FDIC board proposes rate increase for deposit insurance

The FDIC board proposed on Oct. 7 to raise deposit insurance rates in order to meet its statutory obligation to rebuild the reserve ratio to at least 1.15 percent of estimated insured deposits. Assessment rates would rise by 7 basis points (annualized) beginning on Jan. 1, 2009; in addition, in the

second quarter the FDIC would begin charging riskier institutions higher rates. Proposed changes include assessing higher rates to institutions with a significant reliance on secured liabilities. The proposal also would assess higher rates for institutions with a significant reliance on brokered deposits but, for well-managed and well-capitalized institutions, only when accompanied by rapid asset growth. The FDIC hopes to have the DIF fully recapitalized by 2013.