Assessments; Retention of Existing Assessment Rate Schedule for SAIF Member Institutions

SUMMARY: Based upon the results of its semiannual review of the

recapitalization of the Savings Association Insurance Fund (SAIF) and

of the SAIF assessment rates, the Board of Directors of the FDIC

(Board) proposes to retain the existing assessment rate schedule

applicable to SAIF-member institutions. The effect of this proposal

would be that the SAIF assessment rate to be paid by SAIF members would

continue to range from 23 cents per $100 of domestic deposits to 31

cents per $100 of domestic deposits, depending on risk classification.

Through this proposed rulemaking, the FDIC is soliciting comments on

all aspects of its proposal to retain the existing assessment rate

schedule applicable to SAIF-member institutions.

DATES: Written comments must be received by the FDIC on or before April

17, 1995.

ADDRESSES: Written comments shall be addressed to the Office of the

Executive Secretary, Federal Deposit Insurance Corporation, 550 17th

Street, N.W., Washington, D.C. 20429. Comments may be hand-delivered to

Room F-400, 1776 F Street, N.W., Washington, D.C., on business days

between 8:30 a.m. and 5:00 p.m. (FAX number: 202/898-3838). Comments

will be available for inspection in Room 7118, 550 17th Street, N.W.,

Washington, D.C. between 9:00 a.m. and 4:30 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: James R. McFadyen, Senior Financial

Analyst, Division of Research and Statistics (202/898-7027), Federal

Deposit Insurance Corporation, Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION:

I. Background: SAIF Assessment Rates

Section 7(b) of the Federal Deposit Insurance Act (FDI Act) (12

U.S.C. 1817(b)) requires that, if the SAIF reserve ratio is below the

designated reserve ratio of 1.25 percent, the FDIC shall set

assessments to increase the reserve ratio to the designated reserve

ratio.\1\ Section 7(b) of the FDI Act also requires a minimum SAIF

assessment that is at least as much as would be raised by an average

assessment rate of 18 basis points. The minimum assessment requirement

is in effect as long as the SAIF is not fully capitalized or has

outstanding borrowings under section 14 of the FDI Act. If either of

these two conditions exists as of January 1, 1998, the minimum

assessment requirement increases to a rate of 23 basis points.

[[Page 9266]]

\1\Currently, there is no recapitalization schedule for the SAIF

mandated by statute. However, as of January 1, 1998, the Board is

required to promulgate a recapitalization schedule that achieves the

designated reserve ratio within 15 years, except that the Board may

extend the recapitalization date to one which ``will, over time,

maximize the amount of semiannual assessments received by the SAIF,

net of insurance losses incurred by the Fund''.

---------------------------------------------------------------------------

In order to achieve SAIF recapitalization, the FDIC Board of

Directors (Board) adopted a risk-related assessment matrix in September

1992 (see Table 1) which has remained unchanged. Previously, in

deciding against changes in the SAIF assessment rate, the Board has

considered the SAIF's expected operating expenses, case resolution

expenditures and income under a range of scenarios. The Board also has

considered the effect of an increase in the assessment rate on SAIF

members' earnings and capital. When first adopted, the assessment rate

schedule yielded a weighted average rate of 25.9 basis points. With

subsequent improvements in the industry and the migration of

institutions to lower rates within the assessment matrix, the average

rate has declined to 24 basis points (based on risk-based assessment

categories as of January 1, 1995 and the assessment base as of

September 30, 1994--see Table 2).

Table 1.--SAIF-Member Assessment Rate Schedule For the First Semiannual

Assessment Period of 1995

[Basis points]

------------------------------------------------------------------------

Supervisory

subgroup

Capital group --------------------

A B C

------------------------------------------------------------------------

Well capitalized................................... 23 26 29

Adequately capitalized............................. 26 29 30

Undercapitalized................................... 29 30 31

------------------------------------------------------------------------

Table 2.--SAIF-Member Assessment Rate Distribution As of September 30, 1994*

[Billions of dollars]

----------------------------------------------------------------------------------------------------------------

Supervisory subgroup

-----------------------------------------------------

Capital group A B C

-----------------------------------------------------

Amount Percent Amount Percent Amount Percent

----------------------------------------------------------------------------------------------------------------

Well capitalized........... Number................... 1,585 85.6 139 7.5 35 1.9

Assets................... $526.5 70.7 $109.9 14.8 $20.4 2.7

Base..................... 386.6 72.3 74.5 13.9 15.3 2.9

Adequately capitalized..... Number................... 28 1.5 34 1.8 21 1.1

Assets................... $25.5 3.4 $22.0 3.0 $32.9 4.4

Base..................... 15.7 2.9 15.9 3.0 21.5 4.0

Under capitalized.......... Number................... 0 0.0 0 0.0 10 0.5

Assets................... $0.0 0.0 $0.0 0.0 $7.4 1.0

Base..................... 0.0 0.0 0.0 0.0 5.7 1.1

----------------------------------------------------------------------------------------------------------------

*``Base'' is the amount of deposits subject to SAIF assessments.

