FDIC Cuts Fees for Transfer of Thrift Deposits

WASHINGTON -- The Federal Deposit Insurance Corp. made it cheaper for banks to buy thrift deposits Tuesday by reducing the fee it charges for transferring S&L funds to the Bank Insurance Fund.

The thrift bailout law, in order to keep money in the Savings Association Insurance Fund, imposed a fee for transferring deposits from one fund to another. The fee is calculated by multiplying the amount of deposits being transferred by the BIF's reserve ratio -- or how much money the agency has reserved to cover each $100 of deposits.

Even though BIF is dwindling, the reserve ratio has stayed the same because the FDIC originally expected resetting it every year. Yesterday, however, the FDIC decided to revise the reserve ratio every quarter to better reflect the size of the fund.

For example, under the old rule, if a bank wants to bring $1 million of thrift deposits into the fund, then the FDIC would multiply $1 million times 70 basis points because that was the fund's reserve ratio at year end 1989. The fee would be $7,000.

Under the new rule, the fee would be $2,800 because the BIF's reserve ratio as of March 31 had sunk to 28 basis points.

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