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3.4 Revise Assessment Base for FDIC Insurance

<< Title III Overview


3.4        Revise Assessment Base for FDIC Insurance.

The FDIC deposit insurance assessment base, for an insured depository institution, will be redefined by the FDIC to an amount equal to:

        The average consolidated total assets of the insured depository institution during the assessment period; minus

         The sum of:

         The average tangible equity of the insured depository institution during the assessment period; and

        In the case of an insured depository institution that is a custodial bank or a banker's bank, an amount that the FDIC determines is necessary to establish assessments consistent with the existing definition for a custodial bank or banker's bank. [§331]


            The Act increases the minimum reserve ratio for the Deposit Insurance Fund from 1.15 percent to 1.35 percent of estimated insured deposits, or the comparable percentage of the assessment base. The FDIC must take steps necessary to reach the 1.35 percent reserve ratio by September 30, 2020. The FDIC, in establishing assessments necessary to reach this ratio, must offset the effect of the increase in the minimum reserve ratio on insured depository institutions with total consolidated assets of less than $10 billion. [§334] This should be beneficial to small banks but detrimental to larger banks. Importantly, the Act also removes the current cap (1.5 percent of estimated insured deposits) on the Deposit Insurance Fund's reserve ratio.