FDIC: Under $10 Billion Banks to pay only 5-9 Basis Points in Deposit Premiums

The FDIC board of directors today voted to impose parity in the deposit-insurance system by basing the assessment base on total assets minus tangible capital instead of domestic deposits.  Reforming the deposit-insurance system will bolster the FDIC Deposit Insurance Fund and lower premiums for community banks.

Most small community banks, under $10 billion, will only pay pre-tax 5-9 basis points (3.25 to 5.85 basis points after tax) in deposit premiums, instead of the current base rate schedule of 12-16 basis points.

Under the current system, banks with less than $10 billion in assets pay approximately 30 percent of total FDIC premiums, even though they only hold 20 percent of total bank assets.  Updating the system will lower assessments for 98 percent of these banks, saving community banks roughly $4.5 billion over the next three years.

Editors Note: As of 11-18-2010 credit unions are expected to pay 20 to 35 basis point vs. the banks 3.25 to 5.85 basis points estimate.