The primary source of funds for the SAIF is assessment revenue from

SAIF-member institutions. Since the creation of the fund and through

the end of 1992, however, all assessments from SAIF-member institutions

were diverted to other needs as required by the Financial Institutions

Reform, Recovery, and Enforcement Act of 1989 (FIRREA).2 Only

assessment revenue generated from Bank Insurance Fund (BIF) member

institutions that acquired SAIF-insured deposits under section 5(d)(3)

of the FDI Act (12 U.S.C. 1815(d)(3)) (so-called ``Oakar'' banks) was

deposited in the SAIF throughout this period. [[Page 9267]]

\2\From 1989 through 1992, more than 90 percent of SAIF

assessment revenue went to the FSLIC Resolution Fund (FRF), the

Resolution Funding Corporation (REFCORP) and the Financing

Corporation (FICO).

---------------------------------------------------------------------------

SAIF-member assessment revenue began flowing into the SAIF on

January 1, 1993. However, the Financing Corporation (FICO) has a

priority claim on SAIF-member assessments in order to service FICO bond

obligations. Under existing statutory provisions, FICO has assessment

authority through 2019, the maturity year of its last bond issuance. At

approximately $779 million per year, the FICO draw is substantial,

representing nearly 45 percent of estimated assessment revenue for

1995, or 11 basis points of the average assessment rate of 24 basis

points. The SAIF had a balance of $1.8 billion (unaudited) on December

31, 1994. With primary resolution responsibility residing with the

Resolution Trust Corporation (RTC), there have been few demands on the

SAIF, but the authority of the RTC to place failed thrifts in

conservatorship or establish receiverships expires June 30, 1995.

In addition to assessment revenues and investment income, there are

at least two other potential sources of funds for the SAIF. First, the

FDIC has a $30 billion line of credit available with the Department of

the Treasury (Treasury) for deposit insurance purposes, although the

SAIF has required no extension of credit. Second, the Resolution Trust

Corporation Completion Act (RTCCA) authorized the appropriation of up

to $8 billion in Treasury funds to pay for losses incurred by the SAIF

during fiscal years 1994 through 1998, to the extent of the

availability of appropriated funds and provided that certain

certifications are made to the Congress by the Chairman of the FDIC.

Among these, the Chairman must certify that the FDIC Board has

determined that:

(1) SAIF members are unable to pay additional semiannual

assessments at the rates required to cover losses and to meet the

repayment schedule for any amount borrowed from the Treasury for

insurance purposes under the FDIC's line of credit without adversely

affecting the SAIF members' ability to raise capital or to maintain

the assessment base; and

(2) An increase in assessment rates for SAIF members to cover

losses or meet any repayment schedule could reasonably be expected

to result in greater losses to the Government.

The RTC's resolution activities and the thrift industry's

substantial reduction of troubled assets in recent years have resulted

in a relatively sound industry as the July 1, 1995 date for SAIF

resolution responsibility approaches. However, with a balance of $1.8

billion beginning 1995, the SAIF does not have a large cushion with

which to absorb the costs of thrift failures. The FDIC has

significantly reduced its projections of failed-thrift assets for 1995

and 1996, but the failure of a single large institution or an economic

downturn leading to higher than anticipated losses could render the

fund insolvent.

Furthermore, there may soon be a substantial differential between

BIF and SAIF premiums. The BIF is expected to be recapitalized during

1995, at which time BIF premiums can be reduced far below current

levels. Largely due to the FICO obligation, the SAIF is not likely to

be recapitalized until 2002 (this projection is discussed below in

section III). A premium differential may have adverse consequences for

SAIF members, including reduced earnings and an impaired ability to

raise funds in the capital markets. Among the weakest thrifts, this

differential could result in competitive pressures that would lead to

additional failures. An analysis over a five year time span suggests

that any such increase in failures is likely to be sufficiently small

as to be manageable by the SAIF under current interest-rate and asset

quality conditions. Moreover, the analysis indicates that under harsher

interest-rate and asset-quality assumptions, these economic factors

would have a significantly greater effect on SAIF-member failure rates

than would a premium differential.

