Community Banks Could Get $500 Million Back From the FDIC
Proposed changes to federal deposit insurance assessments could translate to significant savings for community banks. A recent analysis by the Federal Reserve Bank of Kansas City looks at those changes, proposed by the Federal Deposit Insurance Corp. (FDIC). The Fed estimates established community banking organizations (CBOs) are now paying around $1.6 billion each year in FDIC assessments. The…
Community banks could potentially recover $500 million annually from the Federal Deposit Insurance Corporation (FDIC) under proposed changes to deposit insurance assessments. According to the Federal Reserve Bank of Kansas City, community banking organizations (CBOs) currently pay around $1.6 billion each year in FDIC assessments.
CBOs are defined as commercial banks with assets under $10 billion. Under the proposed changes, the initial base assessment rates would be reduced by 2 basis points, lowering the $1.6 billion figure to approximately $1.1 billion. This would free up roughly $500 million each year for community banks to allocate toward other strategic priorities, such as technology investments and expanded lending capacity.
The proposal also increases the asset threshold for small institutions from $10 billion to $30 billion.
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