[Federal Register Volume 59, Number 111 (Friday, June 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13368]


[[Page Unknown]]

[Federal Register: June 10, 1994]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 304 and 327

RIN 3064-AB45

 

Assessments; Forms, Instructions, and Reports

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Board of Directors (Board) of the Federal Deposit 
Insurance Corporation (FDIC) is proposing to amend its regulation on 
assessments to provide for the quarterly collection of assessments by 
means of FDIC-originated direct debits through the Automated Clearing 
House (ACH) network, based on invoices prepared by the FDIC using data 
reported by insured institutions in their quarterly reports of 
condition. The FDIC believes that the proposed amendments would result 
in a more efficient collection process, to the benefit of the deposit 
insurance funds and insured institutions, and would reduce the 
regulatory burden on insured institutions. The Board is further 
proposing to amend the assessments regulation to clarify the obligation 
of acquiring institutions to pay assessments on deposits assumed from 
institutions terminating their insured status; to delete from the 
assessments regulation the existing references to experience factors, 
which are not available for use after 1994; and to include such 
amendments to the FDIC's regulation on forms as are necessitated by the 
proposed changes to the assessments regulation.

DATES: Written comments must be received by the FDIC on or before 
August 9, 1994.

ADDRESSES: Written comments shall be addressed to the Office of the 
Executive Secretary, Federal Deposit Insurance Corporation, 550--17th 
Street, NW., Washington, DC 20429. Comments may be hand-delivered to 
room F-400, 1776 F Street, NW., Washington, DC 20429, on business days 
between 8:30 a.m. and 5 p.m. (FAX number: (202) 898-3838). Comments 
will be available for inspection in room 7118, 550--17th Street, NW., 
Washington, DC, between 9 a.m. and 4:30 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Connie Brindle, Chief, Assessment 
Operations Section, Division of Finance, (703) 516-5553, or Martha 
Coulter, Counsel, (202) 898-7348, regarding the collection improvement 
proposal; William Farrell, Chief, Assessment Management Section, 
Division of Finance, (703) 516-5546, or Jules Bernard, Counsel, (202) 
898-3731, regarding assessment obligations of acquiring institutions; 
Federal Deposit Insurance Corporation, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Collection Improvement Proposal

A. Existing Statutory and Regulatory Provisions

    Section 7(c) of the Federal Deposit Insurance Act (FDI Act), 12 
U.S.C. 1817(c), requires that each insured depository institution pay a 
semiannual assessment to the FDIC. Payment of the assessment is to be 
made in the manner and at the time(s) prescribed by the Board. Each 
institution is to file a certified statement in such form and 
containing such information as the FDIC requires. An officer of the 
institution must certify that the statement is true, correct, and 
complete, and in accordance with the statute and related regulations.
    At present, the FDIC's assessment regulations, which are based on a 
prior version of section 7 of the FDI Act, require the payment of 
assessments twice a year. The amount of the semiannual payment is 
computed by the institution. The computation, and the resulting 
assessment amount, is shown on the certified statement filed by the 
institution, which is accompanied by a check for the full amount of the 
assessment. The payment must be postmarked no later than January 31 for 
the first semiannual period of the year (January through June), and 
July 31 for the second semiannual period (July through December).

B. Purpose of the Proposal

    The FDIC believes that the existing assessment collection process 
can be improved substantially by utilizing an electronic payment 
process, to the benefit of insured depository institutions and the 
federal deposit insurance funds. Because the existing process is paper-
based, it is more time consuming and less efficient--both for insured 
institutions and for the FDIC--than an improved collection process 
making fuller use of advanced payment technology.
    The proposed rule introduces a more efficient collection process 
using the Automated Clearing House (ACH) network. Funds for assessment 
payments would be directly debited by the FDIC from accounts designated 
by insured depository institutions for that purpose. This procedure 
would substantially improve the efficiency of the collection process, 
in such ways as eliminating paperwork costs and allowing the FDIC to 
monitor assessment receipts electronically.
    In connection with this improvement in the collection process, the 
FDIC believes that it is highly desirable to reduce the regulatory 
burden imposed on insured depository institutions by shifting to the 
FDIC the responsibility of computing each institution's assessment. To 
facilitate this process, the FDIC is also proposing a move to quarterly 
assessment payments. The FDIC believes that this change would have 
other benefits as well, both for the FDIC and for insured institutions.
    A quarterly-payment schedule is a straightforward means of 
minimizing inefficiencies in the assessment collection process that 
would not be addressed by other elements of the proposal. For example, 
it would simplify the assessment computation by basing each quarterly 
installment on one quarterly report of condition rather than two. It 
would also resolve a timing problem resulting from a statutory 
requirement. Under section 7(a) of the FDI Act, 12 U.S.C. 1817(a), the 
certified statements filed by each institution for a particular 
semiannual assessment period must be based on the two reports of 
condition\1\ to be filed by the institution for the prior semiannual 
period. The report dates set pursuant to section 7(a) are March 31, 
June 30, September 30, and December 31. The June 30 and December 31 
report dates precede by only one day the beginning of the semiannual 
assessment periods for which they provide the basis for assessment 
computation. As a result, the report data needed by the institution for 
its assessment computation are not complete until the beginning of the 
semiannual period, and are not required to be submitted by the 
institution until the end of the first month of the semiannual period. 
If, as under the existing collection process, the payment due date 
falls early within the semiannual period, it is necessary for each 
institution to compute its own assessment, since there is not 
sufficient time before the due date for the FDIC to receive the 
relevant report data from the institution and to prepare and edit an 
assessment statement based on the data. Under the existing collection 
process, any subsequent amendment of the reported data on which the 
assessment is based can potentially--and often does--necessitate 
recalculation of the institution's assessment.
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    \1\For banks, the report of condition is called the Report of 
Income and Condition; for thrift institutions, the Thrift Financial 
Report; and for insured branches of foreign banks, the Report of 
Assets and Liabilities of U.S. Branches and Agencies of Foreign 
Banks.
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    A possible solution to this timing problem would be to move the 
semiannual assessment due date to a later date during the semiannual 
period, for example to the end of the first quarter of the period (that 
is, to March 31 and September 30). This would be preferable to the 
existing system in that it would provide the additional time necessary 
for the FDIC to receive the requisite data from insured institutions 
and to initiate a direct debit for the assessment amount due. However, 
it would not permit other improvements that would result from the 
quarterly-collection proposal, such as simplifying the assessment 
computation, reducing the data-refinement and billing-adjustment 
complications associated with semiannual collection, and eliminating 
the risk of nonpayment for insurance coverage provided for some portion 
of the assessment period in the case of an institution that fails prior 
to the payment due date. Thus, the FDIC believes that the quarterly-
collection proposal is preferable to delayed semiannual collection.
    Under the quarterly-collection proposal, institutions would be 
invoiced for an initial quarterly payment for the first quarter of each 
semiannual assessment period (for example, the period beginning January 
1) approximately one month before the beginning of the period (in this 
example, on November 30), based on the report-of-condition data for the 
first quarter of the preceding semiannual period (in this example, 
September 30). Although the due date for this first quarterly payment 
(December 30) would fall approximately one month earlier than the due 
date for the semiannual payment required under the existing 
regulations, the quarterly payment would be for only a portion (roughly 
one-half, assuming minimal changes in the rate of deposit growth across 
quarters) of the full semiannual assessment amount. The balance of the 
semiannual assessment--based on the report of condition for the last 
day of the second quarter of the prior semiannual period (in the above 
example, December 31)--would be due approximately 3 months into the 
semiannual period (March 30), about two months later than the existing 
single semiannual payment date (January 31).
    Based on FDIC estimates, the proposed quarterly-payment plan should 
not result in a material financial loss either to the FDIC or to 
insured depository institutions.
    It is currently anticipated that, if adopted, the proposal would be 
implemented for the semiannual assessment period beginning July 1, 
1995.

