Washington – The Federal Deposit Insurance Corporation (FDIC) Board of Directors has unveiled the first semiannual update for 2024 on their Restoration Plan, aiming to bolster the agency’s Deposit Insurance Fund (DIF). Staff projections indicate that the reserve ratio is set to meet the statutory minimum of 1.35 percent well ahead of the September 30, 2028 deadline.
FDIC Chairman Martin J. Gruenberg emphasized, “Reaching the statutory minimum reserve ratio before the statutory deadline strengthens the DIF’s ability to withstand unexpected losses and lessens the chance of pro-cyclical assessment increases.” As of December 31, 2023, the DIF reserve ratio stood at 1.15 percent, an uptick from the previous year’s 1.11 percent. The fund balance reached $121.8 billion by the end of the year, with growth outpacing insured deposit growth.
The Restoration Plan was initially established on September 15, 2020, to restore the DIF reserve ratio after a surge in deposits during the first half of 2020 pushed it below the statutory minimum. The Board amended the plan on June 21, 2022, due to projections indicating potential failure to meet the required reserve ratio by the statutory deadline. This led to an increase in deposit insurance assessment rates for all insured depository institutions.
Under the Federal Deposit Insurance Act (FDI Act), the FDIC Board is mandated to adopt a restoration plan when the DIF’s reserve ratio falls below 1.35 percent. The latest update reflects significant progress towards stabilizing and strengthening the nation’s deposit insurance system.
RELATED: FDIC Board Unveils Deposit Insurance Fund Restoration Update
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