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2000 - Rules and Regulations


Subpart B—Implementation of One-Time Assessment Credit

§ 327.30  Purpose and scope.

(a)  Scope. This subpart B of part 327 implements the one-time assessment credit required by section 7(e)(3) of the Federal Deposit Insurance Act, 12 U.S.C. 1817(e)(3) and applies to insured depository institutions.

(b)  Purpose. This subpart B of part 327 sets forth the rules for:

(1)  Determination of the aggregate amount of the one-time credit;

(2)  Identification of eligible insured depository institutions;

(3)  Determination of the amount of each eligible institution's December 31, 1996 assessment base ratio and one-time credit;

(4)  Transferability of credit amounts among insured depository institutions;

(5)  Application of such credit amounts against assessments; and

(6)  An institution's request for review of the FDIC's determination of a credit amount.

[Codified to 12 C.F.R. § 327.30]

§ 327.31  Definitions.

For purposes of this subpart and subpart C:

(a)  The average assessment rate for any assessment period means the aggregate assessment charged all insured depository institutions for that period divided by the aggregate assessment base for that period.

(b)  Board means the Board of Directors of the FDIC.

(c)  De facto rule means any transaction in which an insured depository institution assumes substantially all of the deposit liabilities and acquires substantially all of the assets of any other insured depository institution at the time of the transaction.

(d)  An eligible insured depository institution:

(1)  Means an insured depository institution that:

(i)  Was in existence on December 31, 1996, and paid a deposit insurance assessment before December 31, 1996; or

(ii)  Is a successor to an insured depository institution referred to in paragraph (d)(1)(i) of this section; and

(2)  does not include an institution if its insured status has terminated as of or after the effective date of this regulation.

(e)  Merger means any transaction in which an insured depository institution merges or consolidates with any other insured depository institution. Notwithstanding part 303, subpart D, for purposes of this subpart B and subpart C of the part, merger does not include transactions in which an insured depository institution either directly or indirectly acquires the assets of, or assumes liability to pay any deposits made in, any other insured depository institution, but there is not a legal merger or consolidation of the two insured depository institutions.

(f)  Resulting institution refers to the acquiring, assuming, or resulting institution in a merger.

(g)  Successor means a resulting institution or an insured depository institution that acquired part of another insured depository institution's 1996 assessment base ratio under paragraph 327.33(c) of this subpart under the de facto rule.

[Codified to 12 C.F.R. § 327.31]

§ 327.32  Determination of aggregate credit amount.

The aggregate amount of the one-time credit shall equal $4,707,580,238.19.

[Codified to 12 C.F.R. § 327.32]

§ 327.33 Determination of eligible institution's credit amount.

(a)  Subject to paragraph (c) of this section, allocation of the one-time credit shall be based on each eligible insured depository institution's 1996 assessment base ratio.

(b)  Subject to paragraph (c) of this section, an eligible insured depository institution's 1996 assessment base ratio shall consist of:

(1)  Its assessment base as of December 31, 1996 (adjusted as appropriate to reflect the assessment base of December 31, 1996, of all institutions for which it is the successor), as the numerator; and

(2)  The combined aggregate assessment bases of all eligible insured depository institutions, including any successor institutions, as of December 31, 1996, as the denominator.

(c)  If an insured depository institution is a successor to an eligible insured depository institution under the de facto rule, as defined in paragraph 327.31(c) of this subpart, the successor and the eligible insured depository institution will divide the eligible insured depository institution's 1996 assessment base ratio pro rata, based on the deposit liabilities assumed in the transaction. In any subsequent transaction involving an insured depository institution that previously engaged in a transaction to which the de facto rule applied, the insured depository institution may not be deemed to have transferred more than its remaining 1996 assessment base ratio. If the transferring institution is no longer an insured depository institution after the transfer, the last successor will acquire the transferring institution's remaining 1996 assessment base ratio.

[Codified to 12 C.F.R. § 327.33]

§ 327.34 Transferability of credits.

