The Federal Deposit Insurance Corporation (FDIC) Board of Directors approved a final rule implementing a special assessment to recover the loss to the Deposit Insurance Fund (DIF) associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank. The Federal Deposit Insurance Act (FDI Act) required the FDIC to take this action in connection with the March 12, 2023 Systemic Risk Determination.
As of September 30, 2024, the total loss estimate for Silicon Valley Bank and Signature Bank was $24.1 billion, of which an estimated $18.9 billion is attributable to the protection of uninsured depositors pursuant to the systemic risk determination and will be recovered through the special assessment. As with all receiverships, the loss estimate will be periodically adjusted as the FDIC, as receiver of the failed banks, sells assets, satisfies liabilities, and incurs receivership expenses.
Key Features
Special Assessment Rate and Base
- While the special assessment will be collected at a quarterly rate of 3.36 basis points for the initial eight-quarter collection period, given the update to the loss estimates and the increase in the aggregate special assessment base resulting from amendments to the reported amount of estimated uninsured deposits, the FDIC currently projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.
- The quarterly special assessment rate will be applied to the special assessment base equal to an insured depository institution’s (IDI’s) estimated uninsured deposits reported for the December 31, 2022 reporting period, adjusted to exclude the first $5 billion, applicable either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the extent that an IDI is part of a holding company with one or more subsidiary IDIs.
Insured Institutions Affected
- As of September 30, 2024, it is estimated that 146 IDIs belonging to 115 banking organizations are subject to the special assessment. A banking organization is defined to include IDIs that are not subsidiaries of a holding company and holding companies with one or more IDIs.
- The special assessment does not apply to any banking organization with less than $5 billion in total consolidated assets.
Example of the Special Assessment Charge
- The projected special assessment amount due each quarter of the initial eight-quarter collection period will be 0.000336 (3.36 basis points divided by 10,000 to move the decimal point) multiplied by the special assessment base of estimated uninsured deposits reported on Schedule RC-O, Memorandum item 2 of the Consolidated Reports of Condition and Income (Call Report) or Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002), for the December 31, 2022 reporting period, adjusted to exclude the first $5 billion of uninsured deposits at the banking organization level.
- Sample quarterly special assessment amount for a banking organization with only one IDI:
- Estimated Uninsured Deposits reported on Schedule RC-O Memo item 2 is $7.5 billion for Call Report date 12/31/2022*
- The special assessment base after applying the $5 billion deduction is $2.5 billion
- The quarterly special assessment amount due would be $2,500,000,000 multiplied by 0.000336 = $840,000.
*Unlike the regular quarterly deposit insurance invoice that is based on the most recent Call Report data corresponding with the quarter in which the institution in being assessed, the base for the Special Assessment will be calculated, for each quarter, using the amount of estimated uninsured deposits reported in Schedule RC-O, Memorandum item 2 for the December 31, 2022 reporting period. The FDIC conducted an Assessment Reporting Review (review) of the accuracy of estimated uninsured deposits reporting and related items on the Call Report. This review resulted in amendments where issues with reporting accuracy were found. For additional information on reporting expectations for estimated uninsured deposits and related items, see: Estimated Uninsured Deposits Reporting Expectations.
Payment of the Special Assessment
- The special assessment will be reflected as an additional charge on the regular quarterly invoice for IDIs subject to the special assessment. Click here for invoice payment dates.
- The first of the initial eight-quarterly collection periods was the first quarterly assessment period of 2024 (i.e., January 1 through March 31, 2024) with a payment date of June 28, 2024. The last of the initial eight-quarterly collection periods is the fourth quarterly assessment period of 2025 (i.e., October 1 through December 31, 2025), with a payment date of March 30, 2026.
- While the special assessment will be collected at a quarterly rate of 3.36 basis points for the initial eight-quarter collection period, given the update to the loss estimates and the increase in the aggregate special assessment base resulting from amendments to the reported amount of estimated uninsured deposits, the FDIC currently projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.
- If an institution merges with an institution subject to the special assessment, the surviving institution will be billed for the special assessment charge of the acquired institution until the collection of the special assessment ends. If an institution subject to the special assessment merges with another institution subject to the special assessment, the surviving institution will be billed for both special assessment charges until the collection of the special assessment ends. For more information on mergers see Merger, Acquisitions, & Branch Sales.
Potential Future Changes to the Special Assessment
- By statute, the FDIC is required to recover the $18.9 billion estimated loss arising from the use of a systemic risk determination through one or more special assessments.
- As with all receiverships, the loss estimate will be periodically adjusted as the FDIC, as receiver of the failed banks, sells assets, satisfies liabilities, and incurs receivership expenses.
- Because the estimated loss will be periodically adjusted and special assessments collected might change due to amendments to the uninsured deposits reported for December 31, 2022, the FDIC retains the ability to:
- End the collection early;
- Extend the special assessment collection period one or more quarters beyond the initial eight-quarter collection period to collect the difference between actual or estimated losses and the amounts collected; and
- Impose a one-time final shortfall special assessment to collect the difference between actual losses and the amounts collected after the receiverships for Silicon Valley Bank and Signature Bank terminate.
- As outlined in the final rule, the FDIC will provide any updates on the amount and collection period for the special assessment to banking organizations subject to the special assessment. Updates will be through FDICconnect as FDIC Official Correspondence and the deposit insurance invoice.
For More Information and Assistance
For more information on the final Special Assessment regulation, see Financial Institution Letter FIL-58-2023 and its attachments.
For assistance, please call 1-800-759-6596, Option 2, or email Assessments@fdic.gov.