Compliance Bulletin

CBA Submits Comments on the FDIC’s Deposit Insurance Proposal
September 14, 2015

Under the guidance of its members, last week CBA submitted comments to the FDIC on its revisions to how small banks are assessed deposit insurance premiums. Generally the proposal seeks greater alignment between insurance premiums and risk and to reduce “cross-subsidization” where less risky banks subsidize the activities of more risky banks. Based on the FDIC’s assessment calculator, the proposal would lower premiums for many small banks. Nevertheless, the FDIC proposed three new measures that are only loosely correlated with risk: a “loan mix” that assigns risk weightings to loan categories, rapid asset growth, and a core deposits to total assets ratio. Of particular interest is the treatment of reciprocal deposits as brokered deposits for purposes of the core deposits ratio. See CBA’s comment letter for more information.