With the Federal Reserve's interest rate hikes hastening the normalization of deposits, the FDIC should respond by quickly drawing down its assessment rate increase, ICBA Chairman Brad Bolton wrote in a new op-ed.
ICBA op-ed: FDIC should draw down assessment rate increase
December 13, 2022 / By ICBA
With the Federal Reserve's interest rate hikes hastening the normalization of deposits, the FDIC should respond by quickly drawing down its assessment rate increase, ICBA Chairman Brad Bolton wrote in a new op-ed.
With the Federal Reserve's interest rate hikes hastening the normalization of deposits, the FDIC should respond by quickly drawing down its assessment rate increase, ICBA Chairman Brad Bolton wrote in a new op-ed.
Disproportionate Impact: In American Banker, the president and CEO of Community Spirit Bank in Red Bay, Ala., said the rate increase ignores Quarterly Banking Profile data and would disproportionately affect community banks—raising assessments by more than 50% for many.
ICBA Recommendation: “With the FDIC's unnecessary and harmful assessment increase going into effect at a time of rising interest rates and slowing deposit totals, the agency can and should reduce deposit insurance assessments for community banks when the DIF reaches its 1.35% statutory minimum,” Bolton said.
Background: ICBA has repeatedly expressed opposition to the FDIC’s rule raising deposit insurance assessment rates by 2 basis points on all insured institutions, effective Jan. 1.
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