Summary: | On April 12, 2011, the FDIC Board of Directors (FDIC Board) authorized publication of the attached proposed guidelines describing the process that the FDIC would follow to determine whether to make an adjustment to the score used to calculate the assessment rate for a large or highly complex institution, determine the size of any adjustment, and notify an institution of an adjustment. The final rule adopted by the FDIC Board on February 7, 2011, revising the risk-based assessment system applicable to all large and highly complex insured depository institutions, allows the FDIC to make limited adjustments to these scores and provides that the FDIC will not make any adjustments until new guidelines have been published for comment and approved by the FDIC Board. The FDIC seeks comment on the proposed guidelines; comments must be received within 45 days following publication in the Federal Register . The proposed guidelines apply to institutions with $10 billion or more in assets. Statement of Applicability to Institutions under $1 billion: Institutions with total assets of $1 billion or less are exempt from this guidance. |
Highlights:
Continuation of FIL-20-2011 Distribution: Suggested Routing: Note: To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html. Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200). |
Financial Institution Letters FIL-20-2011 April 12, 2011 |
Assessments Statement of Applicability to Institutions under $1 Billion The proposed assessment rate adjustment guidelines apply only to institutions with $10 billion or more in assets. This proposal has no impact on institutions with less than $1 billion in assets. Proposed Assessment Rate Adjustment Guidelines for Large and Highly Complex Institutions On February 7, 2011, the FDIC Board of Directors (FDIC Board) amended its assessment regulations and established a new methodology for calculating deposit insurance assessment rates for highly complex and other large insured institutions (Large Bank Pricing Rule) (76 Fed. Reg. 10672 (Feb. 25, 2011)). The new methodology combines CAMELS ratings and financial measures to produce a score that is translated into an institution's assessment rate. The Large Bank Pricing Rule authorizes the FDIC to adjust an institution's total score by 15 points, up or down; however, the rule provides that the FDIC will not make any adjustments until new guidelines have been published for comment and approved by the FDIC Board. The proposed guidelines, which are attached, describe the process that the FDIC would follow to determine whether to make an adjustment, to determine the size of any adjustment, and to notify an institution of an adjustment. The proposed guidelines also provide examples of circumstances that might give rise to an adjustment. Brief Summary of Proposed Approach
Arthur J. Murton |
Additional Related Topics:
- FDIC Regulations Governing the Assessment Process, 12 CFR Part 327