ICBA expressed support for the FDIC’s final rule exempting the vast majority of community banks from its special assessment to replenish the Deposit Insurance Fund.
ICBA Response: In a national news release, ICBA said the exemption for community banks with less than $5 billion in uninsured deposits recognizes the importance of distinguishing large banks that pose systemic risk from the nation’s community banks.
Exemption Impact: “By finalizing the special assessment as proposed — which ICBA advocated in its July comment letter — the agency’s assessment base will result in no special assessments for any community bank with less than $5 billion in assets following the failures of larger and riskier financial institutions,” ICBA President and CEO Rebeca Romero Rainey said.
Final Rule: Approved 3-2 by the FDIC board of directors on Thursday, the special assessment final rule:
Exempts community banks with less than $5 billion in uninsured deposits, ensuring that no community banks with less than $5 billion in assets will pay any special assessment.
Will be tied to applicable financial institutions’ estimated uninsured deposits.
Will offset the $16.3 billion of the total cost of the failures of Silicon Valley Bank and Signature Bank of New York attributable to the protection of uninsured depositors.
Will be collected at an annual rate of 13.4 basis points beginning with the first quarterly assessment period of 2024.
ICBA Advocacy: Since the immediate aftermath of the March bank failures, ICBA has called on the FDIC to exempt community banks from bearing financial responsibility for replenishing the DIF. In a July comment letter that coincided with a grassroots advocacy campaign encouraging community banker letters of support, ICBA expressed strong support for the proposal and urged the FDIC to finalize it as proposed.
