A proposal to revise federal deposit insurance regulations to automatically apply small-bank credits to quarterly assessments when the bank deposit insurance fund ratio is at least 1.35% is out for a 30-day public comment period under action taken Tuesday.
The Federal Deposit Insurance Corp. (FDIC) applies the small-bank assessment credits to insured depository institutions that had less than $10 billion in assets, and that contributed to the growth in the Deposit Insurance Fund (DIF) reserve ratio at some point between July 1, 2016, and September 30, 2018, when the reserve ratio was between 1.15% and 1.35%.
Under the proposal, the FDIC would be required to automatically apply small-bank credits to quarterly assessments when the reserve ratio is at least 1.35%, rather than 1.38% (as required under current regulation). After applying credits for eight quarters, the FDIC would remit to insured depository institutions the nominal value of any remaining small-bank credits.
“The proposal would not change the total amount of credits awarded, but it could affect when the FDIC would apply the credits,” the agency said in a release. “The proposed changes intend to make the application of small bank credits to quarterly assessments more predictable for [insured depository institutions] with these credits, and to simplify the FDIC’s administration of these credits without materially impairing the ability of the FDIC to maintain the required minimum reserve ratio of 1.35%.”
Comments on the proposal will be due 30 days after its publication in the Federal Register.