# FDIC FIL-24-2023: Notice of Proposed Rulemaking on Special Assessment Pursuant to Systemic Risk Determination

> Federal · Agency guidance · Superseded

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL23024

## Section

- **Citation:** FDIC FIL-24-2023
- **Heading:** Notice of Proposed Rulemaking on Special Assessment Pursuant to Systemic Risk Determination
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** Superseded
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Notice of Proposed Rulemaking on Special Assessment Pursuant to Systemic Risk Determination

## Text

Federal Deposit Insurance
Corporation
MEMO
TO:
The Board of Directors
FROM:
Patrick Mitchell
Director, Division of Insurance and Research
DATE:
May 11, 2023
RE:
Notice of Proposed Rulemaking on Special Assessments Pursuant to Systemic Risk Determination
RECOMMENDATION
Staff recommend that the FDIC’s Board of Directors (Board) adopt and authorize publication of the
attached notice of proposed rulemaking (NPR or proposal) with a 60-day comment period. The NPR would
impose special assessments to recover the loss to the Deposit Insurance Fund (DIF or Fund) arising from the
protection of uninsured depositors in connection with the systemic risk determination announced on March 12,
2023, following the closures of Silicon Valley Bank, Santa Clara, CA, and Signature Bank, New York, NY, as
required by the Federal Deposit Insurance Act (FDI Act).1
The assessment base for the special assessments would be equal to an insured depository institution’s
(IDI) estimated uninsured deposits, reported as of December 31, 2022, adjusted to exclude the first $5 billion in
estimated uninsured deposits from the IDI, or for IDIs that are part of a holding company with one or more
subsidiary IDIs, at the banking organization level. Under the proposal, the FDIC would collect special
assessments at an annual rate of approximately 12.5 basis points, over eight quarterly assessment periods,
which would result in estimated total revenue of $15.8 billion
st $5 billion in
estimated uninsured deposits from the IDI, or for IDIs that are part of a holding company with one or more
subsidiary IDIs, at the banking organization level. Under the proposal, the FDIC would collect special
assessments at an annual rate of approximately 12.5 basis points, over eight quarterly assessment periods,
which would result in estimated total revenue of $15.8 billion. Because the estimated loss pursuant to the
systemic risk determination will be periodically adjusted, the FDIC would retain the ability to cease collection
early, extend the special assessment collection period one or more quarters beyond the initial eight-quarter
collection period to collect the difference between estimated or actual losses and the amounts collected, and
impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank
and Signature Bank terminate.
BACKGROUND
On March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection
and Innovation, followed by the closure of Signature Bank by the New York State Department of Financial
1 12 U.S.C. 1823(c)(4)(G)(ii)(I).
Concur:
Harrel M. Pettway
General Counsel

Services on March 12, 2023. The FDIC was appointed as the receiver for both institutions.2, 3
Section 13(c)(4)(G) of the FDI Act permits the FDIC to take action or provide assistance to an IDI for
which the FDIC has been appointed receiver as necessary to avoid or mitigate adverse effects on economic
conditions or financial stability, following a recommendation by the FDIC Board of Directors (Board), with the
written concurrence of the Board of Governors of the Federal Reserve System (Board of Governors), and a
determination of systemic risk by the Secretary of the U.S
nce to an IDI for
which the FDIC has been appointed receiver as necessary to avoid or mitigate adverse effects on economic
conditions or financial stability, following a recommendation by the FDIC Board of Directors (Board), with the
written concurrence of the Board of Governors of the Federal Reserve System (Board of Governors), and a
determination of systemic risk by the Secretary of the U.S. Department of Treasury (Treasury) (in consultation
with the President).4
On March 12, 2023, the Secretary of the Treasury, acting on the recommendation of the FDIC Board and
Board of Governors and after consultation with the President, invoked the statutory systemic risk exception to
allow the FDIC to complete its resolution of both Silicon Valley Bank and Signature Bank in a manner that fully
protects all depositors.5 The full protection of all depositors, rather than imposing losses on uninsured
depositors, was intended to strengthen public confidence in the nation’s banking system.
On March 12 and 13, 2023, the FDIC transferred all deposits—both insured and uninsured—and
substantially all assets of these banks to newly created, full-service FDIC-operated bridge banks, Silicon Valley
Bridge Bank, N.A. (Silicon Valley Bridge Bank) and Signature Bridge Bank, N.A. (Signature Bridge Bank), in an
action designed to protect all depositors of these banks.6 The transfer of all deposits was completed under the
systemic risk exception declared on March 12.
On March 19, 2023, the FDIC announced it entered into a purchase and assumption agreement for
substantially all deposits and certain loan portfolios of Signature Bridge Bank.7 On March 27, 2023, the FDIC
entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank. This
announcement also disclosed that the FDIC and First-Citizens Bank & Trust Company (First Citizens) entered into
2 FDIC PR-16-2023
into a purchase and assumption agreement for
substantially all deposits and certain loan portfolios of Signature Bridge Bank.7 On March 27, 2023, the FDIC
entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank. This
announcement also disclosed that the FDIC and First-Citizens Bank & Trust Company (First Citizens) entered into
2 FDIC PR-16-2023. “FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors
of Silicon Valley Bank, Santa Clara, California.” March 10, 2023. https://www.fdic.gov/news/press-
releases/2023/pr23016.html.
3 FDIC PR-18-2023. “FDIC Establishes Signature Bridge Bank, N.A., as Successor to Signature Bank, New York,
NY.” March 12, 2023. https://www.fdic.gov/news/press-releases/2023/pr23018.html.
4 12 U.S.C. 1823(c)(4)(G). As used in this proposed rule, the term ‘‘bank’’ is synonymous with the term “insured
depository institution” as it is used in section 3(c)(2) of the FDI Act, 12 U.S.C. 1813(c)(2).
5 12 U.S.C. 1823(c)(4)(G). See also: FDIC PR-17-2023. “Joint Statement by the Department of the Treasury, Federal
Reserve, and FDIC.” March 12, 2023. https://www.fdic.gov/news/press-releases/2023/pr23017.html. See also:
“Remarks by Chairman Martin J. Gruenberg on Recent Bank Failures and the Federal Regulatory Response
before the Committee on Banking, Housing, and Urban Affairs, United States Senate.” March 27, 2023.
https://www.fdic.gov/news/speeches/2023/spmar2723.html.
6 A bridge bank is a chartered national bank that operates under a board appointed by the FDIC. It assumes the
deposits and certain other liabilities and purchases certain assets of a failed bank. The bridge bank structure is
designed to “bridge” the gap between the failure of a bank and the time when the FDIC can stabilize the
institution and implement an orderly resolution.
7 FDIC PR-21-2023. “Subsidiary of New York Community Bancorp, Inc. to Assume Deposits of Signature Bridge
Bank, N.A., From the FDIC.” March 19, 2023
other liabilities and purchases certain assets of a failed bank. The bridge bank structure is
designed to “bridge” the gap between the failure of a bank and the time when the FDIC can stabilize the
institution and implement an orderly resolution.
7 FDIC PR-21-2023. “Subsidiary of New York Community Bancorp, Inc. to Assume Deposits of Signature Bridge
Bank, N.A., From the FDIC.” March 19, 2023. https://www.fdic.gov/news/press-releases/2023/pr23021.html. The
purchase and assumption agreement did not include approximately $4 billion of deposits related to the former
Signature Bank’s digital-asset banking business. The FDIC announced that it would provide these deposits
directly to customers whose accounts are associated with the digital-asset banking business.
MEMO
2

