Statement by Chairman Martin J. Gruenberg on the Revised Notice of Proposed
Rulemaking on Deposit Insurance Assessments for Small Banks
January 21, 2016
In June of last year, the Board authorized publication of a notice of proposed rulemaking
to amend the calculation of deposit insurance assessment rates for small banks – that is, banks
with less than $10 billion in assets. As staff mentioned, we received almost 500 comments on
the proposal.
After careful analysis of the comments, the Board is considering today a revised notice of
proposed rulemaking, which includes the following main changes:
The revised proposal would alter the one-year asset growth measure so that it
would increase assessment rates only when one-year asset growth exceeds 10
percent.
The revised NPR also would use a brokered deposit ratio as one of the financial
ratios used to calculate a bank’s assessment rate. Consistent with a number of
comments, this ratio would treat reciprocal deposits and Federal Home Loan Bank
advances the same way the current system does.
The revised proposal would allow assessments to better differentiate riskier banks from
safer banks just as well as last year’s proposal, and would allocate the costs of maintaining a
strong Deposit Insurance Fund accordingly. Like the proposal approved last year, the revised
proposal before the Board today is revenue neutral, so that it will not change the aggregate
amount that the FDIC expects to collect from small banks. Taken together with the decline in
rates associated with the Deposit Insurance Fund reaching a reserve ratio of 1.15 percent, more
than 93 percent of small banks would have rate decreases.
Rulemaking on Deposit Insurance Assessments for Small Banks
January 21, 2016
In June of last year, the Board authorized publication of a notice of proposed rulemaking
to amend the calculation of deposit insurance assessment rates for small banks – that is, banks
with less than $10 billion in assets. As staff mentioned, we received almost 500 comments on
the proposal.
After careful analysis of the comments, the Board is considering today a revised notice of
proposed rulemaking, which includes the following main changes:
The revised proposal would alter the one-year asset growth measure so that it
would increase assessment rates only when one-year asset growth exceeds 10
percent.
The revised NPR also would use a brokered deposit ratio as one of the financial
ratios used to calculate a bank’s assessment rate. Consistent with a number of
comments, this ratio would treat reciprocal deposits and Federal Home Loan Bank
advances the same way the current system does.
The revised proposal would allow assessments to better differentiate riskier banks from
safer banks just as well as last year’s proposal, and would allocate the costs of maintaining a
strong Deposit Insurance Fund accordingly. Like the proposal approved last year, the revised
proposal before the Board today is revenue neutral, so that it will not change the aggregate
amount that the FDIC expects to collect from small banks. Taken together with the decline in
rates associated with the Deposit Insurance Fund reaching a reserve ratio of 1.15 percent, more
than 93 percent of small banks would have rate decreases.
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As we have done previously, to help banks understand the potential effect of the revised
proposed rule, the FDIC is publishing an online assessment calculator that will allow institutions
to estimate their assessment rates under the revised proposal.
I support publication of this revised NPR and welcome public comment. And I thank the
staff for their excellent work on this revised NPR.
As we have done previously, to help banks understand the potential effect of the revised
proposed rule, the FDIC is publishing an online assessment calculator that will allow institutions
to estimate their assessment rates under the revised proposal.
I support publication of this revised NPR and welcome public comment. And I thank the
staff for their excellent work on this revised NPR.