C. Additional Description of the Proposal

1. Quarterly Invoices.
    Under the proposal, the FDIC would provide to each insured 
depository institution a quarterly invoice based on the quarterly 
report of condition most recently due from the institution. In 
addition, the invoice would reflect adjustments from previous quarters, 
such as adjustments resulting from amendments to earlier reports of 
condition or from assessment audits by the FDIC.
    The invoices would be provided no later than 30 days before the due 
date of the quarterly assessment payment. As the following table 
indicates, first-quarter invoices would be distributed by the preceding 
November 30 for the period beginning January 1, and by the preceding 
May 30 for the period beginning July 1. The respective payment 
dates2 for these invoices would be December 30 and June 30. 
Second-quarter invoices would be distributed by February 28 for the 
then-current semiannual period, with a payment (debit) date of March 
30, and by August 30 for the then-current semiannual period, with a 
payment date of September 30.
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    \2\Under the proposal, if a specified payment date falls on a 
day that is not a business day, the payment date becomes the 
previous business day. 

------------------------------------------------------------------------
                                                              Report of 
 Semiannual assessment               Invoice      Payment     condition 
    period covered       Quarter      date          date       used for 
                                                             preparation
------------------------------------------------------------------------
Jan.-June.............          1  Nov. 30      Dec. 30      Sept. 30.  
                                2  Feb. 28      Mar. 30      Dec. 31.   
July-Dec..............          1  May 30       June 30      Mar. 31.   
                                2  Aug. 30      Sept. 30     June 30.   
------------------------------------------------------------------------

    The proposal would eliminate the existing process of averaging the 
two assessment bases derived from the two quarterly reports of 
condition for the preceding semiannual period. Instead, as indicated 
above, each quarterly payment would be based separately on the single 
most recent report of condition. For institutions whose deposits are 
increasing, this change could result in slightly lower payments in 
earlier quarters and higher payments in later quarters, while the 
converse would apply to an institution whose deposits are decreasing. 
On the whole, however, whether on an institution-by-institution or 
industry-wide basis, elimination of averaging is expected to simplify 
the assessment process without having a significant impact on the 
amount of assessments paid.
2. Assessment Computation Review Procedure.
    The assessment-base data reflected on an institution's quarterly 
invoices would be copied from data reported by the institution in its 
reports of condition. Given the source of the data and the mechanical 
nature of the assessment computation, it is anticipated that there 
would be only limited occasion for institutions to disagree with the 
invoices. However, a procedure for resolving any such disagreements is 
included in the proposal.
    The new procedure would apply only to disagreements expressly 
identified in Sec. 327.3(h) of the proposed regulation, such as where 
the institution believes the rate multiplier applied by the FDIC is 
inconsistent with the assessment risk classification assigned to the 
institution for the semiannual period for which the payment is due. The 
new procedure would not apply to disputes regarding the appropriateness 
of the assessment risk classification assigned to the institution; such 
disputes would continue to be covered by the risk classification review 
procedure in the existing regulations.
    Under the proposed new procedure, the period within which an 
institution could file a request for revision of an invoice would 
generally terminate 60 days from the date of the invoice. However, 
where the revision would result from an institution-initiated amendment 
to its report of condition, the filing deadline for the request for 
revision would be 60 days from the date on which such amendment is 
filed. Such amendment of the report of condition would not 
automatically trigger an assessment adjustment. Instead, institutions 
would need to utilize the new procedure to provide notice to the FDIC 
of the requested revision resulting from the amendment.
3. Certified Statements
    Under the proposed rule, institutions would no longer be required 
to compute their assessments. However, pursuant to section 7(c) of the 
FDI Act, each institution would still be required to file a semiannual 
certified statement. For the proposed system, the FDIC would provide a 
certified statement form reflecting both first- and second-quarter 
invoice data. The form would show a semiannual assessment amount based 
on the two quarterly reports of condition on which, by statute, the 
certified statement is to be based. Each institution would be required 
to certify its agreement with the assessment computation shown on the 
form as received from the FDIC or, alternatively, its agreement with 
that computation as amended in a manner specified by the institution.
    In connection with amendment of the assessments regulation, the 
certified-statement element of the proposal includes incidental 
amendments to part 304 of the FDIC's regulations (``Forms, 
Instructions, and Reports'') (12 CFR part 304), for such purposes as 
revising the description of the certified statement forms in 
Sec. 304.3.
4. Designated Deposit Account
    A necessary component of the proposed direct-debit payment system 
is the designation by each insured institution of a deposit account to 
be debited by the FDIC. Under the proposal, each institution would be 
required to give timely notice to the FDIC of the account designated by 
the institution for that purpose. In addition, each institution would 
be required to take any action necessary to enable the FDIC to direct-
debit assessment payments from the account, and to ensure that the 
account has sufficient funds to cover the assessment amount on the FDIC 
invoice. Failure on the part of the institution to take any such action 
or to provide sufficient funding in the designated account would be 
deemed to constitute nonpayment.
5. Semiannual Notice of Assessment Risk Classification
    Under the proposal, the date of the notice of an institution's 
assessment risk classification currently described in Sec. 327.3(e) 
would be changed to coincide with the date of the first-quarterly 
invoice. The FDIC believes that combining the notice and the invoice 
would result in operational efficiencies both for the FDIC and for 
insured depository institutions.
    Comment was requested by the FDIC on a similar operational change 
in connection with an assessment rulemaking proceeding last year. The 
change on which comment was sought at that time was the consolidation 
of the assessment rate notice and the certified statement form in a 
single mailing. A consolidated mailing was supported by each of the six 
comment letters that addressed it. See 58 FR 34357, 34365 (June 25, 
1993).
6. Payment of Interest on Overpayments and Underpayments.
    Under Sec. 327.7 of the existing assessments regulations, the FDIC 
pays interest to insured institutions for any timely overpayments of 
assessments, from the time the assessment is due until the date a 
refund or credit is given for the overpayment amount. Similarly, 
institutions are required to pay interest on underpayments from the 
assessment due date to the date of payment of the shortfall.
    Because of inefficiencies inherent in the existing paper-based 
system, and in the semiannual collection procedure that allows very 
little time for the refinement of report-of-condition data before it is 
used in assessment computations, it typically takes in excess of three 
to five months from the assessment due date to identify, verify, and 
pay or collect overpayment or underpayment amounts resulting from 
miscomputations or similar errors.
    The proposed rule contemplates a ``rolling'' correction process in 
which any necessary adjustments in the assessment amount are made on a 
quarterly basis. Under this proposal, the FDIC would pay or collect 
interest on overpayments and underpayments, respectively, on a full-
quarter basis. Interest would be due for the period beginning the day 
after the payment date on which the institution overpaid or underpaid 
and ending on the payment date for the quarterly invoice reflecting the 
corresponding adjustment. Thus, even if an underpayment were identified 
early in the quarter, the FDIC would not collect the balance due until 
the next quarterly assessment payment date, and would impose interest 
for the entire quarter. The converse would apply to overpayments; that 
is, the amount of the overpayment, together with interest through the 
next assessment payment date, would be credited to the institution on 
the invoice for the next quarterly payment after the overpayment is 
discovered.
    The FDIC believes that this approach would not have a detrimental 
impact on insured institutions. Significantly, approximately 75 percent 
of incorrect assessment payments result from errors made by 
institutions in filling out their certified statement forms. Such 
errors would be virtually eliminated under the proposed procedure. 
Moreover, it is anticipated that any remaining adjustments would be 
processed more quickly, and that institutions would actually pay less 
interest from underpayment errors--and would receive credit for 
overpayments more quickly--than under the existing arrangement.
7. Fail-Safe Payment Plan
    Because the proposed payment procedure relies on computerized 
systems, it seems prudent to provide for a back-up plan to be triggered 
in the event of a system failure or similar but less global 
circumstances. The fail-safe plan incorporated into the proposed rule 
provides that any institution that does not receive its quarterly 
assessment invoice by the beginning of the month in which payment is 
due is to promptly notify the FDIC. It is anticipated that, in most 
cases, the FDIC would provide a duplicate invoice to the institution. 
However, in the event that could not be done, the institution would, as 
a preliminary matter, make its quarterly payment in the amount shown on 
its assessment invoice for the preceding quarter. Any necessary 
adjustments to that payment would be reflected on the next quarterly 
invoice.