a loss-share transaction on the commercial loans it purchased from Silicon Valley Bridge Bank.8
Legal Authority and Policy Objectives
Under section 13(c)(4)(G) of the FDI Act, the loss to the DIF arising from the use of a systemic risk
exception must be recovered from one or more special assessments on IDIs, depository institution holding
companies (with the concurrence of the Secretary of the Treasury with respect to holding companies), or both,
as the FDIC determines to be appropriate.9 As required by the FDI Act, the proposed special assessment, detailed
below, is intended and designed to recover the losses to the DIF incurred as the result of the actions taken by the
FDIC to protect the uninsured depositors of Silicon Valley Bank and Signature Bank following a determination of
systemic risk.10
Section 13(c)(4)(G) of the FDI Act provides the FDIC with discretion in the design and timeframe for any
special assessments to recover the losses to the DIF as a result of the systemic risk determination
to the DIF incurred as the result of the actions taken by the
FDIC to protect the uninsured depositors of Silicon Valley Bank and Signature Bank following a determination of
systemic risk.10
Section 13(c)(4)(G) of the FDI Act provides the FDIC with discretion in the design and timeframe for any
special assessments to recover the losses to the DIF as a result of the systemic risk determination. As detailed in
the sections that follow, in recommending the proposed special assessments under section 13(c)(4)(G) of the FDI
Act, staff considered the types of entities that benefit from any action taken or assistance provided under the
determination of systemic risk, economic conditions, the effects on the industry, and such other factors deemed
appropriate and relevant to the action taken or assistance provided.11
Estimated Special Assessment Amount
By statute, the FDIC is required to recover through special assessments any losses to the DIF incurred as
a result of the actions of the FDIC pursuant to the determination of systemic risk, which, in the case of the
determination pursuant to the closures of Silicon Valley Bank and Signature Bank, was to protect uninsured
depositors.12 To determine the amount of the cost of the failures attributable to the cost of covering uninsured
deposits, the FDIC determined the percentage of deposits that were uninsured at the time of failure and applied
that percentage to the total cost of the failure for each bank. At Signature Bank, for which 67 percent of deposits
were uninsured at the point of failure, the portion of the total estimated loss of $2.4 billion that is attributable to
the protection of uninsured depositors is $1.6 billion.
At Silicon Valley Bank, for which 88 percent of deposits were uninsured at the point of failure, the
portion of the total estimated loss of $16.1 billion that is attributable to the protection of uninsured depositors is
$14.2 billion
d at the point of failure, the portion of the total estimated loss of $2.4 billion that is attributable to
the protection of uninsured depositors is $1.6 billion.
At Silicon Valley Bank, for which 88 percent of deposits were uninsured at the point of failure, the
portion of the total estimated loss of $16.1 billion that is attributable to the protection of uninsured depositors is
$14.2 billion. The cost estimate for the sale of the Silicon Valley Bridge Bank to First Citizens has been revised
from the original estimate of $20.0 billion to approximately $16.1 billion due to a decrease in the amount of
liabilities assumed by First Citizens relative to the initial estimate, higher anticipated recoveries from certain
other assets in receivership, and an increase in the market value of receivership securities. This revised cost
estimate forms the basis for the Silicon Valley Bank portion of the current special assessment calculation, and,
as with all failed bank receiverships, will be periodically adjusted as assets are sold, liabilities are satisfied, and
receivership expenses are incurred. As noted below, the amount of the special assessment will be adjusted as
the loss estimate changes.
In total, of the $18.5 billion in estimated losses at the two banks and incurred by the DIF in the first
8 FDIC PR-23-2023. “First-Citizens Bank & Trust Company, Raleigh, NC, to Assume All Deposits and Loans of
Silicon Valley Bridge Bank, N.A., From the FDIC.” March 26, 2023. https://www.fdic.gov/news/press-
releases/2023/pr23023.html.
9 12 U.S.C. 1823(c)(4)(G)(ii)(I).
10 12 U.S.C. 1823(c)(4)(G)(ii)(III).
11 12 U.S.C. 1823(c)(4)(G)(ii)(III).
12 12 U.S.C. 1823(c)(4)(G)(ii).
MEMO
3
n the first
8 FDIC PR-23-2023. “First-Citizens Bank & Trust Company, Raleigh, NC, to Assume All Deposits and Loans of
Silicon Valley Bridge Bank, N.A., From the FDIC.” March 26, 2023. https://www.fdic.gov/news/press-
releases/2023/pr23023.html.
9 12 U.S.C. 1823(c)(4)(G)(ii)(I).
10 12 U.S.C. 1823(c)(4)(G)(ii)(III).
11 12 U.S.C. 1823(c)(4)(G)(ii)(III).
12 12 U.S.C. 1823(c)(4)(G)(ii).
MEMO
3

