ABA Urges FDIC to Return Assessment Credits ASAP

In a comment letter to the FDIC today, the American Bankers Association again called on the agency to return deposit insurance assessment credits owed to banks as expeditiously as possible, so that they can support the institutions’ lending and liquidity. ABA noted that some 5,212 banks are owed assessment credits totaling $764.4 million as of mid-year 2019, and called on the FDIC to remit any residual credits to banks “after credits have applied against assessments for no more than three more quarters (next July or sooner.)”

Under a provision of the Dodd-Frank Act, banks with less than $10 billion in assets were not held responsible to recapitalize the FDIC insurance fund from 1.15% to 1.35%. After the fund reached 1.35% in September of 2018, the FDIC calculated that $764 million of premiums paid were due back to below-$10 billion banks, and accordingly allocated assessment credits to be used against future assessments. ABA added that “short of a dramatic downturn, which the FDIC does not foresee,” there should be little risk to the Deposit Insurance Fund from returning the credits by next July at the latest.