(a)  Any remaining amount of the one-time assessment credit and the associated 1996 assessment base ratio shall transfer to a successor of an eligible insured depository institution.

(b)  Prior to the final determination of its 1996 assessment base and one-time assessment credit amount by the FDIC, an eligible insured depository institution may enter into an agreement to transfer any portion of such institution's one-time credit amount and 1996 assessment base ratio to another insured depository institution. The parties to the agreement shall notify the FDIC's Division of Finance and submit a written agreement, signed by legal representatives of both institutions. The parties must include documentation stating that each representative has the legal authority to bind the institution. The adjustment to credit amount and the associated 1996 assessment base ratio shall be made in the next assessment invoice that is sent at least 10 days after the FDIC's receipt of the written agreement.

(c)  An eligible insured depository institution may enter into an agreement after the final determination of its 1996 assessment base ratio and one-time credit amount by the FDIC to transfer any portion of such institution's one-time credit amount to another insured depository institution. The parties to the agreement shall notify the FDIC's Division of Finance and submit a written agreement, signed by legal representatives of both institutions. The parties must include documentation stating that each representative has the legal authority to bind the institution. The adjustment to the credit amount shall be made in the next assessment invoice that is sent at least 10 days after the FDIC's receipt of the written agreement.

[Codified to 12 C.F.R. § 327.34]

§ 327.35 Application of credits.

(a)  Subject to the limitations in paragraph (b) of this section, the amount of an eligible insured depository institution's one-time credit shall be applied to the maximum extent allowable by law against that institution's quarterly assessment payment under subpart A of this part, until the institution's credit is exhausted.

(b)  The following limitations shall apply to the application of the credit against assessment payments.

(1)  For assessments that become due for assessment periods beginning in calendar years 2008, 2009, and 2010, the credit may not be applied to more than 90 percent of the quarterly assessment.

(2)  For an insured depository institution that exhibits financial, operational, or compliance weaknesses ranging from moderately severe to unsatisfactory, or is not at least adequately capitalized (as defined pursuant to section 38 of the Federal Deposit Insurance Act) at the beginning of an assessment period, the amount of the credit that may be applied against the institution's quarterly assessment for that period shall not exceed the amount that the institution would have been assessed if it had been assessed at the average assessment rate for all insured institutions for that period. The FDIC shall determine the average assessment rate for an assessment period based upon its best estimate of the average rate for the period. The estimate shall be made using the best information available, but shall be made no earlier than 30 days and no later than 20 days prior to the payment due date for the period.

(3)  If the FDIC has established a restoration plan pursuant to section 7(b)(33)(E) of the Federal Deposit Insurance Act, the FDIC may elect to restrict the application of credit amounts, in any assessment period, up to the lesser of:

(i)  The amount of an insured depository institution's assessment for that period; or

(ii)  The amount equal to 3 basis points of the institution's assessment base.

[Codified to 12 C.F.R. § 327.35]

§ 327.36 Requests for review of credit amount.

(a)(1)  As soon as practicable after the publication date of this rule, the FDIC shall notify each insured depository institution by FDICconnect or mail of its 1996 assessment base ratio and credit amount in a Statement of One-Time Credit ("Statement"), if any. An insured depository institution may submit a request for review of the FDIC's determination of the institution's 1996 assessment base ratio or credit amount as shown on the Statement within 30 days after the effective date of this rule. Such review may be requested if:

(i)  The institution disagrees with a determination as to eligibility for the credit that relates to that institution's credit amount;

(ii)  The institution disagrees with the calculation of the credit as stated on the Statement; or

(iii)  The institution believes that the 1996 assessment base ratio attributed to the institution on the Statement does not fully or accurately reflect its own 1996 assessment base or appropriate adjustments for successors.

(2)  If an institution does not submit a timely request for review, that institution is barred from subsequently requesting review of its credit amount, subject to paragraph (e) of this section.