quarter of 2023, the estimated loss attributable to the protection of uninsured depositors was $15.8 billion.
DISCUSSION OF THE PROPOSAL
Overview
Staff recommend that the Board, under its general rulemaking authority in Section 9 of the FDI Act,
adopt and authorize for publication this proposal that would impose special assessments to recover the loss to
the DIF arising from the protection of uninsured depositors in connection with the systemic risk determination
announced on March 12, 2023, following the closures of Silicon Valley Bank and Signature Bank, as required by
the FDI Act. The total amount collected for the special assessments would be approximately equal to the losses
attributable to the protection of uninsured depositors at these two failed banks, which are currently estimated
to total $15.8 billion.
Rate for the Special Assessments
The proposal would impose an annual special assessment rate of approximately 12.5 basis points. The
special assessment rate was derived by dividing the current loss estimate attributable to the protection of
uninsured depositors of $15.8 billion by the proposed assessment base calculated for all IDIs subject to special
assessments as of December 31, 2022, totaling $6.3 trillion. As described in detail below, the proposed
assessment base is equal to estimated uninsured deposits reported as of December 31, 2022, after applying the
$5 billion deduction
loss estimate attributable to the protection of
uninsured depositors of $15.8 billion by the proposed assessment base calculated for all IDIs subject to special
assessments as of December 31, 2022, totaling $6.3 trillion. As described in detail below, the proposed
assessment base is equal to estimated uninsured deposits reported as of December 31, 2022, after applying the
$5 billion deduction. The resulting rate is then divided by two to reflect the two year (eight-quarter) collection
period, as described below, resulting in an annual rate of approximately 12.5 basis points, or a quarterly rate of
3.13 basis points. The special assessment rate is subject to change prior to any final rule depending on any
adjustments to the loss estimate, mergers or failures, or amendments to reported estimates of uninsured
deposits.13 Over the eight-quarter collection period, staff estimate that the FDIC would collect an amount
sufficient to recover estimated losses attributable to the protection of uninsured depositors of Silicon Valley
Bank and Signature Bank, which are currently estimated to total $15.8 billion, totaling approximately $2.0 billion
per quarter.
Assessment Base for the Special Assessments
Under the proposal, each IDI’s assessment base for the special assessments would be equal to
estimated uninsured deposits as reported in the Consolidated Reports of Condition and Income (Call Report) or
Report of Assets and Liabilities of U.S
Bank, which are currently estimated to total $15.8 billion, totaling approximately $2.0 billion
per quarter.
Assessment Base for the Special Assessments
Under the proposal, each IDI’s assessment base for the special assessments would be equal to
estimated uninsured deposits as reported in 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) as of December 31,
2022, with certain adjustments.14 The assessment base for the special assessments would be adjusted to
exclude the first $5 billion from estimated uninsured deposits reported as of December 31, 2022, applicable
either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the
13 Estimates of the special assessment rate and expected effects in this proposed rule generally reflect any
amendments to data reported through February 21, 2023, for the reporting period ending December 31, 2022.
However, given the closure of First Republic Bank, San Francisco, CA announced on May 1, 2023, estimates in
this proposed rule exclude First Republic Bank in addition to Silicon Valley Bank and Signature Bank. See FDIC:
PR-34-2023. “JPMorgan Chase Bank, National Association, Columbus, Ohio Assumes All the Deposits of First
Republic Bank, San Francisco, California.” May 1, 2023. https://www.fdic.gov/news/press-
releases/2023/pr23034.html.
14 Estimated uninsured deposits are reported in Memoranda Item 2 on Schedule RC-O, Other Data for Deposit
Insurance Assessments of both the Call Report and FFIEC 002.
MEMO
4
R-34-2023. “JPMorgan Chase Bank, National Association, Columbus, Ohio Assumes All the Deposits of First
Republic Bank, San Francisco, California.” May 1, 2023. https://www.fdic.gov/news/press-
releases/2023/pr23034.html.
14 Estimated uninsured deposits are reported in Memoranda Item 2 on Schedule RC-O, Other Data for Deposit
Insurance Assessments of both the Call Report and FFIEC 002.
MEMO
4

extent that an IDI is part of a holding company with one or more subsidiary IDIs.15 If an IDI is part of a holding
company with one or more subsidiary IDIs, the $5 billion deduction would be apportioned based on its
estimated uninsured deposits as a percentage of total estimated uninsured deposits held by all IDI affiliates in
the banking organization.16, 17
Estimated uninsured deposits as of December 31, 2022, are the most recently available data reflecting
the amount of uninsured deposits in each institution near or at the time the determination of systemic risk was
made and the uninsured depositors of the failed institutions were protected. Using estimated uninsured
deposits as of December 31, 2022, in calculating special assessments would result in institutions that had the
largest amounts of uninsured deposits at the time of the determination of systemic risk paying a larger share of
the special assessments.
Defining the assessment base for the special assessment as estimated uninsured deposits reported as
of December 31, 2022, and deducting $5 billion from an IDI or banking organization’s assessment base, would
have the result that any banking organization that reported less than $5 billion in uninsured deposits would not
be subject to the special assessment. In general, large banks and regional banks, and particularly those with
large amounts of uninsured deposits, were the banks most exposed to and likely would have been the most
affected by uninsured deposit runs
anization’s assessment base, would
have the result that any banking organization that reported less than $5 billion in uninsured deposits would not
be subject to the special assessment. In general, large banks and regional banks, and particularly those with
large amounts of uninsured deposits, were the banks most exposed to and likely would have been the most
affected by uninsured deposit runs. Indeed, shortly after Silicon Valley Bank was closed, a number of institutions
with large amounts of uninsured deposits reported that depositors had begun to withdraw their funds. The
failure of Silicon Valley Bank and the impending failure of Signature Bank raised concerns that, absent
immediate assistance for uninsured depositors, there could be negative knock-on consequences for similarly
situated institutions, depositors and the financial system more broadly. Generally speaking, larger banks
benefited the most from the stability provided to the banking industry under the systemic risk determination.
The adjustments to the assessment base for the special assessments would serve several purposes.
First, IDIs without affiliates and banking organizations that reported $5 billion or less in estimated uninsured
deposits as of December 31, 2022, would not contribute to the special assessments. IDIs and banking
organizations that reported more than $5 billion in estimated uninsured deposits would pay based on the
marginal amounts of uninsured deposits they reported, helping to mitigate a “cliff effect” that might otherwise
apply if a different method, such as an asset size threshold, were used to determine applicability, and thereby
ensuring more equitable treatment. Otherwise, a banking organization just over a particular size threshold
would pay special assessments, while a banking organization just below such size threshold would pay none.
With the adjustments to the assessment base, the banks that benefited the most would be responsible for
paying special assessments
, were used to determine applicability, and thereby
ensuring more equitable treatment. Otherwise, a banking organization just over a particular size threshold
would pay special assessments, while a banking organization just below such size threshold would pay none.
With the adjustments to the assessment base, the banks that benefited the most would be responsible for
paying special assessments.
Second, the proposed methodology also would result in most small IDIs and IDIs that are part of a small
banking organization not paying anything towards the special assessments. As proposed, staff estimate that the
special assessments would not be applicable to any banking organizations with total assets under $5 billion.
Finally, deducting $5 billion from the assessment base of estimated uninsured deposits at the banking
organization level for those with more than one IDI would ensure that banking organizations with similar
15 As used in this proposal, the term “banking organization” includes IDIs that are not subsidiaries of a holding
company as well as holding companies with one or more subsidiary IDIs.
16 As used in this proposal, the term “affiliate” has the same meaning as defined in section 3 of the FDIC Act, 12
U.S.C. 1813(w)(6), which references the Bank Holding Company Act (“any company that controls, is controlled
by, or is under common control with another company”). See 12 U.S.C. 1841(k).
17 IDIs with less than $1 billion in total assets as of June 30, 2021, were not required to report the estimated
amount of uninsured deposits on the Call Report for December 31, 2022. Therefore, for IDIs that had less than $1
billion in total assets as of June 30, 2021, the amount and share of estimated uninsured deposits as of December
31, 2022, would be zero.
MEMO
5
See 12 U.S.C. 1841(k).
17 IDIs with less than $1 billion in total assets as of June 30, 2021, were not required to report the estimated
amount of uninsured deposits on the Call Report for December 31, 2022. Therefore, for IDIs that had less than $1
billion in total assets as of June 30, 2021, the amount and share of estimated uninsured deposits as of December
31, 2022, would be zero.
MEMO
5

