Our Position

Deposit Insurance

Position

  • Our nation’s federal deposit insurance system is critical to depositor confidence in the banking system, to the protection of small depositors, and to the funding base of community banks. A strong Deposit Insurance Fund (DIF) is important to maintaining the public’s confidence the FDIC has adequate resources to protect the nation’s depositors.
  • ICBA supports a deposit insurance assessment framework that is appropriately tiered and risk weighted.
  • ICBA opposes sharp, procyclical increases to deposit insurance assessments.
  • ICBA encourages the FDIC to create a systemic risk premium, which would require the nation’s largest TBTF institutions to pay a premium on their deposit insurance assessments based on the unique risk they pose to the DIF in the event one of these institutions required resolution.
  • ICBA opposes increases to deposit insurance assessments that are based on the DIF achieving a 2% designated reserve ratio rather than the statutory minimum of 1.35%.

Background

Deposit insurance has been the stabilizing force of our nation’s banking system for more than 85 years. It promotes public confidence by providing safe and secure depositories for small businesses and individuals alike.

Deposit Insurance Fund Restoration Plan. The Federal Deposit Insurance Act requires the FDIC to maintain a minimum reserve ratio for the DIF of 1.35 percent and to establish a Deposit Insurance Fund Restoration Plan if the reserve ratio falls below the statutory minimum.

Due to economic stimulus measures enacted in response to the pandemic, and elevated savings rates during this time, quarterly deposit growth rates outpaced deposit growth in the DIF causing the reserve ratio to decline below the required 1.35 percent minimum.

In September 2020, the FDIC adopted a plan to restore the DIF by September 2028 and found no increases to deposit insurance assessments were necessary to do so. Nonetheless, the FDIC published a final rule in 2022 which uniformly increased the base deposit insurance assessment rate for all banks by 2 basis points until the DIF reaches a “designated reserve ratio” of 2 percent. The 2 percent goal is the FDIC’s long-term goal for the DIF reserve ratio – it is not a ratio the FDIC is required, under any law, to maintain.

Staff Contact

Christopher Cole

Christopher Cole

Executive Vice President, Senior Regulatory Counsel

Washington, DC

Email

Jenna Burke

Jenna Burke

Executive Vice President and General Counsel, Government Relations & Public Policy

Washington, DC

Email

ICBA: Insured Deposits Are Safe at a Community Bank

Feb. 25, 2022

ICBA Press Release Banner 2020

Washington, D.C. (Feb. 25, 2022) — The Independent Community Bankers of America (ICBA) today reminded consumers and community banking customers that their insured deposits are safe and backed by the full faith and credit of the federal government through the Federal Deposit Insurance Corp. (FDIC).

The FDIC fully insures funds held in FDIC-insured community banks up to $250,000 per depositor and $250,000 per owner for certain retirement accounts.

“Community banks are stable and well-capitalized,” said ICBA President and CEO Rebeca Romero Rainey. “Community banking customers can continue to bank with confidence knowing their money is safe because it is insured by the FDIC. Since the FDIC was founded in 1933, no one has ever lost a penny of FDIC-insured funds.”

The FDIC insures deposits and protects depositors' funds in banks and savings associations. FDIC deposit insurance covers each depositor, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest. Customers should look for an official FDIC sign at each teller window or teller station in their local community bank to know their institution is covered by FDIC insurance.

According to the FDIC, insurance covers all types of deposits received by a financial institution in its usual course of business, including savings and checking accounts, NOW accounts, money market deposit accounts, Christmas club accounts, and time deposits like certificates of deposit. Cashiers' checks, officers' checks, expense checks, loan disbursement checks, interest checks, outstanding drafts, negotiable instruments and money orders drawn on the institution are also protected by the FDIC.

“If you are having difficulties managing your finances, talk with your local community banker,” said Romero Rainey. “Community banks have been around for generations and have weathered many storms. We are here to serve our customers and communities for the long haul.”

The FDIC's Electronic Deposit Insurance Estimator is an interactive application that can help you learn about deposit insurance and calculate the insurance coverage of your accounts. You can also check online to ensure your bank is FDIC-insured. For more information on community banks, visit www.icba.org. To find a local community bank, visit www.banklocally.org.

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

# # #