FDIC Agrees with ABA Request, Will Return Residual Assessment Credits After Four Quarters

Acting on a request made by the American Bankers Association, the FDIC agreed to rebate outstanding assessment credits after they have been applied against premiums for four quarters—instead of waiting for eight quarters. This means that banks with credits left after the first quarter 2020 should expect to receive refunds of the entire outstanding balances by their September 2020 invoice.

Under the Dodd-Frank Act, banks with less than $10 billion in assets were not held responsible to recapitalize the Deposit Insurance Fund from 1.15% to 1.35%. After the fund reached 1.35% in September 2018, the FDIC calculated that $765 million of premiums paid were due back to 5,212 banks and allocated assessment credits to be used against future assessments as long as the fund exceeded 1.38% of insured deposits. Of this, $559 million was applied against second- and third-quarter 2019 assessments.

ABA supported the FDIC’s proposal in August to lower the minimum to apply credits from 1.38% to 1.35%, a provision that the FDIC codified today—which may be irrelevant with the fund now at 1.41%. The FDIC also proposed that any credits left after eight quarters would be rebated. ABA countered that residual credits should be returned to the banks after no more than four quarters, where the money can be put to better use to support lending and bank services.

This story has been updated.