amounts of estimated uninsured deposits pay a similar special assessment. For example, a banking organization
with multiple IDIs with large amounts of estimated uninsured deposits would not have an advantage over other
similarly-positioned IDIs that are not subsidiaries of a holding company because instead of excluding $5 billion
of estimated uninsured deposits for each IDI in one banking organization, the $5 billion deduction would be
distributed across multiple affiliated IDIs.
The proposed methodology ensures that the banks that benefited most from the assistance provided
under the systemic risk determination would be charged special assessments to recover losses to the DIF
resulting from the protection of uninsured depositors, with banks of larger asset sizes and that hold greater
amounts of uninsured deposits paying higher special assessments.
Collection Period for Special Assessments
Under the proposal, the special assessments would be collected beginning with the first quarterly
assessment period of 2024 (i.e., January 1 through March 31, 2024, with an invoice payment date of June 28,
2024). In order to preserve liquidity at IDIs, and in the interest of consistent and predictable assessments, the
special assessments would be collected over eight quarters.
The estimated loss attributable to the protection of uninsured depositors pursuant to the systemic risk
determination is currently estimated to total $15.8 billion
h March 31, 2024, with an invoice payment date of June 28,
2024). In order to preserve liquidity at IDIs, and in the interest of consistent and predictable assessments, the
special assessments would be collected over eight quarters.
The estimated loss attributable to the protection of uninsured depositors pursuant to the systemic risk
determination is currently estimated to total $15.8 billion. However, loss estimates for failed banks are
periodically adjusted as assets are sold, liabilities are satisfied, and receivership expenses are incurred. The
exact amount of losses incurred will be determined when the FDIC terminates the receiverships.
If, prior to the end of the eight-quarter collection period, the FDIC expects the loss to be lower than the
amount it expects to collect from the special assessments, the FDIC would cease collection in the quarter after it
has collected enough to recover actual or estimated losses.18 Alternatively, if at the end of the eight-quarter
collection period, the estimated or actual loss exceeds the amount collected, the FDIC would extend the
collection period over one or more quarters, as needed, to recover the difference between the amount collected
and the estimated or actual loss, at a rate that would not exceed the 3.13 basis point quarterly special
assessment rate applied during the initial eight-quarter collection period.
Receiverships are terminated once the FDIC has completed the disposition of the receivership’s assets
and has resolved all obligations, claims, and other impediments. The termination of the receiverships to which
the March 12, 2023 systemic risk determination applied may occur years after the initial eight-quarter collection
period and any extended collection period
-quarter collection period.
Receiverships are terminated once the FDIC has completed the disposition of the receivership’s assets
and has resolved all obligations, claims, and other impediments. The termination of the receiverships to which
the March 12, 2023 systemic risk determination applied may occur years after the initial eight-quarter collection
period and any extended collection period. In the likely event that the final loss amount at the termination of the
receiverships is not determined until after the special assessments have been collected, and if the actual losses
calculated as of the termination of the receiverships exceed the amount collected through such special
assessments, the FDIC would impose a one-time final shortfall special assessment to collect the amount of
actual losses in excess of the amount of special assessments collected, if any.
ANALYSIS
The following summarizes the factors considered in recommending special assessments as proposed.19
The Types of Entities that Benefit
18 The FDIC is required by statute to place any amount of special assessments collected in excess of actual losses
in the DIF.
19 In prescribing special assessments, the FDIC is required by statute to consider:
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With the rapid collapse of Silicon Valley Bank and Signature Bank in the space of 48 hours, concerns
arose that risk could spread more widely to other institutions and that the financial system as a whole could be
placed at risk. Shortly after Silicon Valley Bank was closed on March 10, 2023, a number of institutions with large
amounts of uninsured deposits reported that depositors had begun to withdraw their funds. The extent to which
IDIs rely on uninsured deposits for funding varies significantly. Uninsured deposits were used to fund nearly
three-quarters of the assets at Silicon Valley Bank and Signature Bank
risk. Shortly after Silicon Valley Bank was closed on March 10, 2023, a number of institutions with large
amounts of uninsured deposits reported that depositors had begun to withdraw their funds. The extent to which
IDIs rely on uninsured deposits for funding varies significantly. Uninsured deposits were used to fund nearly
three-quarters of the assets at Silicon Valley Bank and Signature Bank. On average, the largest banking
organizations by asset size fund a larger share of assets with uninsured deposits, based on data as of December
31, 2022. Among banking organizations that report uninsured deposits, those with total assets between $1
billion and $5 billion are generally the least reliant on uninsured deposits for funding, with uninsured deposits
averaging 28.1 percent of assets, compared with the largest banking organizations with total assets greater than
$250 billion, which had uninsured deposits that averaged 35.8 percent of assets.
Deposits are the most common funding source for many institutions; however, other liability sources
such as borrowings can also provide funding. Deposits and other liability sources are often differentiated by
their stability and customer profile characteristics. While some uninsured deposit relationships remain stable
when a bank is in good condition, such relationships might become less stable due to their uninsured status if a
bank experiences financial problems or if the banking industry experiences stress events.
Uninsured deposit concentrations of IDIs, meaning the percentage of domestic deposits that are
uninsured, also vary significantly. At Silicon Valley Bank, 88 percent of deposits were uninsured at the point of
failure compared to 67 percent at Signature Bank. On average, the largest banking organizations by asset size
reported significantly greater uninsured deposit concentrations relative to smaller banking organizations, based
on data as of December 31, 2022
domestic deposits that are
uninsured, also vary significantly. At Silicon Valley Bank, 88 percent of deposits were uninsured at the point of
failure compared to 67 percent at Signature Bank. On average, the largest banking organizations by asset size
reported significantly greater uninsured deposit concentrations relative to smaller banking organizations, based
on data as of December 31, 2022. Banking organizations with total assets between $1 billion and $5 billion
generally reported the lowest percentage of uninsured deposits to total domestic deposits, averaging 33.2
percent, compared with the largest banking organizations with total assets greater than $250 billion, which
averaged 51.8 percent.
On March 12, 2023, the FDIC Board and the Board of Governors voted unanimously to recommend, and
the Treasury Secretary, in consultation with the President, determined that the FDIC could use emergency
systemic risk authorities under the FDI Act to complete its resolution of both Silicon Valley Bank and Signature
Bank in a manner that fully protects all depositors.20 The full protection of all depositors, rather than imposing
losses on uninsured depositors, was intended to strengthen public confidence in the nation’s banking system.
Based on Federal Reserve data reported by a sample of domestically chartered banks, domestic
deposits declined by over 2 percent during the first two months of 2023, predominately among the top 25
commercial banks by asset size. This followed similar declines in domestic deposits over the prior three
quarters, likely driven by the shift of certain types of deposits into higher-yielding alternatives. Following the
March 2023 bank failures and the determination of systemic risk, deposits of the top 25 commercial banks grew
slightly while deposit outflows rapidly accelerated, with banks outside of the top 25 experiencing a four percent
decline in two weeks
mestic deposits over the prior three
quarters, likely driven by the shift of certain types of deposits into higher-yielding alternatives. Following the
March 2023 bank failures and the determination of systemic risk, deposits of the top 25 commercial banks grew
slightly while deposit outflows rapidly accelerated, with banks outside of the top 25 experiencing a four percent
decline in two weeks. Since late March, Federal Reserve data indicates that deposit flows have stabilized, with
some reversal of prior outflows.21 First quarter earnings releases of select regional banks confirmed sizeable
(i) The types of entities that benefit from any action taken or assistance provided.
(ii) Economic conditions.
(iii) The effects on the industry.
(iv) Such other factors as the FDIC deems appropriate and relevant to the action taken or assistance provided.
Section 13(c)(4)(G) of the FDI Act.
20 12 U.S.C. 1823(c)(4)(G). See also: FDIC PR-17-2023. “Joint Statement by the Department of the Treasury,
Federal Reserve, and FDIC.” March 12, 2023. https://www.fdic.gov/news/press-releases/2023/pr23017.html.
21 Board of Governors of the Federal Reserve System. Assets and Liabilities of Commercial Banks in the United
States – H.8. Available at: https://www.federalreserve.gov/releases/h8/default.htm.
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outflows of deposits, while other large and regional banks reported more modest declines or inflows.
In the weeks that followed the determination of systemic risk, efforts to stabilize the banking system
and stem potential contagion from the failures of Silicon Valley Bank and Signature Bank ensured that
depositors would continue to have access to their savings, that small businesses and other employers could
continue to make payrolls, and that other banks could continue to extend credit to borrowers and serve as a
source of support
ion of systemic risk, efforts to stabilize the banking system
and stem potential contagion from the failures of Silicon Valley Bank and Signature Bank ensured that
depositors would continue to have access to their savings, that small businesses and other employers could
continue to make payrolls, and that other banks could continue to extend credit to borrowers and serve as a
source of support.
In general, large banks and regional banks, and particularly those with large amounts of uninsured
deposits, were the banks most exposed to and likely would have been the most affected by uninsured deposit
runs. Indeed, shortly after Silicon Valley Bank was closed, a number of institutions with large amounts of
uninsured deposits reported that depositors had begun to withdraw their funds. The failure of Silicon Valley
Bank and the impending failure of Signature Bank raised concerns that, absent immediate assistance for
uninsured depositors, there could be negative knock-on consequences for similarly situated institutions,
depositors and the financial system more broadly. Generally speaking, larger banks benefited the most from the
stability provided to the banking industry under the systemic risk determination. Under the proposal, the banks
that benefited most from the assistance provided under the systemic risk determination would be charged
special assessments to recover losses to the DIF resulting from the protection of uninsured depositors, with
banks of larger asset sizes and that hold greater amounts of uninsured deposits paying higher special
assessments.
Effects on the Industry
In calculating the assessment base for the special assessments, the FDIC would deduct $5 billion from
each IDI or banking organization’s aggregate estimated uninsured deposits reported as of December 31, 2022. As
a result, any institution that did not report any uninsured deposits as of December 31, 2022, would not be
subject to the special assessment
ial
assessments.
Effects on the Industry
In calculating the assessment base for the special assessments, the FDIC would deduct $5 billion from
each IDI or banking organization’s aggregate estimated uninsured deposits reported as of December 31, 2022. As
a result, any institution that did not report any uninsured deposits as of December 31, 2022, would not be
subject to the special assessment. Additionally, most small IDIs and IDIs that are part of a small banking
organization would not pay anything towards the special assessment. Some small and mid-size IDIs would be
subject to the special assessment if they were subsidiaries of a banking organization with more than $5 billion in
uninsured deposits and such IDIs reported positive amounts of uninsured deposits after application of the
deduction, or if they directly held more than $5 billion in estimated uninsured deposits as of December 31, 2022,
which for smaller institutions would constitute heavy reliance on uninsured deposits.
Based on data reported as of December 31, 2022, and as captured in Table 1 below, staff estimate that
113 banking organizations would be subject to special assessments, including 48 banking organizations with
total assets over $50 billion and 65 banking organizations with total assets between $5 and $50 billion. No
banking organizations with total assets under $5 billion would pay special assessments, based on data reported
as of December 31, 2022.22 It is anticipated that the same banking organizations subject to special assessments
would also be subject to any extended special assessments or final shortfall special assessment, absent the
effects of any mergers, consolidations, failures, or other terminations of deposit insurance that occur through
the determination of such extended special assessments or final shortfall special assessment
It is anticipated that the same banking organizations subject to special assessments
would also be subject to any extended special assessments or final shortfall special assessment, absent the
effects of any mergers, consolidations, failures, or other terminations of deposit insurance that occur through
the determination of such extended special assessments or final shortfall special assessment.
22 The number of banking organizations subject to special assessments may change prior to any final rule
depending on any adjustments to the loss estimate, mergers or failures, or similar activities, or amendments to
reported estimates of uninsured deposits.
MEMO
8

