FDIC Set To Hit Big Lenders With Fees To Refill Deposit Insurance Fund: Report

The U.S. is reportedly set to exempt smaller banks from kicking in extra money to refill the government's deposit insurance fund and instead saddle the biggest lenders with bulk of the bill.

What Happened: The Federal Deposit Insurance Corporation is likely to release a highly anticipated proposal for refilling its Deposit Insurance Fund (DIF) as early as next week, reported Bloomberg, citing people familiar with the matter. The fund was partly depleted by the failures of Silicon Valley Bank and Signature Bank.

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The Plan: Smaller lenders with assets below $10 billion wouldn't have to pay, the report said, citing the sources. There were over 4,000 institutions under that threshold at the end of last year, FDIC data showed, according to the report.

Based on the size of their deposit portfolio, some lenders with as much as $50 billion in assets could also avoid the payments that might be spread out over two years or paid at once. Under the plan, bigger lenders would all have the same fee structure, but could end up having to shell out more money because of balance sheet size and number of depositors, the report said.

Fee Burden: FDIC chairman Martin Gruenberg said he would give special consideration to the fee burden on smaller lenders.

The fees, known as a special assessment, won't cover the estimated $13 billion in losses from the failure of First Republic Bank, the report said, citing the sources. That impact to the fund will be addressed via the quarterly fees that lenders put into the fund.

The agency is also set to announce changes to the regular quarterly fees that lenders have to pay into the DIF, as the fund is known. That plan will help soften any impact from the First Republic to the DIF.

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