The federal bank deposit insurer’s board plans a vote next Tuesday to rescind its 2024 Bank Merger Act rule policy statement, replacing it with the previous statement, and to hear an update on its Deposit Insurance Fund (DIF) restoration plan, the agency said late Tuesday.
The rescission and replacement was proposed in March with a 30-day comment period that ended April 10. In its proposal notice, the agency added that it expected to request comment “on all aspects of the regulatory framework governing the FDIC’s review of bank merger transactions in connection with a future proposal to comprehensively revise its merger policy.”
Also slated Tuesday is a semiannual report on the agency’s DIF restoration plan. The plan was initiated in 2020 after the fund’s reserve ratio had declined to 1.3%, below its statutory minimum of 1.35% of insured deposits.
The fund has seen other declines since then, including in the wake of three bank failures in 2023 (Silicon Valley Bank [SVB] of Santa Clara, Calif., and Signature Bank of New York, N.Y., in 2023 and First Republic Bank of San Francisco in May) coupled with strong deposit growth. To address the failures, a special assessment was imposed on 114 banks having large amounts of uninsured deposits in late 2023.
The DIF was reported to have had a reserve ratio of 1.28% at year-end 2024. The restoration plan aims to see the fund return to at least 1.35% by Sept. 30, 2028, a deadline set by statute.
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