Table 1 – Banking Organizations Required to Pay Special Assessments,
Based on Data Reported as of December 31, 2022
Asset Size of
Banking Organization
Number of Banking
Organizations
Required to Pay
Special
Assessments
Percentage of
Banking
Organizations
Required to
Pay Special
Assessments
[Percent]
Share of
Special
Assessments
[Percent]
Share of
Industry
Assets
[Percent]
Greater than $50 billion
48
1.1
95.2
76.0
Between $5 and $50 billion
65
1.5
4.8
7.0
Under $5 billion
0
0.0
0.0
0.0
Total
113
2.6
100.0
83.0
Capital and Earnings Analysis
Staff estimate that the FDIC would collect through special assessments the estimated loss from
protecting uninsured depositors at Silicon Valley Bank and Signature Bank of approximately $15.8 billion, over
the eight-quarter collection period. Banking organizations would recognize the accrual of a liability and an
estimated loss (i.e., expense) from a loss contingency for the special assessment when the institution
determines that the conditions for accrual under generally accepted accounting principles (GAAP) have been
met. This analysis assumes that the effects on capital and income of the entire amount of the special
assessments to be collected over eight quarters would occur in one quarter only
d an
estimated loss (i.e., expense) from a loss contingency for the special assessment when the institution
determines that the conditions for accrual under generally accepted accounting principles (GAAP) have been
met. This analysis assumes that the effects on capital and income of the entire amount of the special
assessments to be collected over eight quarters would occur in one quarter only.
To estimate the effects of the special assessments relative to a banking organization’s capital, the
analysis considers the effective pre-tax cost of special assessments, and assumes that an institution will
maintain its dividend rate (that is, dividends as a percentage of net income) unchanged from the weighted
average rate reported over the four quarters ending December 31, 2022.23 Given the assumptions in the analysis,
and based on data as of December 31, 2022, staff estimate that, on average, the proposed special assessments
would decrease the dollar amount of Tier 1 capital of banking organizations that would be required to pay
special assessments by an estimated 61 basis points.24 No banking organizations are estimated to fall below the
minimum capital requirement (a four percent Tier 1 capital-to-assets ratio) as a result of the proposed special
23 For purposes of this analysis, Tier 1 capital to assets is used as the measure of capital adequacy. In the event
that the ratio of Tier 1 capital to assets falls below four percent, however, this assumption is modified such that
an institution retains the amount necessary to reach a four percent minimum and distributes any remaining
funds according to the dividend payout rate. The analysis uses four percent as the threshold because IDIs
generally need to maintain a Tier 1 leverage ratio of 4.0 percent or greater to be considered “adequately
capitalized” under Prompt Corrective Action Standards. See 12 CFR 324.403(b)(2)
an institution retains the amount necessary to reach a four percent minimum and distributes any remaining
funds according to the dividend payout rate. The analysis uses four percent as the threshold because IDIs
generally need to maintain a Tier 1 leverage ratio of 4.0 percent or greater to be considered “adequately
capitalized” under Prompt Corrective Action Standards. See 12 CFR 324.403(b)(2). Additionally, Federal Reserve
Board-regulated institutions must generally must maintain a Tier 1 leverage ratio of 4.0 percent or greater to
meet the minimum capital requirements. See 12 CFR 217.10(a)(1).
24 Estimated effects on capital are calculated based on data reported as of December 31, 2022, on the Call Report
and the Consolidated Financial Statements for Holding Companies (FR Y-9C), respectively, for IDIs that are not
subsidiaries of a holding company or that are part of a banking organization with only one subsidiary IDI
required to pay special assessments, and for banking organizations, to the extent that an IDI is part of a holding
company with more than one subsidiary IDI required to pay special assessments.
MEMO
9