While the premium differential is not expected to lead to

significant failures in the near term, it may lead to other adverse

results. A premium differential would also create a powerful incentive

for SAIF-insured institutions to minimize premium costs by shrinking

the base against which assessments are levied (currently domestic

deposits). This can be accomplished, despite the moratorium on

conversions of SAIF-insured deposits to BIF-insured deposits at these

institutions, by substituting nondeposit liabilities for SAIF-insured

deposits. These nondeposit liabilities are readily available and

include Federal Home Loan Bank (FHLB) advances and reverse repurchase

agreements. The net result could be an acceleration of the shrinkage of

the assessment base, thereby reducing assessment revenue. This could

threaten the ability to service the FICO obligation sometime near or

after the year 2000 and, over the longer term, frustrate the

capitalization of the SAIF. As shown in the following table, the

assessment base has been declining steadily since the fund was

established in 1989, although the decline was at a slower rate in 1994.

Table 3.--SAIF Assessment Base and Insured Deposits*

[Dollar amounts in billions]

----------------------------------------------------------------------------------------------------------------

Est. Insured

Assessment base Percent change deposits Percent change

----------------------------------------------------------------------------------------------------------------

1989............................ $950.3 $882.9 6.0

1990............................ 877.7 -7.6 830.0 -6.0

1991............................ 820.2 -6.5 776.4 -6.5

1992............................ 760.5 -7.3 729.5 -6.0

1993............................ 729.4 -4.1 695.6 -4.6

1994............................ 716.3 -1.8 687.3 -1.2

----------------------------------------------------------------------------------------------------------------

*Includes conservatorships and Sasser institutions; adjusted for Oakar deposits. End-of-period domestic deposits

are used to approximate the SAIF assessment base. The actual assessment base may be slightly less than

domestic deposits due to float adjustments, but period-to-period changes should be similar. Table 3 presents

end-of-period figures (the comparable table in earlier proposals used averages) to reflect the quarterly

billing system which becomes effective the second quarter of 1995.

[[Page 9268]] The FDIC's Legal Division has opined that SAIF

assessments paid by BIF-member Oakar banks should remain in the SAIF

and are not subject to FICO draws.3 Further, the Legal Division

has opined that SAIF assessments paid by any former savings association

that (i) has converted from a savings association charter to a bank

charter, and (ii) remains a SAIF member in accordance with section

5(d)(2)(G) of the FDI Act (12 U.S.C. 1815(d)(2)(G)) (a so-called

``Sasser'' bank), are likewise not subject to draws by FICO.4 On

September 30, 1994, BIF-member Oakar banks held 23.3 percent of the

SAIF assessment base (see Table 4), and SAIF-member Sasser banks held

an additional 6.9 percent. While the pace of Oakar acquisitions is

likely to slow substantially as RTC resolution activity winds down in

1995, Oakar deposits may continue to grow at the same rate as BIF-

member deposits and become a greater proportion of the SAIF assessment

base.5 This has the potential result of SAIF's having insufficient

assessments to cover the FICO obligation. The rate of Sasser

conversions is difficult to predict and is partially dependent on state

laws, but any future conversions would also decrease the proportion of

SAIF assessment revenues available to FICO. These factors are

considered in the projections of SAIF's recapitalization in section

III.

\3\See Notice of FDIC General Counsel's Opinion No. 7, 60 FR

7055 (Feb. 6, 1995).

\4\Id.

\5\Under section 5(d)(3) of the FDI Act, as amended by FDICIA,

SAIF-insured deposits acquired by a BIF member are adjusted annually

by the acquiring institution's overall deposit growth rate

(excluding the effects of other mergers or acquisitions).

Table 4.--SAIF-Insured Deposits Held by BIF-Member Oakar Banks as a

Percent of SAIF Member Domestic Deposits*

------------------------------------------------------------------------

Year Percent

------------------------------------------------------------------------

1991.................................................... 7.5

1992.................................................... 9.7

1993.................................................... 18.4

9/94.................................................... 23.3

------------------------------------------------------------------------

*End-of-period figures; domestic deposits are adjusted for Oakar

deposits.