(b)(1)  An insured depository institution may submit a request for review of the FDIC's adjustment to the credit amount in a quarterly invoice within 30 days of the date on which the FDIC provides the invoice. Such review may be requested if:

(i)  The institution disagrees with the calculation of the credit as stated on the invoice; or

(ii)  The institution believes that the 1996 assessment base ratio attributed to the institution due to the adjustment to the invoice does not fully or accurately reflect appropriate adjustments for successors since the last quarterly invoice.

(2)  If an institution does not submit a timely request for review, that institution is barred from subsequently requesting review of its credit amount, subject to paragraph (e) of this section.

(c)  The request for review shall be submitted to the Division of Finance and shall provide documentation sufficient to support the change sought by the institution. At the time of filing with the FDIC, the requesting institution shall notify, to the extent practicable, any other insured depository institution that would be directly and materially affected by granting the request for review and provide such institution with copies of the request for review, the supporting documentation, and the FDIC's procedures for requests under this subpart. In addition, the FDIC also shall make reasonable efforts, based on its official systems of records, to determine that such institutions have been identified and notified.

(d)  During the FDIC's consideration of the request for review, the amount of credit in dispute shall not be available for use by any institution.

(e)  Within 30 days of being notified of the filing of the request for review, those institutions identified as potentially affected by the request for review may submit a response to such request, along with any supporting documentation, to the Division of Finance, and shall provide copies to the requesting institution. If an institution that was notified under paragraph (c) does not submit a response to the request for review, that institution may not:

(1)  Subsequently dispute the information submitted by other institutions on the transaction(s) at issue in the review process; or

(2)  Appeal the decision by the Director of the Division of Finance.

(f)  If additional information is requested of the requesting or affected institutions by the FDIC, such information shall be provided by the institution within 21 days of the date of the FDIC's request for additional information.

(g)  Any institution submitting a timely request for review will receive a written response from the FDIC's Director of the Division of Finance, (or his or her designee), notifying the requesting and affected institutions of the determination of the Director as to whether the requested change is warranted. Notice of the procedures applicable to appeals under paragraph (h) of this section will be included with the Director's written determination. Whenever feasible, the FDIC will provide the institution with the aforesaid written response the later of:

(1)  Within 60 days of receipt by the FDIC of the request for revision;

(2)  If additional institutions have been notified by the requesting institution or the FDIC, within 60 days of the date of the last response to the notification; or

(3)  If additional information has been requested by the FDIC, within 60 days of receipt of the additional information.

(h)  Subject to paragraph (e) of this section, the insured depository institution that requested review under this section, or an insured depository institution materially affected by the Director's determination, that disagrees with that determination may appeal to the FDIC's Assessment Appeals Committee on the same grounds as set forth under paragraph (a) of this section. Any such appeal must be submitted within 30 calendar days from the date of the Director's written determination. Notice of the procedures applicable to appeals under this section will be included with the Director's written determination. The decision of the Assessment Appeals Committee shall be the final determination of the FDIC.

(i)  Any adjustment to an institution's credits resulting from a determination by the Director of the FDIC's Assessment Appeals Committee shall be reflected in the institution's next assessment invoice. The adjustment to credits shall affect future assessments only and shall not result in a retroactive adjustment of assessment amounts owed for prior periods.

[Codified to 12 C.F.R. § 327.36]


Subpart C—Implementation of Dividend Requirements

§ 327.50  Purpose and scope.

(a)  Scope. This subpart C of part 327 implements the dividend provisions of section 7(e)(2) of the Federal Deposit Insurance Act, 12 U.S.C. 1817(e)(2), and applies to insured depository institutions.

(b)  Purpose. This subpart C of part 327 provides the rules for:

(1)  The FDIC's annual determination of whether to declare a dividend and the aggregate amount of any dividend;

(2)  The FDIC's determination of the amount of each insured depository institution's share of any declared dividend;

(3)  The time and manner for the FDIC's payments of dividends; and

(4)  An institution's appeal of the FDIC's determination of its dividend amount.

[Codified to 12 C.F.R. § 327.50]

§ 327.51  Definitions.

For purposes of this subpart:

(a)  Assessment base share means an insured depository institution's 1996 assessment base ratio divided by the total of all existing, eligible insured depository institution's shares of the 1996 assessment base (rounded to 14 decimal places).

