Deposit Insurance Fund Reserve exceeds The Minimum – I Smell Refund!
FIL-78-2018 was issued today and could have some very good news for bankers. During the Great Recession the Deposit Insurance Fund (DIF) was depleted and under the Dodd-Frank Wall Street Reform and Consumer Protection Act was required to attain a minimum of 1.35%. At September 30, 2018 the DIF reached 1.36% which triggers some potentially good news for bankers. The reason for my use of “potentially” is that the credits will be applied when the DIF is at or above 1.38%. It is estimated the fund will reach that at December 31st.
Small community banks will receive credits for the portion of their assessments that contributed to growth in the reserve ratio between 1.15 percent and 1.35 percent and he FDIC estimates the aggregate amount of credits to be approximately $750 million. The FDIC plans to notify each small bank of its individual credit amount in January 2019 through FDICconnect. These credits automatically will be applied each quarter that the reserve ratio is at least 1.38 percent, up to the full amount of a small bank’s credit or assessment, whichever is less.
So as the famous Doritos commercial would say, “I smell refund!!!”
Neil is a principal in our banking practice. He has more than 25 years of experience in the banking industry, which includes nine years in the private sector. His private industry experiences range from cashier to chief financial officer; however, his strengths are in both the operations and lending areas of community banks. Neil has led some of the firm’s largest bank external and internal audit and FDICIA engagements. Neil also assists clients with other projects such as merger and acquisition transactions and capital planning.
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