assessments.
The banking industry reported full-year 2022 net income lower than full-year 2021 net income, but still
above the pre-pandemic average. While special assessments are allocated based on estimated uninsured
deposits reported at the banking organization level, IDIs will be responsible for payment of the special
assessments. Staff analyzed the effect of the special assessments on income reported at the IDI-level for IDIs
subject to special assessments that are not subsidiaries of a holding company or that are subsidiaries of a
holding company with only one IDI subsidiary
ased on estimated uninsured
deposits reported at the banking organization level, IDIs will be responsible for payment of the special
assessments. Staff analyzed the effect of the special assessments on income reported at the IDI-level for IDIs
subject to special assessments that are not subsidiaries of a holding company or that are subsidiaries of a
holding company with only one IDI subsidiary. For IDIs that are subsidiaries of a holding company with more
than one IDI subsidiary, staff analyzed the effect of the special assessments by aggregating the income reported
by all IDIs subject to special assessments within each banking organization since the IDIs will be responsible for
payment.
Staff analyzed the impact of the special assessments on banking organizations that were profitable
based on their average quarterly income from January 1, 2022 to December 31, 2022.25 The effects on income of
the entire amount of special assessments to be collected over eight quarters are assumed to occur in one
quarter only. Given the assumptions and the estimated loss amount, staff estimate that the proposed special
assessments would result in an average one-quarter reduction in income of 17.5 percent for banking
organizations subject to special assessments.26 Approximately 66 percent of profitable banking organizations
subject to the proposal are projected to have special assessments of less than 20 percent of income, including
23 percent with special assessments of less than 5 percent of income. Another 34 percent of profitable banking
organizations subject to the proposal are projected to have special assessments equal to or exceeding 20
percent of income.
Economic Conditions
On February 28, 2023, the FDIC released the results of the Quarterly Banking Profile, which provided a
comprehensive summary of financial results for all FDIC-insured institutions for the fourth quarter of 2022
Another 34 percent of profitable banking
organizations subject to the proposal are projected to have special assessments equal to or exceeding 20
percent of income.
Economic Conditions
On February 28, 2023, the FDIC released the results of the Quarterly Banking Profile, which provided a
comprehensive summary of financial results for all FDIC-insured institutions for the fourth quarter of 2022.
Overall, key banking industry metrics remained favorable in the quarter.27
Loan growth continued, net interest income grew, and asset quality measures remained favorable.
Further, the industry remained well capitalized and highly liquid, but the report also highlighted a key weakness
in elevated levels of unrealized losses on investment securities due to rapid increases in market interest rates.
Unrealized losses on available-for-sale and held-to-maturity securities totaled $620 billion as of December 31,
2022, and unrealized losses on available-for-sale securities have meaningfully reduced the reported equity
capital of the banking industry. The combination of a high level of longer-term asset maturities and a moderate
decline in total deposits underscored the risk that unrealized losses could become actual losses should banks
need to sell securities to meet liquidity needs.
The financial system continues to face significant downside risks from the effects of inflation, rising
market interest rates, and a weak economic outlook. Credit quality and profitability may weaken due to these
risks, potentially resulting in tighter loan underwriting, slower loan growth, higher provision expenses, and
liquidity constraints. Additional short-term interest rate increases, combined with longer asset maturities may
25 There were no banking organizations that would be required to pay special assessments that were
unprofitable based on average quarterly income from January 1, 2022 to December 31, 2022.
26 Earnings or income are quarterly income before assessments and taxes
provision expenses, and
liquidity constraints. Additional short-term interest rate increases, combined with longer asset maturities may
25 There were no banking organizations that would be required to pay special assessments that were
unprofitable based on average quarterly income from January 1, 2022 to December 31, 2022.
26 Earnings or income are quarterly income before assessments and taxes. Quarterly income is assumed to equal
average income from January 1, 2022 through December 31, 2022.
27 FDIC Quarterly Banking Profile, Fourth Quarter 2022. https://www.fdic.gov/analysis/quarterly-banking-
profile/qbp/2022dec/.
MEMO
10

