FDIC: Deposit Insurance Fund Remains On Track to Recapitalization

The Deposit Insurance Fund remains on track to be recapitalized to its statutory level of 1.35% by the statutory deadline of Sept. 30, 2028, FDIC staff said today during an FDIC board meeting. According to the projections, assuming an annual insured deposit growth rate of 4%, the DIF could reach its minimum level by the deadline and still absorb up to $4.8 billion in losses.

In June, noting the surge of roughly $1 trillion in excess insured deposits associated with pandemic-related stimulus programs, the FDIC board voted not to raise deposit insurance assessments on banks in order to recapitalize its insurance fund. FDIC staff said today that they expect that “a good bit of these excess deposits will leave the system over a period of time.”

However, at today’s meeting, FDIC Director Martin Gruenberg noted the uncertainty of projections over an eight-year period and warned that “absent extraordinary circumstances, the FDIC may need to adopt higher assessment rates than those currently in effect.”