II. Condition and Performance of SAIF-Member Institutions

SAIF-member institutions numbered 1,869 on September 30, 1994,

including 1,794 thrift institutions and 75 commercial banks.6

While the total number of institutions is down from year-end 1993,

there is evidence of a growing industry. For the first three quarters

of 1994, these institutions increased their total assets by $6.8

billion (0.9 percent) based on loan growth of $6.3 billion. Total

capital grew at an even faster pace for the nine months, raising the

equity-to-assets ratio to 7.90 percent from 7.74 percent. The industry

continued to pare troubled assets during 1994. Noncurrent loans and

other real estate owned declined from 1.91 percent of total assets at

the beginning of 1994 to 1.43 percent by September 30.

\6\Excluding RTC conservatorships and one self-liquidating

institution.

---------------------------------------------------------------------------

The industry earned a return on assets of 0.62 percent for the

first three quarters of 1994. While this is less than the ROA of 0.72

percent earned in 1993, the earlier year included large one-time

accounting gains. Also, some institutions incurred large restructuring

charges in 1994 in order to dispose of troubled assets, which has

positioned them for higher profits in subsequent periods. Earnings in

1994 were hampered by smaller net interest margins, which fell from

3.35 for all of 1993 to 3.24 for the first nine months of 1994. In the

rising interest-rate environment, institutions' funding costs rose

faster than asset yields, although institutions with higher proportions

of adjustable-rate mortgages should be able to reprice a portion of

these loans within six months.

This discussion has focused on the improving condition of the SAIF-

member thrift industry, but any such discussion must mention the

relatively weak economic conditions still confronting a large segment

of the industry. Twenty-three percent of all SAIF member's total assets

are concentrated in the nation's seven largest thrift institutions, all

of which are headquartered in California. This state, in general, has

lagged behind most of the nation in recovering from the most recent

recession, and many California thrifts have significant exposure in the

weakest areas of southern California. Additionally, a few large

institutions have raised supervisory concerns due to low earnings and

relatively high levels of risk in their loan portfolios. Consequently,

despite the improving health of the thrift industry, the SAIF still

faces significant risk relative to the fund's current reserve level.

The current assessment rate schedule for SAIF-member institutions

has a spread of 8 basis points from the lowest rate to the highest

rate, dependent on supervisory factors and capitalization. A proposed

assessment rate schedule for BIF-member institutions would increase the

spread for BIF members from the current 8 basis points to 27 basis

points. This would be accomplished by maintaining the current maximum

rate of 31 basis points and dropping the minimum, most favorable rate

to 4 basis points. Thus, the weakest BIF members would incur no

additional deposit insurance cost. In order to apply a similar 27-basis

point spread to SAIF members, it would be necessary to raise the

highest SAIF assessment rate to 45 to 50 basis points (based on a

lowest rate of 18 to 23 basis points). Because 85 percent of SAIF

members would continue to pay the lowest rate, the revenue benefit of a

27-basis point spread would be limited. However, a spread of that

magnitude could have significant adverse consequences for the SAIF by

greatly increasing expenses of its weakest members and, in all

likelihood, causing additional failures.

III. New Projections for the SAIF

In November 1994, the FDIC's interdivisional Bank and Thrift

Failure Working Group (Working Group) estimated failed SAIF-insured

institution assets at $3 billion for 1995 and $2 billion for 1996. The

1995 estimate of $3 billion is based on the FDIC Division of

Supervision's projected failure of specific institutions that likely

would occur in the second half of the year, when SAIF assumes

resolution responsibility from the RTC. The 1995 and 1996 estimates

were used in updating the Division of Research and Statistics'

projections of failed thrift assets, the fund balance and reserve

ratios.

The updated projection indicates the SAIF reserve ratio will reach

1.25 percent in 2002, which is unchanged from the previous projection.

Also, this projection indicates the fund will not encounter problems

meeting the FICO obligation through 2012, the last year of the

projection. The results are shown in Table 5.

The following assumptions were used:

Failed-institution assets are based on the Working Group's

estimates for 1995 ($3 billion) and 1996 ($2 billion). Beyond 1996, the

assumed failed-asset rate for SAIF will be 22 basis points, or about $2

billion per year. This is lower than the historical loss rate for the

BIF because of the thrift industry's current low level of problem

assets.

The nominal loss rate on failed thrift assets will be 13

percent.

The asset growth rate for SAIF members will be zero, based

on the industry's recent experience.

