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Financial Services Law Insights and Observations

FDIC issues final rule on special assessment, moves to collect $16.3 billion

Bank Regulatory FDIC Credit Risk Deposit Insurance Call Report

On November 16, the FDIC approved a final rule to implement a special assessment to recover Deposit Insurance Fund (DIF) losses from protecting uninsured depositors, following the failure of two banks earlier this year. According to the fact sheet, banks that benefited most from assistance provided under systemic risk determination will pay to recover the losses. The FDIC aims to collect $16.3 billion from 114 financial institutions at a quarterly rate of 3.36 basis points over eight quarterly assessment periods, and an annual rate of 13.4 basis points “an increase from the 12.5 basis point annual rate in the [May] proposal.”

The FDIC stated that if enough funds were collected to cover actual or estimated losses, it could cease collection efforts early. Alternatively, if losses surpass the collected amount within the initial eight-quarter collection period, the collection period can be extended for additional quarters. The FDIC also added that if actual losses exceed the collected amounts after the receiverships for both banks end, it can impose a one-time final shortfall assessment.

The special assessment does not apply to any financial institution with less than $5 billion in total assets. The final rule will be effective April 1, 2024, and the first collection for the special assessment is due June 28, 2024.