Management problems could force as many as 333 banks and thrifts to pay more for deposit insurance next year.
In an interview Monday, Federal Deposit Insurance Corp. Chairman Donna A. Tanoue said that 333 institutions have overall supervisory ratings of 1 or 2 but management ratings of 3 or worse, and thus might qualify as risky "outliers" that should pay more for the government's backing.
"We're looking at whether there are any banks or thrifts ... that might warrant a rise or increase in their premiums based on their banking practices," she said.
Most of these institutions are branded 1-A, the top rating in the nine- box matrix the FDIC uses to decide how much each institution is charged.
If the proposal goes through, some institutions currently paying nothing might end up paying 3 cents per $100 in insured deposits. Others already paying that rate might see their premiums rise to 10 cents for every $100 in insured deposits.
"If we were to use this kind of screen, each of those institutions would receive a closer look from its primary regulator," Ms. Tanoue said. The FDIC would then consult with the bank's examiner-in-charge and decide whether risk-taking and management style warranted a higher insurance premium.
The change would help address a perceived problem in the risk-based premium system. Many observers inside and outside the FDIC are concerned that only 5% of banks and thrifts are paying for deposit insurance, even though underwriting standards are said to be declining and the economy is slowing.
Ms. Tanoue said the increases could be implemented as early as May when second-half assessments are mailed.
The agency has not ruled out other changes. Arthur J. Murton, director of the FDIC's insurance division, said the agency could also target institutions with Camels ratings of 1 or 2 but an asset quality grade of 3, for example. (Regulatory ratings range from 1 to 5, with 1 being the best).
Ms. Tanoue emphasized that potential changes will be negotiated with the other banking agencies. FDIC staff have met separately with staff from the Office of the Comptroller of the Currency and the Office of Thrift Supervision. A meeting of officials from the three agencies and the Federal Reserve Board is in the works.
How much input individual banks will have is unclear, Ms. Tanoue said. But FDIC staff members are already in contact with the American Bankers Association.
Ms. Tanoue is also discussing the agency's progress in public forums, such as a speech today to the annual convention of America's Community Bankers in Chicago.
