Community Banks Not Likely to Bear Brunt of FDIC's Special Assessments
Financial Services attorney Paul Aguggia spoke with S&P Global Market Intelligence about how special assessments to replenish the Deposit Insurance Fund (DIF) will affect community banks. Resolving Silicon Valley Bank will cost the Federal Deposit Insurance Corporation (FDIC) an estimated $22.5 billion, which will pull from the DIF. To make up for the loss, the FDIC will impose special assessments, in addition to the already-imposed increase in the deposit assessment rate. Community banks have expressed concern about the assessment, and the FDIC is reportedly leaning toward having larger banks shoulder more of the burden. Mr. Aguggia explained that the FDIC could take a different approach that examines factors other than size when deciding how much banks should pay.
"There does seem to be some political push to maybe evaluate the risk profiles of different banks, which would be a much heavier lift," he said. "How do you know what tests you would use to evaluate the different profiles of different banks?"