FDIC to consider final rule on special assessment for very large banks to cover uninsured deposits

A final rule designed to spread a special deposit insurance assessment among 113 banks having large amounts of uninsured deposits will be considered by the board of the federal bank deposit insurance agency when it meets Nov. 16, the agency announced late Thursday.

The Federal Deposit Insurance Corp. (FDIC) Board will also hear a semiannual update on its restoration plan for the bank insurance fund (BIF).

In May, the FDIC Board proposed a rule to cover uninsured deposits that were held at the now-defunct Silicon Valley Bank (SVB) of Santa Clara, Calif., and Signature Bank of New York, N.Y. Both banks failed in March and held large amounts of uninsured deposits.

Under the proposal, banking organizations with total assets of more than $50 billion each would pay more than 95% of the special assessment. The FDIC has also said that no banking organizations with total assets under $5 billion would be subject to the special assessment.

When the banks failed, the FDIC said it would cover the uninsured depositors at both institutions under the “systemic risk exemption” in federal banking law. The agency estimated that about $15.8 billion in costs of the failures of the two banks was attributable to the protection of uninsured depositors at the two institutions.

The meeting is set for 10 a.m. ET on Nov. 16; video will be presented live via the Internet, the agency said.

FDIC Board meeting, Sunshine Act Notice