continue to increase unrealized losses on securities and affect bank balance sheets in coming quarters.
Despite these downside risks, in the weeks that followed the failure of Silicon Valley Bank and Signature
Bank, the state of the U.S. financial system remained sound and institutions are well positioned to absorb a
special assessment.28
ALTERNATIVES
Staff considered alternatives to this proposal to collect special assessments to recover the loss to the
DIF arising from the protection of all uninsured depositors in connection with the systemic risk determination
announced on March 12, 2023, as required by the FDI Act. In staff’s view, the proposal reflects an appropriate
balancing of the goal of applying special assessments to the types of entities that benefited the most from the
protection of uninsured depositors provided under the determination of systemic risk while ensuring equitable,
transparent, and consistent treatment based on the amounts of uninsured deposits at the time of the
determination of systemic risk.
The first alternative would be to impose a one-time special assessment at the end of the quarter
following the effective date
enefited the most from the
protection of uninsured depositors provided under the determination of systemic risk while ensuring equitable,
transparent, and consistent treatment based on the amounts of uninsured deposits at the time of the
determination of systemic risk.
The first alternative would be to impose a one-time special assessment at the end of the quarter
following the effective date. Calculation of the special assessment, including the special assessment rate, would
be the same as proposed, but instead of collecting the amount over eight quarters, the FDIC would collect the
entire amount in one quarter. While under both the proposal and this alternative, the estimated amount of the
special assessment would be recognized with the accrual of a liability and an estimated loss (i.e., expense) from
a loss contingency when the institution determines that the conditions for accrual under GAAP have been met,
which impacts capital and earnings, this alternative would additionally require payment of the entire amount in
the second quarter of 2024, and would impact liquidity significantly in one quarter.
The second alternative would be to base applicability on an asset size threshold instead of deducting
the first $5 billion in estimated uninsured deposits in calculating an IDI or banking organization’s assessment
base for the special assessment. As described previously, in implementing special assessments, the FDI Act
requires the FDIC to consider the types of entities that benefit from any action taken or assistance provided
pursuant to determination of systemic risk.29 Large banks and regional banks, and particularly those with large
amounts of uninsured deposits, were the banks most exposed to and likely would have been the most affected
by uninsured deposit runs had those occurred as a result of the bank failures. Larger banks also benefited the
most from the stability provided to the banking industry under the systemic risk determination
f systemic risk.29 Large banks and regional banks, and particularly those with large
amounts of uninsured deposits, were the banks most exposed to and likely would have been the most affected
by uninsured deposit runs had those occurred as a result of the bank failures. Larger banks also benefited the
most from the stability provided to the banking industry under the systemic risk determination. While both the
proposal, including the $5 billion deduction from estimated uninsured deposits, and an asset-size-based
applicability threshold would effectively remove the smallest institutions from eligibility, the proposed
deduction of $5 billion from each banking organization’s estimated uninsured deposits in calculating the special
assessment would help to mitigate a “cliff effect” relative to applying a different threshold for applicability, such
as applying an asset size threshold, thereby ensuring more equitable treatment. With an asset size threshold, an
IDI just above such threshold would pay a significant amount in special assessments, while an IDI just below
such threshold would pay none.
A third alternative would be to eliminate the proposed $5 billion deduction from the assessment base
for the special assessment, and therefore allocate the special assessments among IDIs based on each IDI or
banking organization’s estimated uninsured deposits as of December 31, 2022. This alternative would result in
special assessments imposed on every IDI that reported a non-zero amount of estimated uninsured deposits as
28 Statement of Martin J. Gruenberg, Chairman of the FDIC on “Recent Bank Failures and the Federal Regulatory
Response,” before the United States Senate Committee on Banking, Housing, and Urban Affairs. March 28, 2023.
https://www.banking.senate.gov/imo/media/doc/Gruenberg%20Testimony%203-28-23.pdf.
29 12 U.S.C. 1823(c)(4)(G)(ii)(III).
MEMO
11
-zero amount of estimated uninsured deposits as
28 Statement of Martin J. Gruenberg, Chairman of the FDIC on “Recent Bank Failures and the Federal Regulatory
Response,” before the United States Senate Committee on Banking, Housing, and Urban Affairs. March 28, 2023.
https://www.banking.senate.gov/imo/media/doc/Gruenberg%20Testimony%203-28-23.pdf.
29 12 U.S.C. 1823(c)(4)(G)(ii)(III).
MEMO
11

of December 31, 2022, or nearly 100 percent of all IDIs with total assets of $1 billion or more.30 Relative to the
proposal, more IDIs would pay special assessments under this alternative, and IDIs with greater amounts of
uninsured deposits would generally pay lower special assessments relative to the proposal since the special
assessments would be allocated across a significantly larger number of institutions. However, given the FDIC’s
statutory requirement to consider the types of entities that benefit from any action taken or assistance provided
under the determination of systemic risk in implementing special assessments, this alternative would not
allocate special assessments to the larger banks that benefited the most from the stability provided to the
banking industry under the systemic risk determination.
A fourth alternative would be to allocate the special assessments among IDIs based on each IDI’s
estimated uninsured deposits as a percentage of their total domestic deposits reported as of December 31,
2022, as a proxy for reliance on uninsured deposits at the time the determination of systemic risk was made and
uninsured depositors of the failed institutions were protected
isk determination.
A fourth alternative would be to allocate the special assessments among IDIs based on each IDI’s
estimated uninsured deposits as a percentage of their total domestic deposits reported as of December 31,
2022, as a proxy for reliance on uninsured deposits at the time the determination of systemic risk was made and
uninsured depositors of the failed institutions were protected. Similar to the third alternative, this would result
in a special assessment imposed on every IDI that reported a non-zero amount of estimated uninsured deposits
as of December 31, 2022, or nearly 100 percent of IDIs with total assets of $1 billion or more.31 Under this
alternative, IDIs with a greater reliance on uninsured deposits would generally pay the greatest amount of
special assessments; however, the special assessments would be allocated across a large number of institutions.
This alternative would result in institutions of vastly different asset sizes paying a similar dollar amount of
special assessments. It also would result in some smaller IDIs and banking organizations paying potentially
significant amounts of special assessments, and the larger banks that have high amounts of uninsured deposits
and benefited the most from the stability provided to the banking industry under the systemic risk
determination, but that do not have high uninsured deposit concentrations, paying a smaller share of special
assessments.
A fifth alternative would be to collect 50 percent of the special assessments during the initial four-
quarter collection period based on estimated uninsured deposits reported by all IDIs as of December 31, 2022,
and collect the remaining special assessments for an additional four quarter collection period based on an
updated estimate of losses pursuant to the systemic risk determination and estimated uninsured deposits
reported by all IDIs as of December 31, 2023
ments during the initial four-
quarter collection period based on estimated uninsured deposits reported by all IDIs as of December 31, 2022,
and collect the remaining special assessments for an additional four quarter collection period based on an
updated estimate of losses pursuant to the systemic risk determination and estimated uninsured deposits
reported by all IDIs as of December 31, 2023. Under this alternative, for the initial four-quarter collection period
the special assessment would be allocated to all IDIs based on each IDI or banking organization’s estimated
uninsured deposits as a share of estimated uninsured deposits reported by all IDIs as of December 31, 2022, as a
proxy for the amount of uninsured deposits in each institution at the time the determination of systemic risk
was made and uninsured depositors of the failed institutions were protected. Such methodology would allocate
the special assessments to the institutions that had the largest amounts of uninsured deposits at the time of the
determination of systemic risk. The remaining special assessments would be based on an updated estimate of
losses as of December 31, 2023, and would be allocated to IDIs with total assets of $1 billion or more, based on
each IDI or banking organization’s estimated uninsured deposits as a share of estimated uninsured deposits
reported by all IDIs as of December 31, 2023, in order to reflect amounts of uninsured deposits that did not run
off following the determination of systemic risk. This alternative could incentivize IDIs to reduce their amount of
uninsured deposits ahead of the December 31, 2023 reporting date, which may result in unintended market
dislocations and reduced liquidity in the banking sector. This alternative may also change the timing of accrual
30 IDIs with less than $1 billion in total assets as of June 30, 2021, were not required to report the estimated
amount of uninsured deposits on the Call Report for December 31, 2022
insured deposits ahead of the December 31, 2023 reporting date, which may result in unintended market
dislocations and reduced liquidity in the banking sector. This alternative may also change the timing of accrual
30 IDIs with less than $1 billion in total assets as of June 30, 2021, were not required to report the estimated
amount of uninsured deposits on the Call Report for December 31, 2022. Therefore, for IDIs that had less than $1
billion in total assets as of June 30, 2021, the amount and share of estimated uninsured deposits as of December
31, 2022, would be zero.
31 IDIs with less than $1 billion in total assets as of June 30, 2021, were not required to report the estimated
amount of uninsured deposits on the Call Report for December 31, 2022. Therefore, for IDIs that had less than $1
billion in total assets as of June 30, 2021, the amount and share of estimated uninsured deposits as of December
31, 2022, would be zero.
MEMO
12

