FDIC Proposes Mitigating Deposit Insurance Assessment Effects in Pandemic-Related Programs and Facilities

The FDIC proposed a rule change that would reduce the impact of deposit insurance assessments on insured depository institutions participating in the Small Business Administration's Paycheck Protection Program ("PPP"), the Federal Reserve Board's Paycheck Protection Program Lending Facility ("PPPLF") and Money Market Mutual Fund Liquidity Facility ("MMLF").

According to the FDIC, the proposal would "mitigate the deposit insurance assessment effects" for depository institutions involved in the PPP, PPPLF and MMLF by:

• eliminating the effect of a depository institution's participation in the PPP and PPPLF on certain risk measures and adjustments used in calculating the deposit insurance assessment rate;

• offsetting the increase in a participating depository institution's assessment base caused by loans from the PPPLF and MMLF; and

• removing from consideration participation in the PPPLF and MMLF programs in categorizing depository institutions as "small, large, or highly complex for assessment purposes."

Comments on the proposal are due within seven days following publication in the Federal Register.