Ohio Senators Urge FDIC to Protect Regional Banks when Implementing Special Assessment
Senate Banking Committee Chair Sherrod Brown (D-OH) and Senator J.D. Vance (R-OH) urged the FDIC to protect "Main Street focused" regional banks when implementing its proposed special assessment on insured depository institutions. The proposed special assessment is intended to cover the costs associated with the failures of Silicon Valley Bank and Signature Bank.
In a Letter addressed to FDIC Chair Martin J. Gruenberg, the Ohio Senators urged the FDIC to focus the proposed special assessment on financial institutions' uninsured deposits that have the greatest run risk. The Senators asked that the FDIC consider (i) excluding collateralized and affiliate deposits when calculating an institution’s amount of uninsured deposits and (ii) using post-bank failure deposit data from March 31, 2023 to "better reflect the migration of deposits to the largest megabanks." The Senators argued that these large banks "already have a disproportionate competitive advantage" in the U.S. banking system and that regional banks have a "significantly smaller proportion of uninsured deposits" which have a lesser chance of a run in a crisis.
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