| TO: |
CHIEF EXECUTIVE OFFICER |
| SUBJECT: |
Changes to Payment Dates and the
Interest Rate Computation for Assessments |
On September 26, 1995, the FDIC's Board of Directors approved a final rule on
assessments that affects payment dates, prepayments and interest rate calculations. A copy
of the Federal Register notice explaining the final rule is attached.
The major change involves the quarterly payments of assessments. The first quarterly
payment will be due the first business day after January 1 rather than December 30 of the
previous year. This eliminates a possible fifth assessment payment in 1995 that would have
been required under the previous rule for institutions that use the cash-basis method of
accounting.
The final rule provides additional flexibility for institutions to schedule payments to
accommodate their particular financial operations. Specifically, the FDIC is providing the
options of (1) prepaying assessment premiums for the upcoming quarter or semiannual period
and (2) doubling the invoiced payment on March 30, June 30, September 30 or December 30,
with advance notice to the FDIC. No double payment is allowed for the January payment
dates.
Other key provisions of the final rule are:
- Interest on assessment underpayments or overpayments will be tied to the three-month
Treasury bill rate, rather than an average over a 12-month period of the Treasury's value
of funds rate. This change is intended to ensure that the interest charged or reimbursed
will more closely reflect market conditions.
- A technical amendment to the final rule advances the announcement of the semiannual rate
schedule for Bank Insurance Fund members to 15 days before the invoice date instead of the
current 45-day advance notice period
INSTRUCTIONS FOR PREPAYMENTS AND DOUBLED PAYMENTS
Institutions wishing to prepay their assessment premium
should complete the attached Prepayment Certification
Form (Form I). This form allows institutions to prepay
their assessment on December 30 preceding the beginning
of the first semiannual period.
Institutions wishing to double their invoiced amount
should complete the December Doubled-Payment Certification
Form (Form II). Institutions electing to pay twice the
invoiced amount are also prepayers, as indicated in Form II.
Certification Forms should be returned to the FDIC
(Assessment Operations, 3501 North Fairfax Drive, Room
6029-S, Arlington, VA 22226) no later than November 1.
The institution's chief executive officer, or an officer
designated by the institution's board of directors, must
sign the appropriate form.
For more information about the final rule, please call the FDIC's Deposit Insurance
Assessment Information Line toll-free at 800-759-6596 or 202-898-7090 (in the Washington,
DC, area) between 8:30 a.m. and 4:30 p.m., Eastern Time.
|
Allan K. Long
|
|
Assistant Director, Treasury Branch |
Attachments
Distribution: Insured Banks and Savings Associations
Form I
PREPAYMENT CERTIFICATION FORM
(ALTERNATE PAYMENT DATE - DECEMBER 30*) THE UNDERSIGNED INSTITUTION HEREBY CERTIFIES THAT IT ELECTS TO MAKE THE PAYMENT DUE FOR THE FIRST QUARTER OF THE FIRST SEMIANNUAL PERIOD OF 1996, AND THE PAYMENT DUE FOR THE FIRST QUARTER OF THE FIRST SEMIANNUAL PERIOD OF EACH SUBSEQUENT YEAR, IN AN AMOUNT EQUAL TO THE INVOICED AMOUNT IN ACCORDANCE WITH THE PROCEDURES AND REQUIREMENTS OF PART 327 OF THE FDIC's RULES AND REGULATIONS, 12 C.F.R. PART 327. THIS ELECTION IS EFFECTIVE FOR THE UPCOMING YEAR AND REMAINS IN EFFECT UNTIL TERMINATED. (Name of Institution) (FDIC Certificate Number)
---------------------------------------- -------------------------------- (Contact Name) (Phone Number)
---------------------------------------- -------------------------------- (Signature and Title of Certifying Official) (Date)
---------------------------------------- -------------------------------- (Fax Number-Provide Only If Confirmation of Receipt is Desired)
----------------------------------------------------------------------------- THIS FORM MUST BE POSTMARKED OR FAXED
TO (703) 516-5327 BY NOVEMBER 1, 1995 ATTENTION: Federal Deposit Insurance Corporation
Division of Finance
Assessment Operations Section
3501 N. Fairfax Drive Rm. VS 6029-S7
Arlington, VA 22226-3500
*Note: In 1995, December 30 is a Saturday; institutions must fund their accounts by December 29 for the ACH quarterly debit.
Form II
DECEMBER DOUBLED-PAYMENT
CERTIFICATION FORM THE UNDERSIGNED INSTITUTION HEREBY CERTIFIES THAT IT ELECTS TO PAY TWICE THE INVOICED AMOUNT OF THE FIRST QUARTERLY PAYMENT FOR THE SEMIANNUAL PERIOD BEGINNING ON JANUARY 1, 1996, AND TWICE THE INVOICED AMOUNT OF THE FIRST QUARTERLY PAYMENT FOR THE SEMIANNUAL PERIOD BEGINNING ON JANUARY 1 OF EACH SUBSEQUENT YEAR, IN ACCORDANCE WITH THE PROCEDURES AND REQUIREMENTS OF PART 327 OF THE FDIC's RULES AND REGULATIONS, 12 C.F.R. PART 327. THIS DOUBLED-PAYMENT ELECTION IS EFFECTIVE WITH THE PAYMENT MADE ON THE DECEMBER 30 PAYMENT DATE AND TO ALL DECEMBER 30 PAYMENT DATES UNTIL TERMINATED. (Name of Institution) (FDIC Certificate Number)
---------------------------------------- -------------------------------- (Contact Name) (Phone Number)
---------------------------------------- -------------------------------- (Signature and Title of Certifying Official) (Date)
---------------------------------------- -------------------------------- (Fax Number-Provide Only if Confirmation of Receipt is Desired)
----------------------------------------------------------------------------- THIS FORM MUST BE POSTMARKED OR FAXED
TO (703) 516-5327 BY NOVEMBER 1, 1995 ATTENTION: Federal Deposit Insurance Corporation
Division of Finance
Assessment Operations Section
3501 N. Fairfax Drive - Rm. VS 6029-S7
Arlington, VA 22226
Note: This Doubled-Payment Certification requires that institutions prepay the first quarterly payment on December 30, or if December 30 is a holiday or weekend, the preceding business day.
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