WASHINGTON — On the eve of a crucial meeting, large banks stepped up their opposition to the Federal Deposit Insurance Corp.'s expected plan to charge a special premium based on assets, arguing that the plan penalizes them though they are not responsible for the agency's losses.

The Clearing House, a coalition of some of the country's largest banks, told the agency in a letter that such a premium is a "highly inappropriate" departure from the traditional deposit-based assessment. The FDIC board is to meet today to complete the plan.

"The premise behind this argument — specifically, that the strain on the [Deposit Insurance Fund, or DIF] has resulted from the failure of large institutions — is, without question, fundamentally flawed," Norman R. Nelson, the Clearing House's general counsel, wrote Thursday.

The group may find support from at least one FDIC board member — Comptroller of the Currency John Dugan — according to sources. They said Dugan may not agree with charging banks based on their assets, since the FDIC insures deposits.

Though it remains possible one other board member could also oppose the plan, FDIC Chairman Sheila Bair is thought to have enough votes to approve it.

Though several large-bank representatives have privately expressed outrage over the FDIC's plan, the Clearing House letter is the first public opposition to the plan. The Clearing House represents ABN Amro Bank, Bank of America, Bank of New York Mellon, Citigroup's Citibank, Deutsche Bank, HSBC Bank, JPMorgan Chase, UBS, U.S. Bancorp's U.S. Bank and Wells Fargo.

In the letter, the group pointed to the dozens of small-bank failures that have cost the agency in the last 18 months; said the FDIC's mission is to insure deposits, not assets; and accused the agency of violating due process by abruptly switching its calculation method without first putting it out for comment.

"Given the significant impact of such a change, we submit that fundamental principles of fairness require that all interested parties be permitted to present meaningful comment on a specific, detailed proposal," Nelson wrote.

The agency is expected to complete action today on a one-time premium of about 5 to 7 cents per $100 of second-quarter assets, less Tier 1 capital. Institutions with large asset portfolios will be able to cap their premium at 10 basis points per deposits, according to sources.

The action, which many speculated about this week, would be a significant change from the agency's interim rule in February, a proposal by the FDIC to charge a 20-basis-point premium on deposits to replenish its insurance fund.

Though the final assessment will be much lower than the proposal, thanks to legislation increasing the FDIC's borrowing limit, several large institutions have objected to the switch to an asset-based premium, which would require them to contribute a larger share of the FDIC's revenue.

Community bank advocates, meanwhile, have hailed the expected reform, saying it will rightly ease the burden for small banks with high deposit proportions. Other bankers have stayed neutral, recognizing that institutions of all sizes — with various asset-to-deposit structures — could both win and lose from the plan.

Nelson said the expected action came after comment letters to the FDIC saying the DIF's losses are due to problems caused by large banks and an asset-based premium would be fairer. But he noted that only one of the institutions to fail since January 2008 — $307 billion-asset Washington Mutual Bank — had more than $50 billion of assets.

"The average asset size of the other 57 institutions that failed … is $1.5 billion, and it is the failure of those 57 smaller institutions that directly caused the depletion of the DIF that the FDIC now seeks to correct," Nelson wrote. "These data demonstrate that large financial institutions have not created a strain on the DIF."

Nelson said a "sudden shift away from the long-standing practice of imposing DIF assessments on the basis of deposits cannot be justified by a need to make large institutions pay their 'fair share' by disproportionately allocating the burden of the special assessment to them."

Karen Thomas, the director of government relations at the Independent Community Bankers of America, which supports the FDIC's plan, said in an interview that large banks will get the price they deserve under the plan, considering the ample funds they have received through the federal government's bailout program.

"The banks that are objecting to the broader assessment base are the very banks that have received hundreds of billions in taxpayer support," she said, "and yet they want to saddle community banks with more than their fair share of the special assessment."

She added that failures have risen because of the market tumult caused by large institutions. "The bank failures are up because the irresponsible practices of the largest institutions have destabilized our economy," she said.

In the letter, Nelson said the plan would be out of line with the FDIC's core mission, which is to insure consumer deposits.

"Risk to the DIF arises from insured deposits, not assets, and the greater proportion of assets to deposits of large institutions relative to smaller institutions does not increase this risk," he wrote.

The assessment may persuade institutions to move some assets off their balance sheets, he added.

"Such action by the FDIC may give financial institutions a perverse incentive to shrink assets on their balance sheets and move those assets into nonbank entities, with the result that such assets would no longer be available to provide a cushion in the event of a failure and thereby prevent a loss to the DIF," Nelson wrote.

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