The SAIF assessment base will continue to shrink, at 2

percent per year. Under current conditions, the assessment base for

better capitalized thrifts is expected to be stable. Deposit shrinkage

was more prevalent at weaker thrifts during periods when some better-

managed thrifts experienced deposit growth.7 However, the

emergence of a BIF/SAIF premium differential may encourage less

reliance on SAIF-assessable liabilities. The higher overall shrinkage

rates of recent years are not expected to continue because a

significant portion of the shrinkage was due to depositor flight from

the declining or low deposit interest rates which prevailed from 1990

to the latter part of 1994. Another portion of the shrinkage can be

attributed to deposit runoff at conservatorships and weakened thrifts.

[[Page 9269]]

\7\Deposit Flows at SAIF- and BIF-Insured Institutions: December

1988 to September 1992, Policy Research Division, Office of Thrift

Supervision, January 1993.

---------------------------------------------------------------------------

The Oakar deposit purchase rate will be zero, but Oakar

deposits will grow at 2 percent per year, the estimated growth rate for

BIF-member deposits. Under FDICIA, Oakar deposits are adjusted annually

by the acquiring institution's overall deposit growth rate. A

significant portion of Oakar deposits were acquired from the RTC, and

these opportunities have all but disappeared. The Riegle-Neal

Interstate Banking and Branching Efficiency Act of 1994 authorizes a

bank holding company to acquire out-of-state banks beginning September

29, 1995, and authorizes a bank to establish de novo out-of-state

branches beginning June 1, 1997 if the host state expressly permits

interstate branching through the establishment of de novo branches.

Thus, banks may no longer be confined to the acquisition of failed or

failing charters to enter states previously closed to them.

The average assessment rate will be 24 basis points until

the SAIF is recapitalized, after which assessment rates are reduced to

the level necessary to maintain the reserve ratio at 1.25 percent.

Table 5.--SAIF Fund Balance and Reserve Ratio Projections

------------------------------------------------------------------------

Fund balance ($ billions) Reserve ratio*

-------------------------------------------------------

Year-end 9/94 1/95 current

9/94 1/95 current Projection projection

Projection projection** (percent) (percent)

------------------------------------------------------------------------

1994........ $2.2 $1.8 0.31 0.26

1995........ 2.9 2.4 0.43 0.35

1996........ 3.7 3.3 0.55 0.49

1997........ 4.4 4.1 0.67 0.61

1998........ 5.1 4.8 0.79 0.74

1999........ 5.7 5.6 0.92 0.86

2000........ 6.4 6.5 1.05 1.00

2001........ 7.1 7.3 1.19 1.14

2002........ 7.3 8.0 1.25 1.25

2003........ 6.8 7.9 1.25 1.25

2004........ 7.0 7.8 1.25 1.25

2005........ 6.8 7.8 1.25 1.25

2006........ 6.7 7.7 1.25 1.25

2007........ 6.5 7.7 1.25 1.25

2008........ 6.4 7.6 1.25 1.25

2009........ 6.3 7.6 1.25 1.25

2010........ 6.2 7.6 1.25 1.25

2011........ 6.0 7.5 1.25 1.25

2012........ 5.9 7.5 1.25 1.25

------------------------------------------------------------------------

*After reaching 1.25 percent of insured deposits, the fund balance is

maintained at 1.25 percent of insured deposits.

**The estimated year-end 1994 fund balance is less than was shown for

September because of loss reserves set aside in the fourth quarter.

The 1/95 projected fund balance incorporates an Oakar deposit growth

factor, whereas the 9/94 projection did not.

As stated earlier, the Board has the authority to reduce SAIF

assessment rates to an average of 18 basis points until January 1,

1998, at which time the average rate would rise to 23 basis points

until recapitalization occurs. Projections made under this scenario

(and using the same other assumptions as above) indicate that the SAIF

would recapitalize in 2004, or two years later than under the existing

rate schedule.

IV. FDIC Proposal Regarding SAIF-Member Assessment Rates

Given the fund's relatively low balance and the imminent transfer

of resolution authority from the RTC to the SAIF on July 1, the SAIF

must be built as quickly as possible to its mandated reserve level. It

is recognized that a differential between BIF and SAIF premiums could

adversely affect some SAIF members, but the thrift industry has

demonstrated its ability to generate additional capital and reduce

troubled assets while paying deposit insurance premiums at the current

levels. Also, a shrinking assessment base is producing declining

revenue, which would be cut even further by lower assessment rates. The

FDIC staff has recommended that assessment rates within the risk-

related assessment rate matrix remain at their current levels for the

second semiannual assessment period of 1995. The Board believes that

the minimum rate should not be reduced from the current 23 basis

points, and that an increase in the current spread of 8 basis points

from the lowest to the highest assessment rates would adversely impact

weakened institutions already in danger of failure.

