Proposed 2024 FDIC Operating Budget

The FDIC Board is considering today a proposed 2024 FDIC Operating Budget of $2.96 billion. The total proposed budget reflects a reduction of 6.3 percent from the total 2023 FDIC Operating Budget. The Receivership Funding component of the proposed budget is funded at $350 million, a reduction of 57.5 percent from this year’s $825 million Receivership Funding budget due to the completion of much of the post–failure workload associated with the three large regional bank failures that occurred earlier this year. The Ongoing Operations component of the proposed budget is funded at just over $2.56 billion, an increase of about $275 million, or 12 percent, from 2023.

This proposed budget was formulated following this year’s three large regional bank failures and reflects the lessons learned from those failures. Although the FDIC successfully fulfilled its core mission responsibilities of maintaining financial stability and protecting insured depositors in resolving those bank failures, the resources of the FDIC were strained during that period, and we identified several areas where we needed to strengthen our existing capabilities on a long–term basis. The proposed budget directly addresses those needs.

Of particular importance, the proposed budget includes substantial new resources — building on resources added earlier this year in the immediate aftermath of the three bank failures — to increase staffing to perform expanded supervisory monitoring of large insured institutions on an ongoing basis to support early detection of emerging risks and quicker action to ensure that banks are taking the necessary steps to mitigate such risks. That includes resources to address recommendations made by our Chief Risk Officer in reviews of FDIC supervision of the institutions that failed. New staffing resources are also provided to ensure that the FDIC is prepared to act quickly and effectively to resolve the failure of another large regional bank if that were to become necessary.

Further, the proposed budget provides additional resources to address the potential risks to depositors and consumers of emerging technologies that are beginning to be used by banks, such as the use of artificial intelligence in credit underwriting models. Additionally, we are adding dedicated examination staff to enhance our oversight of complex institutions that are offering products that pose the greatest potential risk of consumer harm, including those offered through third parties.

We will also continue our efforts to educate the public about what products FDIC deposit insurance covers and does not cover and to take decisive action to address misleading representations about whether funds invested in some of those products are, in fact, insured.

The proposed budget includes substantial funding to continue our multi–year IT Modernization Program and our multi–year Facilities Modernization effort. Both of these initiatives are critical to ensuring that the FDIC’s future workforce will have the tools and resources needed to continue fulfilling our important mission.

I would like to thank all the members of the FDIC Board for their constructive contributions, and the Vice Chairman in particular for his helpful suggestions in finalizing the proposed budget.

I would also like to express my appreciation to all of the FDIC employees who played a role in putting the proposed budget together. Their contributions and hard work have presented us with a responsible and forward–looking budget and staffing proposal for 2024 that I am very pleased to support.