Merging the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) into a new fund, the Deposit Insurance Fund (DIF). This change was made effective March 31, 2006.
Increasing the coverage limit for retirement accounts to $250,000 and indexing the coverage limit for retirement accounts to inflation as with the general deposit insurance coverage limit. This change was made effective April 1, 2006.
Establishing a range of 1.15 percent to 1.50 percent within which the FDIC Board of Directors may set the Designated Reserve Ratio (DRR).
Allowing the FDIC to manage the pace at which the reserve ratio varies within
If the reserve ratio falls below 1.15 percent–or is expected to within 6 months–the FDIC must adopt a restoration plan that provides that the DIF will return to 1.15 percent generally within 5 years.
If the reserve ratio exceeds 1.35 percent, the FDIC must generally dividend
to DIF members half of the amount above the amount necessary to maintain the
DIF at 1.35 percent, unless the FDIC Board, considering statutory factors,
suspends the dividends.
If the reserve ratio exceeds 1.5 percent, the FDIC must generally dividend
to DIF members all amounts above the amount necessary to maintain the DIF at
Eliminating the restrictions on premium rates based on the DRR and granting the FDIC Board the discretion to price deposit insurance according to risk for all insured institutions regardless of the level of the reserve ratio.
Granting a one-time initial assessment credit (of approximately $4.7 billion) to recognize institutions' past contributions to the fund.
The 2005 act requires the Comptroller General to conduct studies of (1) federal
bank regulators' administration of the prompt corrective action program and
recent changes to the FDIC deposit insurance system, and (2) the organizational
structure of the FDIC.
Recommendations for Deposit Insurance Reform, April 2001
On April 5, the FDIC issued recommendations for strengthening the deposit insurance system, including merging the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF), and adopting a more risk-based system for charging insurance premiums.