V. Summary

Under the existing SAIF assessment rate schedule, which yields an

average assessment rate of 24 basis points, the fund is projected to

recapitalize in the year 2002, which is unchanged from prior

projections. The Board has the authority to reduce SAIF assessment

rates to 18 basis points until January 1, 1998, after which the average

rate must remain at 23 basis points or higher until recapitalization is

achieved. Reducing the average rate to 18 basis points is presently

projected to delay SAIF recapitalization for two years, until 2004.

Although the industry is relatively healthy, FDIC staff has recommended

[[Page 9270]] that the Board retain the existing assessment rate

schedule for the second semiannual assessment period of 1995 so that

recapitalization is accomplished as soon as possible. The SAIF had an

estimated balance of $1.8 billion (unaudited) at year-end 1994, and

SAIF assumes resolution responsibility from the RTC on July 1, 1995.

Although estimated failed-institution assets appear manageable for 1995

and 1996, the SAIF remains vulnerable in the short run to a single

large-institution failure and to any significant increase in

anticipated loss rates.

VI. Request for Public Comment

Based upon the results of its semiannual review of the

recapitalization of the SAIF and of the SAIF assessment rates, the FDIC

is inclined to retain the existing assessment rate schedule applicable

to SAIF-member institutions. The FDIC wishes to have the benefit of

public comment before ending its review for this period, however. The

FDIC therefore requests comment as to whether it is appropriate for the

FDIC to retain the existing assessment rate schedule applicable to

SAIF-members, or whether the rates should be lowered to the statutory

minimum of 18 basis points or some point in between. The FDIC is

interested in receiving analyses exploring the impact a differential

between BIF and SAIF premiums might have on SAIF members, and the FDIC

invites comment as to whether the current spread of 8 basis points from

the lowest to the highest assessment rates should be retained for SAIF

members. The FDIC solicits comment as to how lower SAIF rates would

impact current efforts to recapitalize the SAIF. The FDIC further

invites comments as to whether current rates are sufficient to

recapitalize the SAIF in an expeditious manner.

VII. Paperwork Reduction Act

No collection of information pursuant to section 3504(h) of the

Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) are contained

in this proposed rule. Consequently, no information has been submitted

to the Office of Management and Budget (OMB) for review.

VIII. Regulatory Flexibility Analysis

The Board hereby certifies that the proposed rule would not have a

significant economic impact on a substantial number of small entities

within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601, et

seq.). This proposed rule will not necessitate the development of

sophisticated recordkeeping or reporting systems by small institutions

nor will small institutions need to seek out the expertise of

specialized accountants, lawyers, or managers to comply with this

proposed rule. Therefore, the provisions of that Act regarding an

initial and final regulatory flexibility analysis (Id. at 603 and 604)

do not apply here.

List of Subjects in 12 CFR Part 327

Assessments, Bank deposit insurance, Banks, Banking, Financing

Corporation, Savings associations.

For the reasons set forth in the preamble, the Board of Directors

of the Federal Deposit Insurance Corporation proposes to amend part 327

of title 12 of the Code of Federal Regulations as follows:

PART 327--ASSESSMENTS

1. The authority citation for part 327 continues to read as

follows:

Authority: 12 U.S.C. 1441, 1441b, 1817-1819.

2. Paragraph (c)(1) of Sec. 327.9 as added at 59 FR 67165,

effective April 1, 1995, will be retained without change. The text of

paragraph (c)(1) is republished for the convenience of the reader to

read as follows:

Sec. 327.9 Assessment rate schedules.

* * * * *

(c) SAIF members. (1) Subject to Sec. 327.4(c), the annual

assessment rate for each SAIF member shall be the rate designated in

the following schedule applicable to the assessment risk classification

assigned by the Corporation under Sec. 327.4(a) to that SAIF member

(the schedule utilizes the group and subgroup designations specified in

Sec. 327.4(a)):

Schedule

------------------------------------------------------------------------

Supervisory

subgroup

Capital group --------------------

A B C

------------------------------------------------------------------------

1.................................................. 23 26 29

2.................................................. 26 29 30

3.................................................. 29 30 31

------------------------------------------------------------------------

* * * * *

By the order of the Board of Directors.

Dated at Washington, D.C., this 31 day of January, 1995.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Acting Executive Secretary.

[FR Doc. 95-3669 Filed 2-15-95; 8:45 am]

BILLING CODE 6714-01-P