The Federal Deposit Insurance Corporation (FDIC) has recently implemented a special assessment to address the potential risks posed by certain financial institutions. This assessment aims to recover the loss to the Deposit Insurance Fund (DIF) resulting from the protection of uninsured depositors following the closures of Silicon Valley Bank in Santa Clara, CA, and Signature Bank in New York, NY.
According to the FDIC, the agency will collect a $16.3 billion special assessment at a quarterly rate of 3.36 basis points. This assessment will be multiplied by an insured depository institution’s (IDI) estimated uninsured deposits reported for the first quarter that ended on December 31, 2022. It is important to note that the first $5 billion in estimated uninsured deposits from the IDI will be excluded from the assessment calculation. For IDIs that are part of a holding company with one or more subsidiary IDIs, the assessment will be applied at the banking organization level.
The FDIC plans to collect this special assessment over eight quarterly assessment periods. However, the collection period may change if there are updates to the estimated loss or if assessments collected change due to corrective amendments to the amount of uninsured deposits reported for the December 31, 2022, reporting period.
Cost-Benefit Analysis
The FDIC conducted an analysis of the final rule’s expected effects, including a discussion of the types of entities that will benefit and the effects on the industry. The analysis also covered capital and earnings, economic conditions, and alternatives considered to the final rule.
Agency Actions Relevant to Regulatory Flexibility Act (RFA)
FDIC stated that the final rule is not subject to the RFA since it directly relates to the rates imposed on FDIC-insured institutions. Nevertheless, they voluntarily provided information in an RFA section. The FDIC does not believe the final rule will have a direct effect on any small entity, as no small entity has reported $5 billion or more in uninsured deposits.
Agency Actions Relevant to Unfunded Mandates Reform Act of 1995
As an independent regulatory agency, the FDIC is not subject to the Unfunded Mandates Reform Act.
Agency Actions Relevant to the Administrative Pay-As-You-Go Act of 2023
Again, as an independent regulatory agency, the FDIC is not subject to the Administrative Pay-As-You-Go Act.
Other Relevant Information or Requirements
The FDIC published a proposed rule on May 22, 2023, and received 312 comment letters from various stakeholders. The agency responded to these comments in the final rule.
Statutory Authorization for the Rule
The FDIC promulgated this final rule under several sections of the United States Code related to banking and finance.
Executive Order No. 12866 (Regulatory Planning and Review)
As an independent regulatory agency, the FDIC is not subject to this Executive Order.
Executive Order No. 13132 (Federalism)
Again, the FDIC, as an independent regulatory agency, is not subject to this Executive Order.
In conclusion, the FDIC has implemented a special assessment to address systemic risks stemming from the closure of specific financial institutions. This assessment will help the FDIC recover the loss to the Deposit Insurance Fund while considering the impact on insured depository institutions. The FDIC has conducted a thorough analysis of the rule’s effects and has taken relevant agency actions in accordance with applicable laws and regulations.
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