DIF Special Assessment

As the law requires and the FDIC Chairman promised after SVB and Signature Bank were declared systemic,1 the FDIC has now proposed a special assessment to compensate the Deposit Insurance Fund (DIF) for the cost of backing the two banks’ uninsured deposits. The FDIC has proposed to do so via an assessment covering IDIs with uninsured-deposit holdings above $5 billion. This thus exempts most smaller banks, with the FDIC adopting this approach on grounds that it justly penalizes IDIs that benefited the most from these systemic rescues. The new assessment would be applied over at least eight quarters beginning in January of 2024, with the FDIC’s analysis persuading it that the capital and income costs of this targeted approach are sustainable at covered insured depository institutions (IDIs).