The Federal Deposit Insurance Corp. will hold a hearing March 17 on its plan to cut bank premiums 83% while holding thrift rates at historic highs.
The agency posed 15 questions on which the FDIC is seeking comment. Requests to testify are due by the close of business March 8. They may be mailed, faxed, or delivered to Room F-400, 550 17th Street NW, Washington, D.C. 20429. The fax number is 202-898-3838.
Witnesses also must mail or deliver to the FDIC a written copy of their statement - plus a short summary - by March 14.
For more information on how to testify, call the FDIC at 202-898-6757.
As is the usual course with proposed rulemakings, the FDIC also is accepting written comments until April 17.
For complete copies of the bank and thrift premium proposals, see the Feb. 16 Federal Register. Here are the questions posed by the FDIC:
1. What is the proper reading of the legal requirement that the FDIC "set assessments . . . to maintain the reserve ratio at the designated reserve ratio" of $1.25 for every $100 of insured deposits?
2. Is it permissible for the reserve ratio to exceed the required 1.25% ratio as a result of investment income from risk-based assessments?
3. Does the FDIC have the legal authority to "rebate" assessment income to BIF-insured institutions when the BIF balance remains above the 1.25% ratio?
4. Does the FDIC have the legal authority to take into account a potential premium differential between BIF and SAIF members in setting BIF assessment rates?
5. Is the proposed assessment schedule of 4 to 31 basis points appropriate?
6. Is the proposed increase in the assessment spreads between the nine risk categories appropriate?
7. Is the proposed process appropriate for applying the new premiums the first time the 1.25% ratio is achieved?
8. Is it appropriate, as proposed, to raise or lower within a specified range the entire rate schedule without first seeking public comment? If so, is the proposed range of 5 basis points appropriate for this adjustment?
The FDIC's concerns regarding its proposal to hold thrift premiums at an average of 24 cents per $100 of domestic deposits are:
9. What would be the effect on SAIF members of the premium differential between BIF and SAIF rates when BIF rates are lowered?
10. Does the FDIC have the legal authority to take into account a potential premium differential between BIF and SAIF members?
11. Should SAIF rates be lowered, as permitted by law, to an average of 18 cents per $100 of domestic deposits when BIF rates are lowered?
12. Should the current spread of 8 basis points between the highest and lowest SAIF rates be maintained or widened?
13. What would be the impact of lowering SAIF rates on the capitalization of the SAIF?
14. To what extent would shrinkage in the assessment base for the SAIF affect: (i) the rate at which the SAIF capitalizes and (ii) the availability of assessments to meet payments on Financing Corp. bonds?
15. Does the FDIC have the legal authority to set SAIF assessment rates to assure sufficient revenues for the Financing Corp. to meet debt service obligations on the Fico bonds?