(b)  Board has the same meaning as under subpart B of this part.

(c)  DIF means the Deposit Insurance Fund.

(d)(1)  An eligible premium means an assessment paid by an insured depository institution (or its predecessor) that did not exceed, for the applicable assessment period, the maximum assessment applicable in that assessment period to a Risk Category 1 institution under subpart A of this part.

(2)  An eligible premium does not include any assessments or fees paid by insured depository institutions for the Temporary Liquidity Guarantee Program. An eligible premium also does not include any emergency special assessments paid by insured depository institutions pursuant to section 13(c)(4)(G) of the Federal Deposit Insurance Act, 12 U.S.C. 1823(c)(4)(G), whether to repay any loss to the FDIC as a consequence of the Temporary Liquidity Guarantee Program or for any other reason.

(e)  An insured depository institution's eligible premium share means that institution's cumulative eligible premiums over the previous five years (ending on December 31st of the year prior to the year in which the dividend is declared) divided by the cumulative total of all eligible premiums paid by all existing insured depository institutions or their predecessors over that five-year period (rounded to 14 decimal places).

(f)  An insured depository institution's 1996 assessment base ratio means an institution's 1996 assessment base ratio, as determined pursuant to § 327.33 of this part, adjusted as necessary to reflect subsequent transactions in which the institution succeeds to another institution's assessment base ratio, or a transfer of the assessment base ratio pursuant to § 327.34. The 1996 assessment base ratio shall be rounded to seven decimal places.

(g)  Predecessor, when used in the context of insured depository institutions, refers to the institution merged with or into a resulting institution or acquired by an institution under § 327.33(c) under the de facto rule, consistent with the definition of successor in § 327.31.

[Codified to 12 C.F.R. § 327.51]

§ 327.52  Annual dividend determination.

(a)  If the DIF reserve ratio as of December 31st of 2008 or any later year equals or exceeds 1.35 percent, then on or before May 10th of the following year, the Board shall determine whether to declare a dividend based upon the reserve ratio of the DIF as of December 31st of the preceding year, and the amount of the dividend, if any.

(b)  Except as provided in paragraph (d) of this section, if the reserve ratio of the DIF equals or exceeds 1.35 percent of estimated insured deposits and does not exceed 1.50 percent, the Board shall declare the amount that is equal to one-half of the amount in excess of the amount required to maintain the reserve ratio at 1.35 percent as the aggregate dividend to be paid to insured depository institutions.

(c)  Except as provided in paragraph (d) of this section, if the reserve ratio of the DIF exceeds 1.50 percent of estimated insured deposits, the Board shall declare the amount in excess of the amount required to maintain the reserve ratio at 1.50 percent as the aggregate dividend to be paid to insured depository institutions and shall declare a dividend under paragraph (b) of this section.

(d)(1)  The Board may suspend or limit a dividend otherwise required to be paid if the Board determines that:

(i)  A significant risk of losses to the DIF exists over the next one-year period; and

(ii)  It is likely that such losses will be sufficiently high as to justify the Board concluding that the reserve ratio should be allowed:

(A)  To grow temporarily without requiring dividends when the reserve ratio is between 1.35 and 1.50 percent; or

(B)  To exceed 1.50 percent.

(2)  In making a determination under this paragraph, the Board shall consider:

(i)  National and regional conditions and their impact on insured depository institutions;

(ii)  Potential problems affecting insured depository institutions or a specific group or type of depository institution;

(iii)  The degree to which the contingent liability of the FDIC for anticipated failures of insured institutions adequately addresses concerns over funding levels in the DIF; and

(iv)  Any other factors that the Board may deem appropriate.

(3)  Within 270 days of making a determination under this paragraph, the Board shall submit a report to the Committee on Financial Services and the Committee on Banking, Housing, and Urban Affairs, providing a detailed explanation of its determination, including a discussion of the factors considered.

