The FDIC approved a final rule that requires insured institutions to prepay slightly more than three years of estimated insurance assessments. The regulator said this will strengthen the cash position of the Deposit Insurance Fund (DIF) without immediately hurting bank earnings.


Payment of the prepaid assessment, along with the payment of institutions’ regular third quarter assessment, was due on Dec. 30, 2009. The FDIC estimated it would collect approximately $45 billion from total prepaid assessments. The payments will come from the industry’s liquid reserve balances, which on June 30, 2009, totaled more than $1.3 trillion, a 22% increase over the previous year.


Unlike a special assessment, which the FDIC collected on Sept. 30, this prepayment will not immediately affect bank earnings. Banks will book the payments at the end of each quarter. While the prepayment will immediately improve the FDIC’s liquidity, it will not affect the DIF balance.


FDIC Chairman Sheila Bair said, “the public should know that the discussions over the past several months have never been about the FDIC’s ability to fulfill its commitment to depositors, but rather how that would be done. The FDIC’s commitment to depositors is absolute, and we and the industry have more than enough resources to make good on that commitment. No depositor has ever lost a penny of an insured deposit, and no depositor ever will.”


The final rule is available at


  Federal bank and thrift regulators issued a final rule, providing that mortgage loans modified under the Treasury Department’s Home Affordable Mortgage Program (HAMP) will generally retain their risk weights applicable prior to modification.


The agencies adopted as final their interim final rule issued on June 30, 2009, with one modification. The final rule clarifies that mortgage loans whose HAMP modifications are in the trial period, and not yet permanent, qualify for the risk-based capital treatment contained in the rule.


The final rule, issued jointly by the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision, is available at


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