FDIC Board Approves Final Rule on Prepaid Assessments
Source: Federal Deposit Insurance Corporation

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today voted to require insured institutions to prepay slightly over three years of estimated insurance assessments. The pre-payment allows the FDIC to strengthen the cash position of the Deposit Insurance Fund (DIF) immediately without immediately impacting earnings of the industry.
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Payment of the prepaid assessment, along with the payment of institutions’ regular third quarter assessment, will be due on December 30, 2009. The FDIC estimates that it will collect approximately $45 billion from total prepaid assessments. The payments will come from the industry’s substantial liquid reserve balances, which as of June 30, totaled more than $1.3 trillion, or 22 percent more than a year ago.

Unlike a special assessment, which the FDIC collected on September 30, this prepayment will not immediately affect bank earnings. 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.

+ Final Rule on Prepaid Assessments (PDF; 110 KB)

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