Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429 Division of Supervision
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information
Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (1-877-275-3342 or (703) 562-2200).
Insurance Assessments
FIL-58-95
September 7, 1995
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Assessment Rates for the Bank Insurance Fund (BIF) and the Savings Association
Insurance Fund
On August 8, 1995, the FDIC Board of Directors voted to reduce the deposit insurance
premiums paid by most members of the Bank Insurance Fund (BIF) but to keep existing
assessment rates intact for members of the Savings Association Insurance Fund (SAIF). The
decisions closely resemble proposals issued for public comment earlier this year. The FDIC
Board also voted to make the new BIF premiums effective the first day of the month after the
BIF recapitalized, based on an analysis of June 30 Call Report data that was expected to be
completed by mid-September. The analysis has been completed and the FDIC has determined
that the BIF was recapitalized at May 31. Accordingly, the new BIF premium rates are effective
as of June 1.
The following provides a brief description of the final rules pertaining to the annual assessment
rates for the BIF and the SAIF. In addition, attached are: (1) a one-page overview of the new
risk-related assessment rates and the number of institutions within each risk category; (2) the
FDIC press release announcing that the BIF was recapitalized at May 31, that refunds of
resulting insurance overpayments would begin, and that the BIF balance had reached $24.7
billion at mid-year 1995; (3) additional details of how the FDIC will calculate assessments and
provide refunds to BIF-insured institutions for overpayments since June 1; and (4) the Federal
Register notices providing the complete rules and analyses supporting the Board's decisions to
reduce BIF premium rates and to retain existing SAIF premium rates.
BIF Assessment Rates
Under the new assessment rate schedule for the BIF, the best-rated institutions will pay an
annual rate of four cents per $100 of assessable deposits, down from the current rate of 23
cents per $100. The weakest institutions will continue to pay 31 cents per $100. The
assessment rates for all nine risk categories are attached.
BIF members that have overpaid their assessments for the period June 1 to September 30 can
expect to receive a refund of any overpayment plus interest at the same rate of interest earned
by the FDIC during that period. Refunds will be made electronically, via a credit through the
automated clearinghouse network that is expected to occur on September 15.
The invoice for fourth-quarter assessment payments was mailed September 5, 1995, the date
the BIF recapitalization was announced. This applies to both BIF- and SAIF-member
institutions. The electronic debit for the fourth quarter assessment will occur on September 29,
1995, as regularly scheduled.Inactive
550 17th Street NW, Washington, DC 20429 Division of Supervision
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information
Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (1-877-275-3342 or (703) 562-2200).
Insurance Assessments
FIL-58-95
September 7, 1995
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Assessment Rates for the Bank Insurance Fund (BIF) and the Savings Association
Insurance Fund
On August 8, 1995, the FDIC Board of Directors voted to reduce the deposit insurance
premiums paid by most members of the Bank Insurance Fund (BIF) but to keep existing
assessment rates intact for members of the Savings Association Insurance Fund (SAIF). The
decisions closely resemble proposals issued for public comment earlier this year. The FDIC
Board also voted to make the new BIF premiums effective the first day of the month after the
BIF recapitalized, based on an analysis of June 30 Call Report data that was expected to be
completed by mid-September. The analysis has been completed and the FDIC has determined
that the BIF was recapitalized at May 31. Accordingly, the new BIF premium rates are effective
as of June 1.
The following provides a brief description of the final rules pertaining to the annual assessment
rates for the BIF and the SAIF. In addition, attached are: (1) a one-page overview of the new
risk-related assessment rates and the number of institutions within each risk category; (2) the
FDIC press release announcing that the BIF was recapitalized at May 31, that refunds of
resulting insurance overpayments would begin, and that the BIF balance had reached $24.7
billion at mid-year 1995; (3) additional details of how the FDIC will calculate assessments and
provide refunds to BIF-insured institutions for overpayments since June 1; and (4) the Federal
Register notices providing the complete rules and analyses supporting the Board's decisions to
reduce BIF premium rates and to retain existing SAIF premium rates.
BIF Assessment Rates
Under the new assessment rate schedule for the BIF, the best-rated institutions will pay an
annual rate of four cents per $100 of assessable deposits, down from the current rate of 23
cents per $100. The weakest institutions will continue to pay 31 cents per $100. The
assessment rates for all nine risk categories are attached.
