximately 1.68 basis points instead of 2.97 basis points. This would reduce near-term costs by roughly $950 million while preserving flexibility for a final adjustment once actual losses are known.

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