II. Mergers Resulting in the Termination of Insured Status

A. Assessment Base Adjustments

    Proposed Sec. 327.6(a) sets forth the rules for computing 
institutions' assessment bases when one institution (a seller) 
transfers its deposits to one or more other institutions (buyers), and 
then goes out of business. Transactions of this kind (transfers) can 
take many forms: they include statutory mergers, consolidations, 
statutory assumptions, and contractual arrangements in which buyers 
purchase assets and assume deposits from a seller. Proposed 
Sec. 327.6(a) would cover all such cases. But it would not cover cases 
where the seller continues to survive (such as cases in which a seller 
only sells some but not all of its branches). Nor would it cover cases 
in which buyers assume deposits from the receivership for a failed 
institution.
    Sometimes the buyers complete a transfer (or related series of 
transfers) in the first quarter of a semiannual period (January through 
March, or July through September). In that case, the buyers assume all 
the seller's deposits before the end of the quarter. The buyers report 
the transferred deposits in their first-quarter reports of condition. 
Under the proposed rule, the second-quarter payments made by the buyers 
would be based (in part) on the transferred deposits.
    But many transfers take place in the second quarter of a semiannual 
period (April through June, or October through December). A seller 
still has deposits at the end of the first quarter, and reports the 
deposits in its first-quarter report of condition. Under the proposed 
quarterly-payment schedule described herein, an institution continuing 
in business would make a second-quarter payment based on these 
deposits, and that payment would represent an installment on the 
assessment for the upcoming semiannual period.
    However, where a seller has gone out of business before the start 
of the upcoming semiannual period, there may be a risk that neither the 
seller nor the buyers would pay any assessments on these deposits under 
the proposed quarterly-payment plan. The buyers would not have included 
these deposits in their first-quarter reports of condition, and would 
not have counted the deposits in their first-quarter assessment bases. 
The net effect could be that neither the seller nor the buyers would 
compensate the FDIC for insuring these deposits.
    Proposed Sec. 327.6(a) would clarify the assessment obligation for 
these transfers. Section 7 of the FDI Act says the FDIC must base an 
institution's assessment on the probability that the appropriate 
deposit insurance fund will incur a loss with respect to the 
institution. Section 7 further specifies that the FDIC must take into 
account the likely amount of any such loss. 12 U.S.C. 1817(b)(1). 
Accordingly, proposed Sec. 327.6(a) would call for the buyers--the 
institutions that would present a continuing insurance risk to the FDIC 
for the deposits--to pay assessments that reflect that risk.
    Proposed Sec. 327.6(a) would achieve this goal by adjusting the 
buyers' assessment bases upward. The proposed rule would call for each 
buyer's assessment base to be increased by that buyer's ``pro rata 
share'' of the seller's first-quarter assessment base: that is, by the 
ratio of the deposits that the buyer assumes from the seller to the 
seller's total quarter-end deposits. The proposed regulation would 
correspondingly reduce the seller's assessment base.3
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    \3\This latter provision may seem superfluous. In virtually all 
such cases the seller would cease to exist before the end of the 
transfer period. Sometimes, however, a related series of transfers 
could extend beyond the end of a semiannual period. In that case, 
the seller would still be in existence at the start of the following 
period. The seller would make a second-quarter payment based on its 
first-quarter assessment base. Absent this latter provision, the 
FDIC would in effect be assessing the same deposits twice.
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    This formula is designed to be relatively simple, and to be 
satisfactory for most cases. A seller generally transfers all its 
deposits at the same time, even when several buyers assume the 
deposits. In a few cases, a seller may transfer its deposits to several 
buyers over an interval: but even then, the interval tends to be short, 
and the seller tends to decline in size (if it changes in size at all). 
The formula would function properly under these conditions.
    But the formula would not, on its own, accommodate cases in which a 
seller's volume of deposits increases between the end of the quarter 
and the date of the transfer. In that event, the buyers would assume 
more deposits than the seller reported in its report of condition. The 
formula would cause the buyers' collective assessment bases to increase 
by an amount greater than the seller's quarter-end assessment base.
    Proposed Sec. 327.6(a) addresses this difficulty by putting a cap 
on the aggregate amount by which the buyers' assessment bases could be 
increased. The FDIC considers that it would be justified in collecting 
an aggregate assessment based on the seller's quarter-end assessment 
base, because the seller itself would pay such an assessment if the 
seller remained in existence. But, by the same token, the FDIC would 
not be justified in collecting an aggregate assessment based on a 
higher amount.
    Nor would the formula, on its own, accommodate more elaborate 
deposit-transfer arrangements. For example, a buyer may be acting 
merely as an intermediary, or a transfer may be only incidental to 
other mergers or deposit-assumptions. In such cases, the formula might 
not accurately reflect the likely amount of the loss that the buyer--or 
the other institutions--ultimately pose to their insurance funds in the 
upcoming period.
    The FDIC does not believe it is possible to foresee all the special 
situations that might arise in complex cases. Proposed Sec. 327.6(a) 
accordingly would give the FDIC a limited flexibility to adjust a 
buyer's or seller's assessment base. The proposed rule would specify 
that the FDIC may use this authority only to bring an institution's 
assessment base into line with the true magnitude of the likely amount 
of the loss that the institution poses for the upcoming quarter--that 
is, with the institution's true deposit-base at the beginning of that 
quarter.
    It must be emphasized that proposed Sec. 327.6(a) would only apply 
to institutions that participate directly in a transfer (or related 
series of such transactions), or that participate in transactions 
directly related to such a transaction (for example, an institution 
that assumes deposits from a buyer). Furthermore, the authority would 
not mean that the FDIC could consider other risk factors--ones 
unrelated to the volume of deposits transferred--in determining the 
likely amount of the loss.

B. Examples

    The following examples apply the proposed rule. For the sake of 
convenience, amounts in the examples are rounded to the nearest 
million.

