FDIC Proposes Assessment to Recoup Losses to the Deposit Insurance Fund

The FDIC proposed imposing special assessments to recover losses to the Deposit Insurance Fund ("DIF") resulting from the FDIC making whole all uninsured depositors of Silicon Valley Bank ("SVB") and Signature Bank.

The FDIC estimated that the total amount to be collected under the special assessments would be $15.8 billion. Under the proposal, the FDIC said that the special assessment would (i) be collected over an eight-quarter collection period (which period could be shortened or extended based upon actual losses realized by DIF) and (ii) with a quarterly rate of 3.13 basis points. In certain circumstances, the assessment used for the calculation would exclude the first $5 billion from estimated uninsured deposits reported as of December 31, 2022.

The FDIC also may choose to impose a "one-time final shortfall special assessment" in order to collect the amount of actual losses.

The proposed effective date is January 1, 2024. Comments on the proposal will be due 60 days following publication in the Federal Register.

Statement

FDIC Chair Martin J. Gruenberg supported the proposal for "ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits" and applying the special assessment to banking organization types that benefitted most from DIF’s protection of uninsured depositors. He added that the proposal will help to maintain liquidity while allowing financial institutions to continue to meet demands for credit.