(e)  The Board shall annually review any determination to suspend or limit dividend payments and must either:

(1)  Make a new finding justifying the renewal of the suspension or limitation under paragraph (d) of this section, and submit a report as required under paragraph (d)(3) of this section; or

(2)  Reinstate the payment of dividends as required by paragraph (b) or (c) of this section.

[Codified to 12 C.F.R. § 327.52]

§ 327.53  Allocation and payment of dividends.

(a)(1)  The allocation of any dividend among insured depository institutions shall be based on the institution's 1996 assessment base share and the institution's eligible premium share.

(2)  As set forth in the following table, the part of a dividend allocated based upon an institution's 1996 assessment base share shall decline steadily from 100 percent to zero over fifteen years, and the part of a dividend allocated based upon an institution's eligible premium share shall increase steadily over the same fifteen-year period from zero to 100 percent. The 15-year period shall begin as if it had applied to a dividend based upon the reserve ratio at the end of 2006 and shall end with respect to any dividend based upon the reserve ratio at the end of 2021. Dividends based upon the reserve ratio as of December 31, 2021, and thereafter shall be allocated among insured depository institutions based solely on eligible premium shares.

TOTAL DIF DIVIDEND DISTRIBUTION TABLE

  Based upon the DIF reserve ratio at year-end Part of total DIF dividenddetermined by:
1996 Assessmentbase shares Eligible premiumshares
20061 1 (100.0%) 0 (0%)
20071 14/15 (93.3%) 1/15 (6.7%)
2008 13/15 (86.7%) 2/15 (13.3%)
2009 4/5 (80.0%) 1/5 (20.0%)
2010 11/15 (73.3%) 4/15 (26.7%)
2011 2/3 (66.7%) 1/3 (33.3%)
2012 3/5 (60.0%) 2/5 (40.0%)
2013 8/15 (53.3%) 7/15 (46.7%)
2014 7/15 (46.7%) 8/15 (53.3%)
2015 2/5 (40.0%) 3/5 (60.0%)
2016 1/3 (33.3%) 2/3 (66.7%)
2017 4/15 (26.7%) 11/15 (73.3%)
2018 1/5 (20.0%) 4/5 (80.0%)
2019 2/15 (13.3%) 13/15 (86.7%)
2020 1/15 (6.7%) 14/15 (93.3%)
2021 0 (0%) 1 (100.0%)
Thereafter  0 (0%) 1 (100%)
1The 15-year period shall be computed as if it had applied to dividends based upon the reserve ratios at the end of 2006 and 2007.

(b)  The FDIC shall notify each insured depository institution of the amount of such institution's dividend payment based on its share as determined pursuant to paragraph (a) of this section. Notice shall be given as soon as practicable after the Board's declaration of a dividend through a special notice of dividend.

(c)  The FDIC shall pay individual dividend amounts, unless they are the subject of a request for review under § 327.54, to insured depository institutions on June 30 of the year the dividend is declared. The FDIC shall notify institutions whether dividends will offset the next collection of assessments at the time of the invoice. An institution's dividend amount will be settled with that institution's assessment. Any excess dividend amount will be a net credit to the institution and will be deposited into the deposit account designated by the institution for assessment payment purposes pursuant to subpart A of this part. If the dividend amount is less than the amount of assessment due, then the institution's account will be directly debited by the FDIC to reflect the net amount owed to the FDIC as an assessment.

(d)  If an insured depository institution's dividend amount is subject to review under § 327.54, and that request is not finally resolved prior to the dividend payment date, the FDIC shall withhold the payment of the disputed portion of the dividend amount involved in the request for review. Adjustments to an individual institution's dividend amount based on the final determination of a request for review will be handled in the same manner as assessment underpayments and overpayments.

(e)  An institution may sell, assign, or otherwise transfer its right to a current or future dividend. However, the FDIC will pay dividend amounts to insured institutions without regard to any such sale, assignment or transfer, regardless of whether the FDIC has received notice of the sale, assignment or transfer.

[Codified to 12 C.F.R. § 327.53]

§ 327.54  Requests for review.