    Example 1--Partial transfer of deposits; transferor remains in 
business. Institution A reported $100 million worth of deposits in 
its report of condition as of December 31. On January 15, 
Institution B agrees to acquire a branch office of Institution A 
that held $5 million worth of deposits reported in Institution A's 
December 31 report of condition. Institution A continues to be an 
insured institution. Institution A's February 28 assessment invoice 
that will be collected on March 30 will be based on the reported 
$100 million worth of deposits, in accordance with normal 
processing.
    Institution A remains responsible for the assessment liability 
on January 1 based on the December 31 report of condition. The 
February invoice represents the second installment payment of the 
January through June semiannual assessment period. The FDIC expects 
that Institutions A and B may well have dealt with any question of 
allocating the cost of the assessment premium. But Institution A 
must still make the payment to the FDIC.
    Example 2--Partial transfer of deposits; transferor remains in 
business. Institution A reported $100 million worth of deposits in 
its report of condition as of September 30. On October 1, 
Institution B agrees to acquire a branch office of Institution A 
that held $10 million worth of deposits reported in Institution A's 
September 30 report of condition. Institution A continues to be an 
insured institution. Institution A's November 30 assessment invoice 
that will be collected on December 30 will be based on the $100 
million worth of deposits, in accordance with normal processing.
    Institution A remains responsible for the assessment liability 
established on October 1 based on the September 30 report of 
condition. The November invoice represents the first installment 
payment for the next semiannual assessment period (January through 
June). The FDIC expects that Institutions A and B may well have 
dealt with any question of allocating the assessment premium. But 
Institution A must still make the assessment payment to the FDIC.
    Example 3--Transfer of deposits; transferor ceases to exist. 
Institution A reported $100 million worth of deposits in its report 
of condition as of September 30. Its assessment base (deposits less 
deductions) is $90 million. On October 15, Institution A transfers 
all its deposits to Institution B and goes out of business. 
Institution A has only $98 million in deposits at the time of the 
transfer. The FDIC will increase Institution B's September 30 
assessment base to reflect its pro rata share of Institution A's 
assessment base. That is, Institution B's assessment base will be 
increased by $88 million, determined as follows: $98 million 
deposits acquired divided by $100 million deposits reported by 
Institution A on its September 30 report of condition multiplied by 
$90 million assessment base (98/100  x  $90 million), or $88 
million. Institution B would receive credit for any assessment 
payments attributable to the transferred deposits that have already 
been made by Institution A.
    Institution B's payment represents the first installment for the 
January through June assessment period. The FDIC considers that the 
deposits transferred in bulk to Institution B continue to pose a 
risk to the insurance fund. Accordingly, it is appropriate to adjust 
Institution B's assessment base to reflect that risk.
    Example 4--Multiple transfers of deposits; transferor ceases to 
exist. Institution A reported $100 million worth of deposits in its 
report of condition as of September 30; its assessment base is $90 
million. On October 15 it transfers $33 million of its deposits in 
bulk to Institution B. Institution A then shrinks in size from $67 
million to $50 million, and on November 30 transfers all its 
remaining deposits to Institution C. The FDIC will increase the 
September assessment bases of Institutions B and C by $30 million 
and $45 million, respectively. The supporting calculation shows: 
Institution B--$33 million in deposits acquired by Institution B 
divided by $100 million deposits reported by Institution A on the 
September report of condition multiplied by $90 million assessment 
base of Institution A determined from the report of condition based 
on September 30 report of condition; Institution C--$50 million in 
deposits acquired from Institution A divided by $100 million 
deposits reported by Institution A's September report of condition 
multiplied by the $90 million assessment base of Institution A 
determined from its report of condition.
    The FDIC believes that the pro rata methodology presented 
properly reflects the continued risk to the insurance fund presented 
by the deposits transferred in bulk from Institution A to 
Institutions B and C. The insurance fund will bear the cost of 
deposits that are not transferred in bulk.
    Example 5--Multiple transfers of deposits; transferor ceases to 
exist. The circumstances presented in Example 4 remain constant for 
this example, except that the deposits acquired by Institutions B 
and C are $50 million and $60 million, respectively. In this 
situation, the total deposits transferred exceed the deposits 
reported in Institution A's September 30 report of condition. In 
this case, each institution's pro rata share will be determined by 
dividing the acquiring institution's acquired deposits by the total 
deposits transferred in bulk from the disappearing institution in 
that quarter. Thus, the September 30 assessment base of Institution 
B would be increased by $41 million ($50 million deposits acquired 
divided by $110 million total deposits transferred by Institution A 
during that quarter multiplied by the $90 million of Institution A's 
assessment base) and Institution C's September 30 assessment base 
will be increased by $49 million ($60 million deposits acquired 
divided by $110 million total deposits transferred during that 
quarter multiplied by the $90 million assessment base of Institution 
A).
    Example 6--Resolution of a failed institution. Institution A 
reported $100 million worth of deposits in its September 30 report 
of condition. Institution A fails and is placed into receivership 
effective October 1. The resolution of Institution A on October 1 
includes the transfer of all deposits to Institution B. The 
resolution of Institution A has presumptively taken into account the 
assessment amount that would have been invoiced by the FDIC on 
November 30 and collected on December 30. Institution B does not owe 
any additional assessment for the deposits acquired from Institution 
A.
    The FDIC believes that the final resolution of the assets and 
liabilities of the failed Institution A included and satisfied the 
assessment amount to be invoiced and paid on the assessment base 
determined from the September 30 report of condition.

C. Reports

    The existing rule requires the seller to file a final certified 
statement and gives the buyer the option--but does not impose the 
duty--of making the filing on behalf of the seller. The proposed rule 
would do away with final certified statements in the case of transfers, 
on the ground that final certified statements would not be needed in 
the new assessment plan. As a collateral but incidental matter, the 
proposed rule would formally eliminate Form 6420/11.
    Under the proposed rule, in order to determine the buyer's first-
quarter assessment base for use in computing its second-quarter 
assessment payment, the FDIC would need to know the amount of deposits 
that the buyer has assumed. The FDIC does not believe, however, that it 
is necessary to set forth a formal reporting requirement in the 
proposed regulation. The FDIC expects that the existing reports that 
buyers must make to their primary supervisors would serve this purpose.
    An institution's second-quarter payment would be due--in full, and 
computed with reference to the institution's assessment base as 
determined pursuant to proposed Sec. 327.6(a)(2)--on the regularly-
scheduled payment date. An institution that underpaid this assessment 
would have to pay interest on the shortfall at the rate prescribed by 
proposed Sec. 327.7 (``Payment of interest on assessment underpayments 
and overpayments''). Accordingly, a buyer might well find it convenient 
to estimate the deposits it planned to assume, and to relay the 
estimate to the FDIC. If the payment exceeded the amount properly due, 
the buyer would be entitled to an adjustment on its next payment for 
the excess amount so paid (plus interest).
    If the FDIC were to receive the estimates early enough, it could 
use the information when preparing the invoice for the buyer's second-
quarter payment. If not, the FDIC could either send out a supplemental 
invoice as soon as practicable reflecting the amendments to the buyer's 
assessment base, or could make an appropriate adjustment to the buyer's 
next assessment payment.

III. Deletion of References to Experience Factors

    The FDIC's assessments regulations currently permit the use of 
``experience factors'' in the computation of an institution's 
assessment base, for the purpose of quantifying unposted debits and 
credits. However, under the existing regulations, the use of experience 
factors will no longer be permitted for assessments due after 1994. 
Accordingly, the FDIC proposes to delete all references to experience 
factors from the regulations.

