FDIC Approves Final Rule Amending Deposit Insurance Assessment of Small Banks

The FDIC Board of Directors approved amendments to Part 327 of its rules. The amendments refine the deposit insurance assessment system for small insured depository institutions that have been federally insured for at least five years (i.e., established small banks). Specifically, the approved amendments: (i) revise the financial ratios method to incorporate a statistical model estimating the probability of failure over three years; (ii) update the financial measures used in the financial ratios method to make them consistent with the statistical model, and (iii) eliminate risk categories for small established banks and uses the financial ratios method to determine assessment rates for all such banks.

The final rule will become effective on July 1, 2016.