hold deposit insurance assessment rates steady through the first half of 2000.

The current rates of 0 to 27 cents per $100 of insured deposits have been in place since 1995 for banks and since 1996 for thrifts.

As a result, roughly 94% of banks and 92% of thrifts will continue to get free deposit insurance coverage.

FDIC staff members said a rate hike was unnecessary because the insurance funds are flush. As of June 30, the Bank Insurance Fund had $1.40 in reserve for every $100 insured, versus a legal minimum of $1.25. The Savings Association Insurance Fund had $1.29 and will reach about $1.43 this year when a separate reserve of nearly $1 billion is folded back into it.

However, FDIC Chairman Donna Tanoue has said she wants to increase premiums on some of the riskier institutions not currently paying premiums. These increases would not take effect until the second half of next year.

For the first time since 1991, the bank fund may lose money in 1999. "I wouldn't want to commit to a forecast, but it could be very close," said Fred S. Carns, associate insurance director at the FDIC. The key reason is the failure of $1.1 billion-asset First National Bank of Keystone, W.Va., which is projected to cost the fund $750 million to $850 million. -- Scott Barancik and Rob Garver

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