Alert November 16, 2010

FDIC Proposes Implementation of Dodd-Frank Assessment Changes and a Revised Assessment System for Large Banks

The FDIC approved two proposed rules that would amend the deposit insurance assessment regulations. The first proposal would implement a provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act that changes the assessment base from one based on domestic deposits to one based on assets. Because this change would significantly increase the assessment base for banks, the proposal also suggests lowering assessment rates so that the total amount collected through assessments would not materially change. The second proposal replaces a proposed rule revising the deposit insurance assessment system for large banks (with at least $10 billion in assets) that was approved by the FDIC on April 13, 2010. The second proposal would eliminate risk categories and debt ratings from the assessment calculation for large banks and would instead use scorecards. The scorecards would include financial measures that are predictive of long-term performance. Click here for the FDIC’s press release which includes links to the proposals.