F.D.I.C. Approves New Rules to Replenish Insurance Fund
By THE ASSOCIATED PRESS – NYTimes.com
Published: May 22, 2009WASHINGTON (AP) — Federal regulators on Friday adopted a new system of special fees paid by financial institutions that will shift more of the burden to bigger banks to help replenish the deposit insurance fund.
The Federal Deposit Insurance Corporation’s board voted 4-1 to approve the new fees. It is intended to raise $5.6 billion in the face of a cascade of bank failures that have depleted the insurance fund. The lone dissent came from the Comptroller of the Currency, John C. Dugan, whose agency regulates national banks.
The F.D.I.C. now expects bank failures will cost the fund around $70 billion through 2013, up from a previous assessment of around $65 billion.
“There will be some shifting of the burden” to major banks, the F.D.I.C. chairwoman, Sheila C. Bair, said. “The shift is not huge to them. We’re asking them to pay more.”
The seizure Thursday of the struggling BankUnited FSB in Florida is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was last year’s seizure of the California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion. C BankUnited FSB, based in oral Gables, Fla., was the 34th federally insured institution to be closed this year.
F.D.I.C. Approves New Fees to Replenish Insurance Fund – NYTimes.com.
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