Capital framework, crypto impact, CRA, merger review among key items in FDIC annual performance plan

Implementation of the Basel III capital framework and assessments of the impact on bank safety and soundness of risks related to crypto assets and climate change are among the “core responsibilities” for the federal bank deposit insurance agency for 2022, according to the agency’s acting board chairman in a message released Thursday.

In the “Chairman’s Message” for the Federal Deposit Insurance Corp.’s (FDIC) 2022 Annual Performance Plan, Acting Chairman Martin Gruenberg also wrote that the agency will additionally “pay increased attention to cybersecurity and other technology-related risks to IDIs (insured depository institutions) and maintain our ongoing engagement with our fellow regulators to address the risks to both domestic and international financial stability posed by large, systemically important financial institutions.”

The annual performance plan outlines the agency’s program descriptions and performance goals. It typically includes new items the agency is pursuing, as well as continuing ones (such as as the FDIC’s deposit insurance fund (DIF) reaching an equity ratio of 1.35% by Sept. 30, 2028, which the report says the agency is on track to before that date).

Gruenberg’s comments also noted that the FDIC will work with other federal banking agencies “to modernize and strengthen the Community Reinvestment Act (CRA) to ensure that IDIs invest in their local communities.” He also committed the agency to (working with other banking regulators) to “continue to pursue broader participation by all segments of the population in the U.S. banking system.”

Outside of Gruenberg’s comments, the report also states the agency will continue reviewing the regulatory framework and process used by it and the other banking agencies to review proposed bank mergers “to consider their effectiveness in meeting statutory requirements, such as competitive factors, the convenience and needs of the community, and financial stability.”

That point was one of contention late last year when Gruenberg and other FDIC Board directors wanted to take action, which then-Chairman Jelena McWilliams opposed. McWilliams ultimately resigned, leaving in February. Although she did not mention the flap over the merger issue as the reason for her departure, the three Democrats on the board had resolved to continue pursuing it over her objections.

Other key points in the performance plan included:

  • As of Dec. 31, 2021, the FDIC insured more than 827 million accounts with more than $9.7 trillion in depositor funds at 4,839 institutions across the nation.
  • The number of problem banks was 44 as of the end of last year, which the agency said was well below the peak of 888 in March 2011. No banks failed in 2021, FDIC reported, marking the seventh year in a row with few or no failures.

FDIC 2022 Annual Performance Plan

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