IV. Paperwork Reduction Act

    The proposed rule contains a revision to an existing collection of 
information. The revision has been submitted to the Office of 
Management and Budget (OMB) for review and approval pursuant to the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Comments 
regarding the accuracy of the burden estimate, and suggestions for 
reducing the burden, should be addressed to the Office of Management 
and Budget, Paperwork Reduction Project (3064-0057), Washington, DC 
20503, with copies of such comments sent to Steven F. Hanft, Assistant 
Executive Secretary (Administration), Federal Deposit Insurance 
Corporation, room F-400, 550 17th St., NW., Washington, DC 20429.
    At present, each insured depository institution is required to 
compute its own semiannual assessment. Under the proposed rule, 
assessments would be computed by the FDIC using information reported by 
the institution in its quarterly reports of condition. The institution 
would be required to certify its agreement with the assessment 
computation shown on the certified statement form as received from the 
FDIC or, alternatively, its agreement with that computation as amended 
in a manner specified by the institution. It is expected that, prior to 
certification, an institution would compare the information on the form 
with its own records--which it collects and maintains for purposes of 
filing its reports of condition--and, if necessary, indicate any 
amendments. This process should constitute a substantially smaller 
burden for the institution than preparing and reporting its own 
assessment computation. The requirements concerning the certified 
statement are found in Sec. 327.2 of the proposed rule.
    The estimated annual reporting burden for the collection of 
information requirement in this proposed rule is summarized as follows:
    Approximate Number of Respondents: 13,400.
    Number of Responses per Respondent: 2.
    Total Approximate Annual Responses: 26,800.
    Average Time per Response: 30 minutes.
    Total Average Annual Burden Hours: 13,400.

V. Regulatory Flexibility Act

    The Board hereby certifies that the proposed rule would not have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.).
    Under the proposal, the FDIC would compute the assessment payments 
due from each depository institution, a task currently required of the 
institution. Thus, the proposal would reduce an existing burden. 
Moreover, to the extent any burden would remain, the FDIC believes that 
it would be proportionate to the size of the institution and, 
accordingly, that the proposal would not have a disparate impact of the 
nature contemplated by the Regulatory Flexibility Act.

VI. Request for Public Comment

    The Board hereby requests comment on all aspects of the proposed 
rule. The Board particularly invites comment on the proposal to collect 
assessments by means of direct debits initiated by the FDIC and on the 
impact of the quarterly collection of assessments on insured depository 
institutions. Interested persons are invited to submit written comment 
during a 60-day comment period.
    Comments are not requested in this proceeding as to what measure--
whether total deposits or another measure--should be used as a basis 
for determining an institution's assessment base. The Board expects to 
seek public comment on that subject in the near future, in a separate 
proceeding.

List of Subjects

12 CFR Part 304

    Bank deposit insurance, Banks, banking, Freedom of information, 
Reporting and recordkeeping requirements.

12 CFR Part 327

    Assessments, Bank deposit insurance, Financing corporation, Savings 
associations.

    For the reasons stated in the preamble, the Board proposes to amend 
12 CFR parts 304 and 327 as follows:

PART 304--FORMS, INSTRUCTIONS AND REPORTS

    1. The authority citation for part 304 continues to read as 
follows:

    Authority: 5 U.S.C. 552; 12 U.S.C. 1817, 1818, 1819, 1820; 
Public Law 102-242, 105 Stat. 2251 (12 U.S.C. 1817 note).

    2. Section 304.3 is revised to read as follows:


Sec. 304.3  Certified statements.

    The certified statements required to be filed by insured depository 
institutions under the provisions of section 7 of the Federal Deposit 
Insurance Act as amended (12 U.S.C. 1817) shall be filed in accordance 
with part 327 of this chapter. The applicable forms are as follows:
    (a) Form 6420/07: Certified Statement. Form 6420/07 shows the 
computation of the semiannual assessment due to the Corporation from an 
insured depository institution. As provided for in part 327 of this 
chapter, the form will be furnished to insured depository institutions 
by the Corporation twice each calendar year and the completed statement 
must be returned to the Corporation by each institution, except that 
newly insured institutions must submit their first certified statement 
on Form 6420/10.
    (b) Form 6420/10: First Certified Statement. Form 6420/10 shows the 
computation of the semiannual assessment due to the Corporation from an 
institution in the first semiannual period after the semiannual period 
during which the institution becomes an insured depository institution, 
as provided for in part 327 of this chapter.

Appendix A to Part 304--[Amended]

    3. Appendix A to part 304 is amended by removing the entries for 
FDIC 6400/01, Consolidated Statement Amending Certified Statements, and 
FDIC 6420/11, Final Certified Statement.

PART 327--ASSESSMENTS

    1. The table of contents for part 327 is revised to read as 
follows:

Subpart A--In General

Sec.
327.1  Purpose and scope.
327.2  Certified statements.
327.3  Payment of semiannual assessments.
327.4  Annual assessment rate.
327.5  Assessment base.
327.6  Termination of insurance: Assessments, certified statements, 
and notices to depositors.
327.7  Payment of interest on assessment underpayments and 
overpayments.
327.8  Definitions.
327.9  Assessment rate schedules.
Subpart B--Insured Depository Institutions Participating in Section 
5(d)(3) Transactions
327.31  Scope.
327.32  Computation and payment of assessment.

    2. The authority citation for part 327 continues to read as 
follows:

    Authority: 12 U.S.C. 1441, 1441b, 1817-1819.

    3. Section 327.2 is revised to read as follows:


Sec. 327.2  Certified statements.

    (a) Required. Each insured depository institution shall file a 
certified statement during each semiannual period.
    (b) Time of filing. Certified statements for any semiannual period 
must be filed no later than the second-quarterly payment date specified 
in Sec. 327.3(d)(2). Certified statements postmarked on or before such 
date are deemed to be timely filed.
    (c) Form. The Corporation will provide to each insured depository 
institution a certified statement form showing the amount and 
computation of the institution's semiannual assessment. The president 
of the insured depository institution, or such other officer as the 
institution's board of directors or trustees may designate, shall 
review the information shown on the form.
    (d) Certification--(1) Form accepted. If such officer agrees that 
to the best of his or her knowledge and belief the information shown on 
the certified statement form is true, correct and complete and in 
accordance with the Federal Deposit Insurance Act and the regulations 
issued thereunder, the officer shall so certify.
    (2) Form amended--(i) In general. If such officer determines that 
to the best of his or her knowledge and belief the information shown on 
the certified statement form is not true, correct and complete and in 
accordance with the Federal Deposit Insurance Act and the regulations 
issued thereunder, the officer shall make such amendments to the 
information as he or she believes necessary. The officer shall certify 
that to the best of his or her knowledge and belief the information 
shown on the form, as so amended, is true, correct and complete and in 
accordance with the Federal Deposit Insurance Act and the regulations 
issued thereunder.
    (ii) Request for revision. The certification and filing of an 
amended form under paragraph (d)(2) of this section does not constitute 
a request for revision by the Corporation of the information shown on 
the form. Any such request to the Corporation for revision of the 
information shown on the form shall be submitted separately from the 
certified statement and in accordance with the provisions of 
Sec. 327.3(h).
    (iii) Rate multiplier. The rate multiplier shown on the certified 
statement form shall be amended only if it is inconsistent with the 
assessment risk classification assigned to the institution in writing 
by the Corporation for the current semiannual period pursuant to 
Sec. 327.4(a). Agreement with the rate multiplier shall not be deemed 
to constitute agreement with the assessment risk classification 
assigned.


