WASHINGTON – In a shocking move, the Federal Deposit Insurance Corporation (FDIC) Board of Directors has approved a notice of proposed rulemaking that would implement a special assessment to recover the cost associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
The proposed rule would target banking organizations that benefitted most from the protection of uninsured depositors, while ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits. The FDIC estimates that of the total cost of the failures of Silicon Valley Bank and Signature Bank, approximately $15.8 billion was attributable to the protection of uninsured depositors.
“The proposal applies the special assessment to the types of banking organizations that benefitted most from the protection of uninsured depositors, while ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits,” said FDIC Chairman Martin J. Gruenberg. “The proposal also promotes maintenance of liquidity, which will allow institutions to continue to meet the credit needs of the U.S. economy.”
The FDIC is proposing to collect the special assessment at an annual rate of approximately 12.5 basis points over eight quarterly assessment periods; however, the special assessment rate is subject to change prior to any final rule depending on any adjustments to the loss estimate, mergers or failures, or amendments to reported estimates of uninsured deposits.
According to the proposal, a total of 113 banking organizations would be subject to the special assessment. Banking organizations with total assets over $50 billion would pay more than 95 percent of the special assessment. No banking organizations with total assets under $5 billion would be subject to the special assessment.
The FDIC is estimated to recover the costs associated with the protection of uninsured depositors through the special assessment. The proposal is open for public comment until June 12, 2023, and the final rule is expected to be issued in the coming months.
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Key Facts
- Agency: FDIC
- Category: Financial Crimes
- Source: Official Source â†â€â€ÂÂ
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