#2022-15, June 3, 2022

FDIC Considering Deposit Insurance Assessment Increase

In remarks last month, Federal Deposit Insurance Corporation (FDIC) Acting Chairman Martin Gruenberg indicated that the agency will consider “options to amend [the Deposit Insurance Fund] restoration plan, including increases to assessment rates” in June.  The remarks came after the DIF balance fell for the first time in more than 10 years from $102 million in the first quarter to $123 billion.

The FDIC stated that the decrease is attributed to unrealized losses on available-for-sale securities in the DIF portfolio, driven by rising interest rates, which offset insurance assessment income.  Meanwhile, industry-insured deposits continued to grow at a rapid pace, leading to a drop in the DIF reserve ratio to 1.23% as of March 31.

As we have reported previously, when the DIF reserve ratio dipped below the statutory minimum reserve ratio of 1.35% in June 2020, the FDIC announced a plan to restore the fund by September 2028 with no anticipated increase in the assessment rate schedule.  However, “a key assumption surrounding the restoration plan was that insured deposit growth would normalize and the surge of insured deposits associated with the pandemic would recede over time.”

To read more, click here.

CFPB Makes Changes to Office of Innovation; States Focus will be on ‘Promoting Competition’

The Consumer Financial Protection Bureau (CFPB) recently announced that it will open a new Office of Competition and Innovation focused on “promoting competition.”  The office replaces the Bureau’s existing Office of Innovation, which focused on allowing companies to apply for no-action letters and regulatory sandboxes to evaluate specific innovative product offerings.

In the announcement, the Bureau stated that the purpose of the new office will be to “focus on how to create market conditions where consumers have choices, the best products win, and large incumbents cannot stifle competition by exploiting their network effects or market power.”  Specifically, the office will seek to make it easier for consumers to switch accounts and service providers; research “structural problems” that create obstacles to innovation; understand dynamics between large and small players with regard to competition; and host events that explore barriers to entry and other obstacles.

To read more, click here.

FDIC Hosting Virtual Sessions for New Bank Directors

The FDIC is offering the Guidance for New Directors sessions virtually again this year in conjunction with Directors College Program.  These are small-group sessions for new (or newer) directors that focus on fundamentals of board oversight and the examination process.  The sessions will focus on fundamental board governance issues and are designed for Directors with less than five years’ experience.  In addition to discussing participant questions, the session will cover Directors’ roles and responsibilities, the examination process, and effective strategies to monitor bank performance.

The first session is on June 16 with the second scheduled for October 27.  Both sessions begin at 11:00 AM and will run for 90 minutes.  Links to join the FDIC sessions are below.

June 16, 2022:  11:00 am-12:30 pm
Microsoft Teams meeting
Join on your computer or mobile app
Click here to join the meeting

October 27, 2022:  11:00 am-12:30 pm
Microsoft Teams meeting
Join on your computer or mobile app
Click here to join the meeting