FDIC Proposes Increase to Deposit Insurance Rates

The FDIC Board of Directors ("the Board") proposed to increase initial base deposit insurance assessment rates uniformly by two basis points for all insured depository institutions. The Board also proposed to implement an Amended Restoration Plan to account for the increased assessment rates. The proposed rule is aimed at increasing the likelihood that the reserve ratio will meet the statutory minimum of 1.35 percent by the statutory deadline of September 30, 2028.

Comment on the proposed rule is due by August 20, 2022.

Acting FDIC Chair Martin J. Gruenberg stated that it is "[b]etter to take prudent but modest action earlier in the statutory eight-year period to reach the minimum reserve ratio of the Deposit Insurance Fund than to delay and potentially have to consider a larger increase in assessments at a later time when banking and economic conditions may be less favorable."

CFPB Director Rohit Chopra asserted that "[g]iven the serious risk of missing the statutory deadline, it is critical that the board take steps now, while banking industry profits are robust." He encouraged the Board to focus on long-term solutions to adjusting premiums in response to changing economic conditions to avoid the need for another major corrective action in the future.