The Federal Deposit Insurance Corp. raised deposit insurance fees Friday on banks and thrifts, including levying a one-time “emergency” fee.
The move isn’t sitting well with bankers locally and nationally.
“I am more than willing to pay my fair share. I just don’t want to pay everyone else’s too,” said Fred Bauer, president of Farmers Bank in Ault.
Bauer estimates his small rural bank will see the amount it pays in insurance premiums each month double or triple through no fault of its own.
Last year, 25 FDIC-insured institutions with assets of $372 billion failed, the most since 1993, when 41 institutions with assets of $3.8 billion failed.
The fund, which steps in to protect depositors when an institution fails, has shrunk from $52.4 billion in March 2008 to $18.9 billion at the end of last year.
As the insurance fund shrank, the amount of deposits it insured rose from $4.3 trillion to $4.7 trillion last year.
To restore the fund, the FDIC will charge a one-time fee of 20 cents per $100 in deposits on June 30, with the right to impose another 10-cent fee per $100 in deposits later.
Besides the one-time assessment, the FDIC will raise the assessment cap charged the healthiest banks from 14 cents per $100 of deposits to 16 cents starting April 1.
“Deposit insurance remains a good value,” FDIC chairman Sheila Bair said in a statement. “Public confidence in the FDIC guarantee has helped assure a stable source of funding for banks in these troubled times.”
But Camden Fine, president and chief executive of the Independent Community Bankers of America, noted that in a case of the good being punished and the bad rewarded, the fee hike came on the same day Citgroup received its third federal bailout.
The FDIC reported 252 banks and thrifts in trouble at the end of 2008, up from 171 in the third quarter.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
