Credit unions that converted to a bank charter to escape NCUSIF assessments may be disappointed by an FDIC report presented to its Board of Directors this week that said despite fewer bank failures, its assessments may not decrease for six years.
The fourth quarter 2011 report stated that even though the FDIC’s deposit insurance fund has increased to $11.8 billion as of Dec. 31, up from a nearly $21 billion deficit as of year-end 2009, the Dodd-Frank Act required the FDIC to increase its reserve ratio to 1.35% by 2020. As of 2011 year-end, the ratio was 0.17%.
To meet the new requirement, FDIC staff told directors Monday that assessments may not decrease until the second half of 2018. Currently, FDIC-insured institutions pay between $3.3 billion and $3.45 billion in assessment premiums each quarter.
Depending upon a bank’s risk category that works out to between 5 and 35 basis points.