BIF members that have overpaid their assessments for the period June 1 to September 30 can
expect to receive a refund of any overpayment plus interest at the same rate of interest earned
by the FDIC during that period. Refunds will be made electronically, via a credit through the
automated clearinghouse network that is expected to occur on September 15.
The invoice for fourth-quarter assessment payments was mailed September 5, 1995, the date
the BIF recapitalization was announced. This applies to both BIF- and SAIF-member
institutions. The electronic debit for the fourth quarter assessment will occur on September 29,
1995, as regularly scheduled.Inactive
Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429 Division of Supervision
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information
Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (1-877-275-3342 or (703) 562-2200).
The FDIC expects to process refunds as well as fourth-quarter assessment payments using the
account provided for the June direct-debit collection. More details on refunds and assessment
collections for the fourth quarter are attached.
In connection with the new rate schedule, the FDIC Board established a process for raising or
lowering all rates for BIF-insured institutions semiannually if conditions warrant a change. Under
this new system, the Board will have the flexibility to adjust the entire BIF assessment rate
schedule twice a year without seeking public comment first, but only within a range of five cents
per $100 above or below the premium schedule adopted. Changes in the rate schedule outside
the five-cent range above or below the current schedule will be made by the Board only after a
full rulemaking with opportunity for public comment.
SAIF Assessment Rates
The FDIC Board separately voted to retain the existing SAIF annual assessment rate schedule.
Assessment rates paid by institutions whose deposits are insured by the SAIF will continue to
range from 23 cents to 31 cents per $100 of assessable deposits. Despite the general good
health of the thrift industry, the SAIF is not in good condition and continues to be substantially
undercapitalized. Analysis supporting the Board's decision appears in the attached Federal
Register notice.
For More Information
If you need more information about BIF or SAIF rates, please contact any of the FDIC staff
members listed in the Federal Register attachment on pages 42680 or 42741, respectively.
Questions about refunds or collections may be directed to the FDIC staff members listed in the
attachment from the Division of Finance.
Ricki Helfer
Chairman
Attachments:
FDIC News Release
Federal Register (1,050 kb, PDF help or hard copy), Federal Register (HTML)
Tables:
Table 1
Table 2
Table 3
Table 4
Table 5
Figures:
Figure 1
Figure 2Inactive
550 17th Street NW, Washington, DC 20429 Division of Supervision
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information
Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (1-877-275-3342 or (703) 562-2200).
The FDIC expects to process refunds as well as fourth-quarter assessment payments using the
account provided for the June direct-debit collection. More details on refunds and assessment
collections for the fourth quarter are attached.
In connection with the new rate schedule, the FDIC Board established a process for raising or
lowering all rates for BIF-insured institutions semiannually if conditions warrant a change. Under
this new system, the Board will have the flexibility to adjust the entire BIF assessment rate
schedule twice a year without seeking public comment first, but only within a range of five cents
per $100 above or below the premium schedule adopted. Changes in the rate schedule outside
the five-cent range above or below the current schedule will be made by the Board only after a
full rulemaking with opportunity for public comment.
SAIF Assessment Rates
The FDIC Board separately voted to retain the existing SAIF annual assessment rate schedule.
Assessment rates paid by institutions whose deposits are insured by the SAIF will continue to
range from 23 cents to 31 cents per $100 of assessable deposits. Despite the general good
health of the thrift industry, the SAIF is not in good condition and continues to be substantially
undercapitalized. Analysis supporting the Board's decision appears in the attached Federal
Register notice.
For More Information
If you need more information about BIF or SAIF rates, please contact any of the FDIC staff
members listed in the Federal Register attachment on pages 42680 or 42741, respectively.
Questions about refunds or collections may be directed to the FDIC staff members listed in the
attachment from the Division of Finance.
Ricki Helfer
Chairman
Attachments:
FDIC News Release
Federal Register (1,050 kb, PDF help or hard copy), Federal Register (HTML)
Tables:
Table 1
Table 2
Table 3
Table 4
Table 5
Figures:
Figure 1
Figure 2Inactive