(a)  An insured depository institution may submit a request for review of the FDIC's determination of the institution's 1996 assessment base share and/or its eligible premium share as shown on the institution's quarterly assessment invoice. Such requests shall be subject to the provisions of § 327.3(f)(3) of this part, except for the invoice provided by the FDIC in March of any calendar year in which the FDIC declares a dividend. If the FDIC declares a dividend, any request for review of an institution's 1996 assessment base share and/or its eligible premium share as shown on the institution's March quarterly assessment invoice must be filed within 30 days of the date that the FDIC notifies the institution of its dividend amount. If an institution does not submit a timely request for review for the first invoice in which the dividend-related information that forms the basis for the request appears, the institution shall be barred from subsequently requesting review of that information.

(b)  An insured depository institution may submit a request for review of the FDIC's determination of the institution's dividend amount as shown on the special notice of dividend. Such review may be requested if:

(1)  The institution disagrees with the calculation of the dividend as stated on the special notice of dividend; or

(2)  The institution believes that the 1996 assessment base ratio attributed to the institution is inaccurate or has not been adjusted to include the 1996 assessment base ratio of an institution acquired by merger or transfer pursuant to §§ 327.33 and 327.34 of this part and § 327.51(g), and the institution has not had a prior opportunity to request review or appeal under subpart B of this part or paragraph (a) of this section; or

(3)  The institution believes that the special notice does not fully or accurately reflect its eligible premiums or those of any of its predecessors and the institution has not had a prior opportunity to request review or appeal under subpart B of this part or paragraph (a) of this section.

(c)  Any such request for review under paragraph (b) of this section must be submitted within 30 days of the date of the special notice of dividend for which a change is requested. The request for review shall be submitted to the Division of Finance and shall provide documentation sufficient to support the change sought by the institution. If an institution does not submit a timely request for review, that institution may not subsequently request review of its dividend amount, subject to paragraph (d) of this section. At the time of filing with the FDIC, the requesting institution shall notify, to the extent practicable, any other insured depository institution that would be directly and materially affected by granting the request for review and provide such institution with copies of the request for review, the supporting documentation, and the FDIC's procedures for requests under this subpart. The FDIC shall make reasonable efforts, based on its official systems of records, to determine that such institutions have been identified and notified.

(d)  During the FDIC's consideration of a request for review, the amount of dividend in dispute will not be paid.

(e)  Within 30 days of receiving notice of the request for review under paragraph (b) of this section, those institutions identified as potentially affected by the request for review may submit a response to such request, along with any supporting documentation, to the Division of Finance, and shall provide copies to the requesting institution. If an institution that was notified under paragraph (c) of this section does not submit a response to the request for review, that institution may not subsequently:

(1)  Dispute the information submitted by any other institution on the transaction(s) at issue in that review process; or

(2)  Appeal the decision by the Director of the Division of Finance.

(f)  If additional information is requested of the requesting or affected institutions by the FDIC, such information shall be provided by the institution within 21 days of the date of the FDIC's request for additional information.

(g)  Any institution submitting a timely request for review under paragraph (b) of this section will receive a written response from the FDIC's Director of the Division of Finance ("Director"), or his or her designee, notifying the affected institutions of the determination of the Director as to whether the requested change is warranted, whenever feasible:

(1)  Within 60 days of receipt by the FDIC of the request for review;

(2)  If additional institutions have been notified by the requesting institution or the FDIC, within 60 days of the date of the last response to the notification; or

(3)  If additional information has been requested by the FDIC, within 60 days of receipt of the additional information, whichever is later. Notice of the procedures applicable to appeals under paragraph (g) of this section will be included with the Director's written determination.

(h)  An insured depository institution may appeal the determination of the Director to the FDIC's Assessment Appeals Committee on the same grounds as set forth under paragraph (b) of this section. Any such appeal must be submitted within 30 calendar days from the date of the Director's written determination. The decision of the Assessment Appeals Committee shall be the final determination of the FDIC.

[Codified to 12 C.F.R. § 327.54]


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