Sec. 327.5  [Removed]

    3a. Section 327.5 is removed.


Secs. 327.3 and 327.4  [Redesignated as Secs. 327.4 and 327.5]

    4. Sections 327.3 and 327.4 are redesignated as Secs. 327.4 and 
327.5, respectively, and a new Sec. 327.3 is added to read as follows:


Sec. 327.3  Payment of semiannual assessments.

    (a) Required--(1) In general. Except as provided in paragraph (b) 
of this section, each insured depository institution shall pay to the 
Corporation, in two quarterly payments, a semiannual assessment 
determined in accordance with this part 327.
    (2) Notice of designated deposit account. For the purpose of making 
such payments, each insured depository institution shall designate a 
deposit account for direct debit by the Corporation. No later than 30 
days prior to the next payment date specified in paragraphs (c)(2) and 
(d)(2) of this section, each institution shall provide written notice 
to the Corporation of the account designated, including all information 
and authorizations needed by the Corporation for direct debit of the 
account. After the initial notice of the designated account, no further 
notice is required unless the institution designates a different 
account for assessment debit by the Corporation, in which case the 
requirements of the preceding sentence apply.
    (b) Newly insured institutions. A newly insured institution shall 
not be required to pay an assessment for the semiannual period during 
which it becomes an insured institution. For the semiannual period 
following the period during which it becomes an insured institution, it 
shall pay its full semiannual assessment at the time and in the manner 
provided for in paragraph (d) of this section, in an amount that is the 
product of its assessment base for the prior semiannual period, as 
provided for in Sec. 327.5(c), multiplied by one-half of the annual 
assessment rate corresponding to the assessment risk classification 
assigned to the institution pursuant to Sec. 327.4(a). For the purpose 
of making such payment, the institution shall provide to the 
Corporation no later than the payment date specified in paragraph 
(d)(2) of this section the notice required by paragraph (a)(2) of this 
section.
    (c) First-quarterly payment--(1) Invoice. No later than 30 days 
prior to the payment date specified in paragraph (c)(2) of this 
section, the Corporation will provide to each insured depository 
institution an invoice showing the amount of the assessment payment due 
from the institution for the first quarter of the upcoming semiannual 
period, and the computation of that amount. Subject to paragraph (g) of 
this section and to subpart B of this part, the invoiced amount shall 
be the product of the following: The assessment base of the institution 
for the preceding September 30 (for the semiannual period beginning the 
following January 1) or March 31 (for the semiannual period beginning 
the following July 1) computed in accordance with Sec. 327.5; 
multiplied by one-quarter of the annual assessment rate corresponding 
to the assessment risk classification assigned to the institution 
pursuant to Sec. 327.4(a).
    (2) Payment date and manner. On December 30 (for the semiannual 
period beginning the following January 1) and on June 30 (for the 
semiannual period beginning the following July 1), the Corporation will 
cause the amount stated in the applicable invoice to be directly 
debited from the deposit account designated by the insured depository 
institution for that purpose.
    (d) Second-quarterly payment--(1) Invoice. No later than 30 days 
prior to the payment date specified in paragraph (d)(2) of this 
section, the Corporation will provide to each insured depository 
institution an invoice showing the amount of the assessment payment due 
from the institution for the second quarter of that semiannual period, 
and the computation of that amount. Subject to paragraph (g) of this 
section and to subpart B of this part, the invoiced amount shall be the 
product of the following: The assessment base of the institution for 
the preceding December 31 (for the semiannual period beginning the 
following January 1) or June 30 (for the semiannual period beginning 
the following July 1) computed in accordance with Sec. 327.5; 
multiplied by one-quarter of the annual assessment rate corresponding 
to the assessment risk classification assigned to the institution 
pursuant to Sec. 327.4(a).
    (2) Payment date and manner. On March 30 (for the semiannual period 
beginning the preceding January 1) and on September 30 (for the 
semiannual period beginning the preceding July 1), the Corporation will 
cause the amount stated in the applicable invoice to be directly 
debited from the deposit account designated by the insured depository 
institution for that purpose.
    (e) Necessary action, sufficient funding by institution. Each 
insured depository institution shall take all actions necessary to 
allow the Corporation to debit assessments from the institution's 
designated deposit account and, prior to each payment date indicated in 
paragraphs (c)(2) and (d)(2) of this section, shall ensure that funds 
in an amount at least equal to the invoiced amount are available in the 
designated account for direct debit by the Corporation. Failure to take 
any such action or to provide such funding of the account shall be 
deemed to constitute nonpayment of the assessment.
    (f) Business days. If a payment date specified in paragraph (c) or 
(d) of this section falls on a day that is not a business day, the 
applicable date shall be the previous business day.
    (g) Payment adjustments in succeeding quarters. The quarterly 
assessment invoices provided by the Corporation may reflect adjustments 
resulting from such factors as amendments to prior quarterly reports of 
condition, retroactive revision of an institution's assessment risk 
classification, and revisions of assessment computations for prior 
quarters.
    (h) Request for revision of computation of quarterly assessment 
payment--(1) In general. An institution may submit a request for 
revision of the computation of the institution's quarterly assessment 
payment as shown on the quarterly invoice. Such revision may be 
requested in the following circumstances:
    (i) The institution disagrees with the computation of the 
assessment base as stated on the invoice;
    (ii) The institution determines that the rate multiplier applied by 
the Corporation is inconsistent with the assessment risk classification 
assigned to the institution in writing by the Corporation for the 
semiannual period for which the payment is due; or
    (iii) The institution believes that the invoice does not fully or 
accurately reflect adjustments provided for in paragraph (g) of this 
section.
    (2) Inapplicability. This paragraph (h) is not applicable to 
requests for review of an institution's assessment risk classification, 
which are covered by Sec. 327.4(d).
    (3) Requirements. Any such request for revision must be submitted 
within 60 days of the date of the quarterly assessment invoice for 
which revision is requested, except that requests for revision 
resulting from detection by the institution of an error or omission for 
which the institution files an amendment to its quarterly report of 
condition must be submitted within 60 days of the filing date of the 
amendment to the quarterly report of condition. The request for 
revision shall be submitted to the Chief of the Assessment Operations 
Section, and shall provide documentation sufficient to support the 
revision sought by the institution. If additional information is 
requested by the Corporation, such information shall be provided by the 
institution within 21 days of the date of the Corporation's request for 
additional information. Any institution submitting a timely request for 
revision will receive written notice from the Corporation regarding the 
outcome of its request. Upon completion of a review, the Chief 
Financial Officer (or his or her designee) shall make a determination 
as to whether the requested revision is warranted and shall promptly 
notify the institution in writing of the determination.
    (i) Assessment notice not received. Any institution that has not 
received an assessment invoice for any quarterly payment by the 
fifteenth day of the month in which the quarterly payment is due shall 
promptly notify the Corporation. Failure to provide prompt notice to 
the Corporation shall not affect the institution's obligation to make 
full and timely assessment payment. Unless otherwise directed by the 
Corporation, the institution shall preliminarily pay the amount shown 
on its assessment invoice for the preceding quarter, subject to 
subsequent correction.
    5. Newly designated Sec. 327.4 is amended by revising the section 
heading; removing paragraphs (a) through (c); redesignating paragraphs 
(d), (f), and (g) as new paragraphs (g), (c), and (d), respectively; 
removing the heading of paragraph (e); redesignating paragraphs (e)(1) 
and (e)(2) as new paragraphs (a) and (b), respectively, and revising 
them; revising newly designated paragraph (g); and redesignating 
paragraphs (h) and (i) as new paragraphs (f) and (e), respectively, to 
read as follows:


Sec. 327.4  Annual assessment rate.

