FDIC: Banks Meet Deposit Insurance Fund Reserve Ratio Ahead of Schedule



The FDIC announced that the Deposit Insurance Fund Reserve Ratio reached 1.36%, exceeding the statutorily required minimum reserve ratio of 1.35% ahead of the September 30, 2020, deadline required under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

FDIC regulations provide for two changes to deposit insurance assessments upon reaching the minimum: 1) surcharges on insured depository institutions with total consolidated assets of $10 billion or more (large banks) will cease; and 2) small banks will receive assessment credits for the portion of their assessments that contributed to the growth in the reserve ratio from between 1.15% and 1.35%, to be applied when the reserve ratio is at or above 1.38%.

Large Bank Surcharges

  • The last quarterly surcharge will be reflected in large banks’ December 2018 assessment invoices, which cover the assessment period from July 1 through September 30.
  • March 2019 assessment invoices, which cover the assessment period from October 1, 2018, through December 31, 2018, no longer will include a quarterly surcharge.

Small Bank Credits

  • Small banks will receive credits for the portion of their assessments that contributed to growth in the reserve ratio between 1.15% and 1.35%.
  • The FDIC estimates the aggregate amount of credits to be approximately $750 million.
  • The FDIC plans to notify each small bank of its individual credit amount in January 2019 through FDICconnect.
  • Credits automatically will be applied each quarter that the reserve ratio is at least 1.38%, up to the full amount of a small bank’s credit or assessment, whichever is less.

No Change to Assessment Rates

  • Assessment rates, which declined for all banks when the reserve ratio first surpassed 1.15% in the third quarter of 2016, will remain unchanged.
  • Assessment rates are scheduled to decrease when the reserve ratio exceeds 2%.

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