Banks insured by the Federal Deposit Insurance Corp. (FDIC) will soon be required to prepay slightly over three years of estimated insurance assessments, the FDIC's board of directors decided Thursday.
‘The comment letters we received over this past month made clear that the FDIC and the industry are of the same mind: We will do whatever it takes to maintain the public's confidence in insured institutions, and we remain committed to maintaining the independence of the Deposit Insurance Fund through direct industry funding,’ says FDIC Chair Sheila Bair.
Payment of the prepaid assessment, along with the payment of institutions' regular third-quarter assessment, will be due Dec. 30. The FDIC estimates that it will collect approximately $45 billion from total prepaid assessments.
The payments will come from the industry's liquid reserve balances, which, as of June 30, totaled more than $1.3 trillion.
Unlike a special assessment, which the FDIC collected on Sept. 30, this prepayment will not immediately affect bank earnings, the FDIC says. Banks will book the payments at the end of each quarter. While the prepayment will immediately improve the FDIC's liquidity, it will not have an impact on the fund balance.
SOURCE: Federal Deposit Insurance Corp.