of the contingent liability by banks. In contrast, the proposal’s allocation methodology based on amounts of
uninsured deposits as of December 31, 2022, would result in transparent and consistent payments, and a more
simplified framework for calculating special assessments.
A final alternative would be to apply a special assessment rate to an institution’s regular quarterly
deposit insurance assessment base (regular assessment base) for that quarter, with or without applying a $5
billion deduction at the banking organization level
r 31, 2022, would result in transparent and consistent payments, and a more
simplified framework for calculating special assessments.
A final alternative would be to apply a special assessment rate to an institution’s regular quarterly
deposit insurance assessment base (regular assessment base) for that quarter, with or without applying a $5
billion deduction at the banking organization level. Generally, an IDI’s assessment base equals its average
consolidated total assets minus its average tangible equity.32 Under this alternative, staff estimate that the FDIC
would need to charge an annual assessment rate of 3.76 basis points over two years to recover estimated losses
without the $5 billion deduction, or 4.57 basis points with the $5 billion deduction; however, a significantly
larger number of banking organizations would be subject to the special assessments relative to the proposal.
Under this alternative, the IDIs with the largest assessment base would pay the greatest amount of special
assessments. IDIs for which certain assets are excluded in the calculation of the regular assessment base would
pay lower special assessments due to their smaller assessment base. This alternative would result in smaller IDIs
and banking organizations, regardless of reliance on uninsured deposits for funding, paying potentially
significant amounts of special assessments. Further, IDIs engaged in trust activities, or with fiduciary and
custody and safekeeping assets, and for which certain assets are excluded from their regular assessment base,
would pay lower amounts of special assessments due to these exclusions, despite holding significant amounts
of uninsured deposits
nsured deposits for funding, paying potentially
significant amounts of special assessments. Further, IDIs engaged in trust activities, or with fiduciary and
custody and safekeeping assets, and for which certain assets are excluded from their regular assessment base,
would pay lower amounts of special assessments due to these exclusions, despite holding significant amounts
of uninsured deposits.
In staff’s view, the proposal reflects an appropriate balancing of the goal of applying special
assessments to the types of entities that benefited the most from the protection of uninsured depositors
provided under the determination of systemic risk while ensuring equitable, transparent, and consistent
treatment based on amounts of uninsured deposits at the time of the determination of systemic risk. The
proposal also allows for payments to be collected over an extended period of time in order to mitigate the
liquidity effects of the special assessments by requiring smaller, consistent quarterly payments. On balance, in
staff’s view, the proposal best promotes maintenance of liquidity, which will allow institutions to absorb any
potential unexpected setbacks while continuing to meet the credit needs of the U.S. economy.
COMMENT PERIOD, EFFECTIVE DATE, AND APPLICATION DATE
Staff recommend issuing this proposal with a 60-day comment period. Following the comment period,
staff expect that a final rule would be issued with an effective date of January 1, 2024. The special assessment
would be collected beginning with the first quarterly assessment period of 2024 (i.e., January 1 through March
31, 2024, with an invoice payment date of June 28, 2024), and would continue to be collected for an anticipated
total of eight quarterly assessment periods
comment period,
staff expect that a final rule would be issued with an effective date of January 1, 2024. The special assessment
would be collected beginning with the first quarterly assessment period of 2024 (i.e., January 1 through March
31, 2024, with an invoice payment date of June 28, 2024), and would continue to be collected for an anticipated
total of eight quarterly assessment periods. Because the estimated loss pursuant to the systemic risk
determination will be periodically adjusted, the FDIC would retain the ability to cease collection early, impose
an extended special assessment collection period after the initial eight-quarter collection period to collect the
32 See 12 CFR 327.5.
MEMO
13

difference between losses and the amounts collected, and impose a final shortfall special assessment after both
receiverships terminate.
Staff contacts:
DIR
Michael Spencer
Associate Director, Financial Risk Management
(202) 898-7041
Kayla Shoemaker
Acting Chief, Banking and Regulatory Policy
(202) 898-6962
Legal
Sheikha Kapoor
Senior Counsel
(202)898-3960
Ryan McCarthy
Counsel
(202) 898-7301
MEMO
14

## Nearby sections

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- [FDIC FIL-1-2024 Consolidated Reports of Condition and Income for Fourth Quarter 2023](https://www.frixlaw.com/law-library/statutes/FDIC_FIL24001.md)
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- [FDIC FIL-4-2025 FDIC Statement of Policy on Bank Merger Transactions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL25004.md)
- [FDIC FIL-5-2000 Consumer Credit Reporting Practices](https://www.frixlaw.com/law-library/statutes/FDIC_FIL00005.md)
- [FDIC FIL-5-2003 LETTER TO STAKEHOLDERS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL03005.md)
- [FDIC FIL-5-2021 Frequently Asked Questions Regarding Suspicious Activity Reporting and Other Anti-Money Laundering (AML) Considerations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21005.md)
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---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL23024. Check the current official text before relying on it. Not legal advice.