Today, the FDIC finalized controversial changes to the DIF assessment base and large-bank premiums.  As required by the Dodd-Frank Act, the rules change the DIF’s assessment base from an institution’s deposits to its average consolidated total assets minus average tangible equity, largely tracking the proposal (see FSM Report DEPOSITINSURANCE92) but including substantial changes for custodial banks brokered deposits.

The rule finalizes the little-changed proposal for assessing large banks (see FSM Report DEPOSITINSURANCE93), with staff defending the contentious proposal in part on grounds that it does not adversely affect all insured depositories with assets of $10 billion.  Although the rule was adopted unanimously, Acting Comptroller Walsh repeated his prior concerns that the large bank rule is complex, questioning how it will work when applied to the new assessment base.  Similarly, Acting OTS Director Bowman questioned whether the industry had sufficient time to put the necessary systems in place to meet the April 1 effective date, although he too supported the final rule.  Chairman Bair agreed that any “unintended consequences” could be revisited. This report analyzes today’s session, with in-depth analyses to follow of these complex actions.

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