    (a) Assessment risk classification. For the purpose of determining 
the annual assessment rate for BIF members under Sec. 327.9(a), and the 
annual assessment rate for SAIF members under Sec. 327.9(c), each 
insured depository institution will be assigned an ``assessment risk 
classification''. Notice of the assessment risk classification 
applicable to a particular semiannual period will be provided to the 
institution with the first-quarterly invoice provided pursuant to 
Sec. 327.3(c)(2). Each institution's assessment risk classification, 
which will be composed of a group and a subgroup assignment, will be 
based on the following capital and supervisory factors:
    (1) Capital factors. Institutions will be assigned to one of the 
following three capital groups on the basis of data reported in the 
institution's Report of Income and Condition, Report of Assets and 
Liabilities of U.S. Branches and Agencies of Foreign Banks, or Thrift 
Financial Report containing the necessary capital data, for the report 
date that is closest to the last day of the seventh month preceding the 
current semiannual period.
    (i) Well capitalized. For assessment risk classification purposes, 
the short-form designation for this group is ``1''.
    (A) Except as provided in paragraph (a)(1)(i)(B) of this section, 
this group consists of institutions satisfying each of the following 
capital ratio standards: Total risk-based ratio, 10.0 percent or 
greater; Tier 1 risk-based ratio, 6.0 percent or greater; and Tier 1 
leverage ratio, 5.0 percent or greater. New insured depository 
institutions coming into existence after the report date specified in 
paragraph (a)(1) of this section will be included in this group for the 
first semiannual period for which they are required to pay assessments.
    (B) For purposes of assessment risk classification, an insured 
branch of a foreign bank will be deemed to be ``well capitalized'' if 
the insured branch maintains the pledge of assets required under 12 CFR 
346.19, and maintains the eligible assets prescribed under 12 CFR 
346.20 at 108 percent or more of the average book value of the insured 
branch's third-party liabilities for the quarter ending on the report 
date specified in paragraph (a)(1) of this section.
    (ii) Adequately capitalized. For assessment risk classification 
purposes, the short-form designation for this group is ``2''.
    (A) Except as provided in (a)(1)(ii)(B) of this section, this group 
consists of institutions that do not satisfy the standards of ``well 
capitalized'' under this paragraph but which satisfy each of the 
following capital ratio standards: Total risk-based ratio, 8.0 percent 
or greater; Tier 1 risk-based ratio, 4.0 percent or greater; and Tier 1 
leverage ratio, 4.0 percent or greater.
    (B) For purposes of assessment risk classification, an insured 
branch of a foreign bank will be deemed to be ``adequately 
capitalized'' if the insured branch:
    (1) Maintains the pledge of assets required under 12 CFR 346.19;
    (2) Maintains the eligible assets prescribed under 12 CFR 346.20 at 
106 percent or more of the average book value of the insured branch's 
third-party liabilities for the quarter ending on the report date 
specified in paragraph (a)(1) of this section; and
    (3) Does not meet the definition of a well capitalized insured 
branch of a foreign bank.
    (iii) Undercapitalized. For assessment risk classification 
purposes, the short-form designation for this group is ``3''. This 
group consists of institutions that do not qualify as either ``well 
capitalized'' or ``adequately capitalized'' under paragraphs (a)(1) (i) 
and (ii) of this section.
    (2) Supervisory risk factors. Within its capital group, each 
institution will be assigned to one of three subgroups based on the 
Corporation's consideration of supervisory evaluations provided by the 
institution's primary federal regulator. The supervisory evaluations 
include the results of examination findings by the primary federal 
regulator, as well as other information the primary federal regulator 
determines to be relevant. In addition, the Corporation will take into 
consideration such other information (such as state examination 
findings, if appropriate) as it determines to be relevant to the 
institution's financial condition and the risk posed to the BIF or 
SAIF. Authority to set dates applicable to the determination of 
supervisory subgroup assignments is delegated to the Corporation's 
Director of the Division of Supervision (or his or her designee). The 
three supervisory subgroups are:
    (i) Subgroup ``A''. This subgroup consists of financially sound 
institutions with only a few minor weaknesses;
    (ii) Subgroup ``B''. This subgroup consists of institutions that 
demonstrate weaknesses which, if not corrected, could result in 
significant deterioration of the institution and increased risk of loss 
to the BIF or SAIF; and
    (iii) Subgroup ``C''. This subgroup consists of institutions that 
pose a substantial probability of loss to the BIF or SAIF unless 
effective corrective action is taken.
    (b) Payment of assessment at rate assigned. Institutions shall make 
timely payment of assessments based on the assessment risk 
classification assigned in the notice provided to the institution 
pursuant to paragraph (a) of this section. Timely payment is required 
notwithstanding any request for review filed pursuant to paragraph (d) 
of this section. An institution for which the assessment risk 
classification cannot be determined prior to an invoice date specified 
in Sec. 327.3 (c)(1) or (d)(1) shall preliminarily pay on that invoice 
at the assessment rate applicable to the classification designated 
``2A'' in the appropriate rate schedule set forth in Sec. 327.9. If 
such institution is subsequently assigned for that semiannual period an 
assessment risk classification other than that designated as ``2A'', or 
if the classification assigned to an institution in the notice is 
subsequently changed, any excess assessment paid by the institution 
will be credited by the Corporation, with interest, and any additional 
assessment owed shall be paid by the institution, with interest, in the 
next quarterly assessment payment after such subsequent assignment or 
change. Interest payable under this paragraph shall be determined in 
accordance with Sec. 327.7.
* * * * *
    (g) Lifeline accounts. Notwithstanding any other provision of this 
part 327, the portion of an institution's assessment base that is 
attributable to deposits in lifeline accounts pursuant to the Bank 
Enterprise Act, 12 U.S.C. 1834, will be assessed at such rate as may be 
established by the Corporation pursuant to 12 U.S.C. 1834 and section 
7(b)(2)(H) of the Federal Deposit Insurance Act, as amended, 12 U.S.C. 
1817(b)(2)(H).
    6. Newly designated Sec. 327.5 is amended by revising the section 
heading, removing paragraph (a), redesignating paragraphs (b) and (c) 
as new paragraphs (a) and (b), respectively, revising newly designated 
paragraph (a) introductory text, revising newly designated paragraphs 
(b)(1) introductory text and (b)(1)(ii), removing newly designated 
paragraphs (b)(1)(iii) and (b)(1)(iv), and adding a new paragraph (c), 
to read as follows:


Sec. 327.5  Assessment base.

