WASHINGTON - The Federal Deposit Insurance Corp. has been quietly warning trade groups that it could start charging banks premiums again by yearend - in part because of fast-growing accounts at large firms such as Merrill Lynch & Co., industry sources said Wednesday.

Those sources said that FDIC officials have told them the ratio of federal reserves to insured deposits in the Bank Insurance Fund could fall below the statutory minimum of 1.25%, which by law could force banks to pay more than $1 billion of premiums - the first such payments in nearly five years.

"We've been told by FDIC staff that it is a distinct possibility the Bank Insurance Fund could go under 1.25%," said Robert Davis, managing director of government relations at America's Community Bankers. "In some scenarios, that could occur by the end of the year. The FDIC has made no public statement, but obviously if bank failures occur along a certain track and high deposit growth continues, you can get nearer-term situations of hitting 1.25%."

Art Murton, director of the FDIC's division of insurance, denied the reports and said he does not expect the reserve fund to drop below the statutory minimum by yearend. He said the agency sticks by its November 2000 forecast that the reserve ratio, which was 1.36% at Sept. 30, would finish between 1.27% and 1.37% during the first half of this year.

"You can never rule anything out, but at this point, our best estimate is that the reserve ratio would not have fallen below 1.25% by then," he said. "We have not been telling the trade groups that we expect raising premiums by the end of the year."

Edward L. Yingling, chief lobbyist for the American Bankers Association, said ABA officials heard a similar rumor two weeks ago and dismissed it after speaking with FDIC officials.

"I don't think it is true," Mr. Yingling said. "While the issue of rapid growth of deposits is a serious one, I don't think the people at the FDIC have a projection that" the reserve ratio falling below 1.25% "is a reasonable possibility."

The ABA' and FDIC' both expect the ratio to stay above the minimum this year, though unexpected events - such as a major bank failure - could change that, he said.

At least one independent firm predicts otherwise.

Federal Financial Analytics, a consulting firm here, issued a report last month that said it expects the ratio to fall below the 1.25% minimum by midyear. The report said that regulators are expected to impose a three-basis-point premium as early as July, which would amount to a $1.2 billion charge on the banking industry.

Industry representatives said the FDIC has cited fast-growing and de novo institutions that have added billions of dollars to insured deposits without paying new premiums as one of the key reasons for coverage ratio's dilution. FDIC officials have said in the past that 870 institutions with $44.5 billion of assets have been chartered since 1996.

But the poster children for the issue have become Merrill Lynch, which has moved nearly $50 billion from uninsured accounts into insured deposits at its banks in New Jersey and Utah during the past nine months, and Salomon Smith Barney, a Citigroup Inc. unit that started moving money from uninsured accounts to insured deposits last month.

Federal Financial Analytics raised similar issues in its report, which said that "independent analysis of industry trends and on private statements from senior regulators, who share this expectation," prompted its estimate.

The report cited several reasons for the coverage ratio's dilution, including a rise in the aggregate size of troubled institutions as reported by the FDIC and the "prospect for significant increases in the domestic insured deposit base as the result of large transfers into Merrill Lynch, Salomon, and other bank affiliates."

A Merrill Lynch spokesman said Wednesday that it has done nothing wrong and has paid deposit insurance premiums in the past.

"We regret any suggestion that the FDIC insurance fund should be used, in effect, to stifle innovation to the detriment of consumers and to protect entrenched competitors," he said.

Karen Shaw Petrou, managing partner of Federal Financial Analytics, said that if the influx of new monies helped dilute the fund ratio below the minimum it would spark considerable momentum for deposit insurance reform. Many trade groups have complained that Merrill has not paid a penny of new premiums since adding the deposits but that its actions could force the entire banking industry to pay once more.

"It is one thing to have free riders; it is another thing when everyone else is paying for their ticket," Ms. Petrou said. "If banks pay again, it will force a broader debate of the structure of the deposit insurance system."

Kenneth A. Guenther, executive vice president of the Independent Community Bankers of America, said that just the threat that banks may be forced to pay premiums again because of fast-growing institutions is enough to build support in Congress for reform.

"It will be driven by the fact that we are looking at the breaching of 1.25% possibly within the next six months by inflows from Merrill and the rest," Mr. Guenther said. "Bankers will demand that this very unfair issue be looked at."

Former FDIC Chairman L. William Seidman said that it ultimately does not matter when the FDIC predicts the crucial drop in the bank reserve fund to occur because it is bound to happen at some point soon.

"If it does not happen by the end of the year, it will happen soon," Mr. Seidman said. "Everybody believes it will happen in the near term. If this practice by investment bankers continues to grow, and I think it will because it will become a competitive necessity, then the ratio will drop and drop fast."

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