FDIC To Slap Banks With New Fees To Cover Bailout Losses: REPORT

The Federal Deposit Insurance Corporation (FDIC) plans to release a proposal to replenish funds spent bailing out depositors of Silicon Valley Bank (SVB) and Signature Bank in March by charging fees to banks with over $10 billion in assets, according to people familiar with the matter who spoke to Bloomberg.

The smallest lenders with under $10 billion in assets would be exempt from these fees, according to the sources who spoke to Bloomberg. There were over 4,000 banks beneath that threshold at the end of 2022; however, there were 145 banks between $10 billion and $250 billion in assets, according to FDIC data.

The Deposit Insurance Fund, which the FDIC uses to cover depositors, was depleted by an estimated $22.5 billion when combining the bailouts of SVB and Signature, according to a statement by FDIC Chairman Martin J. Gruenberg. The FDIC estimated that roughly $19.2 billion of that total was attributable to the cost of covering uninsured deposits due to fears that the banks’ failures posed systemic risks to the financial sector.

Certain banks with up to $50 billion in assets may also evade the fees depending on the size of their deposit portfolio, according to two of the sources who spoke to Bloomberg. They can be paid all at once or over two years.

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