    (a) Computation of assessment base. Except as provided in paragraph 
(c) of this section, the assessment base of an insured depository 
institution for any date on which the institution is required to file a 
quarterly report of condition shall be computed by:
* * * * *
    (b) Methods of reporting unposted credits and unposted debits--(1) 
Unposted credits. Each insured depository institution shall report 
unposted credits in quarterly reports of condition for addition to the 
assessment base in the following manner:
* * * * *
    (ii) If the institution's records show the total actual amount of 
unposted credits but do not segregate the amount as stated in paragraph 
(b)(1)(i) of this section, the institution must report the total actual 
amount of the unposted credits for addition to time and savings 
deposits.
* * * * *
    (c) Newly insured institutions. In the case of a newly insured 
institution, the assessment base for the last date for which insured 
depository institutions are required to file quarterly reports of 
condition within the semiannual period in which the newly insured 
institution became an insured institution shall be deemed to be its 
assessment base for that semiannual period. If the institution has not 
filed such a report by the due date for such reports from insured 
depository institutions, it shall promptly provide to the Corporation 
such information as the Corporation may require to prepare the 
certified statement form for the institution for the current semiannual 
period.
    7. Section 327.6 is amended by revising the section heading and 
paragraph (a) to read as follows:


Sec. 327.6  Termination of insurance: Assessments, certified 
statements, and notices to depositors.

    (a) Deposit transfers--(1) Assessment base computation. If a 
deposit-transfer transaction occurs at any time in the second quarter 
of the transfer period--
    (i) Each acquiring institution's assessment base for the first 
quarter of the transfer period (as computed pursuant to Sec. 327.5) 
shall be increased by an amount equal to such institution's pro rata 
share of the transferring institution's assessment base for such first 
quarter; and
    (ii) The transferring institution's assessment base for such first 
quarter shall be reduced by an amount equal to the following product: 
the transferring institution's assessment base for that quarter; 
multiplied by the sum of the pro rata shares of all acquiring 
institutions participating in deposit-transfer transactions occurring 
during the second quarter of the transfer period.
    (2) For purposes of paragraph (a)(1) of this section, the phrase 
``pro rata share'' means a fraction the numerator of which is the 
deposits assumed by an acquiring institution from the transferring 
institution during the second quarter of the transfer period, and the 
denominator of which is the total deposits of the transferring 
institution as required to be reported in the quarterly report of 
condition for the first quarter of the transfer period.
    (3) Other assessment-base adjustments--(i) In general. The 
Corporation may in its discretion make such adjustments to the 
assessment base of an institution participating in a deposit-transfer 
transaction, or in a related transaction, as may be necessary properly 
to reflect the likely amount of the loss presented by the institution 
to its insurance fund.
    (ii) Limitation on adjustments. The total amount by which the 
Corporation may increase the assessment bases of acquiring or other 
institutions under paragraph (a)(2)(i) of this section shall not 
exceed, in the aggregate, the transferring institution's assessment 
base as reported in its quarterly report of condition for the first 
quarter of the transfer period.
* * * * *
    8. Section 327.7 is amended by revising the section heading and 
paragraph (a), to read as follows:


Sec. 327.7  Payment of interest on assessment underpayments and 
overpayments.

    (a) Payment of interest--(1) Payment by institutions. Each insured 
depository institution shall pay interest to the Corporation on any 
underpayment of the institution's assessment.
    (2) Payment by Corporation. The Corporation will pay interest to an 
insured depository institution on any overpayment by the institution of 
its assessment.
    (3) Accrual of interest. Interest shall accrue under this section 
from the day following the due date, as provided for in Sec. 327.3(c) 
and (d), of the quarterly assessment amount that was overpaid or 
underpaid, through the payment date applicable to the quarterly 
assessment invoice on which adjustment is made by the Corporation for 
the underpayment or overpayment, provided, however, that interest shall 
not begin to accrue on any overpayment until the day following the date 
such overpayment was received by the Corporation.
* * * * *
    9. Section 327.8 is amended by revising paragraph (d)(2) and by 
adding a new paragraph (h), to read as follows:


Sec. 327.8  Definitions.

* * * * *
    (d) * * *
    (2) Current semiannual period. The term current semiannual period 
means, with respect to a certified statement or an assessment, the 
semiannual period within which such certified statement is required to 
be filed or for which such assessment is required to be paid.
* * * * *
    (h) As used in Sec. 327.6, the following terms are given the 
following meanings:
    (1) Acquiring institution. The term acquiring institution means an 
insured depository institution that assumes some or all of the deposits 
of a transferring institution in a particular deposit-transfer 
transaction.
    (2) Transferring institution. The term transferring institution 
means an insured depository institution the deposits of which are 
assumed by an acquiring institution in a particular deposit-transfer 
transaction.
    (3) Deposit-transfer transaction. The term deposit-transfer 
transaction means the assumption by one insured depository institution 
of another insured depository institution's liability for deposits, 
whether by way of merger, consolidation, or other statutory assumption, 
or pursuant to contract, when the transferring institution's status as 
an insured institution has terminated or is expected to terminate 
either as a result of the particular deposit-transfer transaction or as 
a result of a related series of such transactions. The term deposit-
transfer transaction does not refer to the assumption of liability for 
deposits from the estate of a failed institution.
    (4) Transfer period. The term transfer period means the semiannual 
period, consisting of two calendar quarters, during which a deposit-
transfer transaction occurs.


Secs. 327.11 and 327.12  [Removed]

    10. Sections 327.11 and 327.12 are removed.


Sec. 327.13  [Redesignated as Sec. 327.9]

    11. Section 327.13 is redesignated as Sec. 327.9, transferred to 
subpart A, and amended by revising the section heading, removing 
paragraphs (a) and (b), redesignating paragraphs (c) and (d) as new 
paragraphs (a) and (b), respectively, revising newly designated 
paragraph (a), amending newly designated paragraph (b) by removing the 
word ``assessment'' in the first sentence, and adding a new paragraph 
(c) to read as follows:


Sec. 327.9  Assessment rate schedules.

    (a) BIF members. Subject to Sec. 327.4(c), the annual assessment 
rate for each BIF member other than a bank specified in Sec. 327.31(a) 
shall be the rate designated in the following rate schedule applicable 
to the assessment risk classification assigned by the Corporation under 
Sec. 327.4(a) to that BIF member (the schedule utilizes the group and 
subgroup designations specified in Sec. 327.4(a)): 

                                Schedule                                
------------------------------------------------------------------------
                                                Supervisory subgroup    
               Capital group               -----------------------------
                                                A         B         C   
------------------------------------------------------------------------
1.........................................        23        26        29
2.........................................        26        29        30
3.........................................        29        30       31 
------------------------------------------------------------------------

* * * * *

    (c) SAIF members. Subject to Sec. 327.4(c), the annual assessment 
rate for each SAIF member shall be the rate designated in the following 
schedule applicable to the assessment risk classification assigned by 
the Corporation under Sec. 327.4(a) to that SAIF member (the schedule 
utilizes the group and subgroup designations specified in 
Sec. 327.4(a).):

                                Schedule                                
------------------------------------------------------------------------
                                                Supervisory subgroup    
               Capital group               -----------------------------
                                               A         B          C   
------------------------------------------------------------------------
1.........................................        23        26        29
2.........................................        26        29        30
3.........................................        29        30        31
------------------------------------------------------------------------


Secs. 327.21-327.24  [Removed]

    12. Sections 327.21, 327.22, 327.23, and 327.24 are removed.


Sec. 327.32  [Amended]

    13. Section 327.32 is amended by removing paragraph (a) and 
redesignating paragraphs (b) and (c) as new paragraphs (a) and (b), 
respectively.


Sec. 327.33  [Removed]

    14. Section 327.33 is removed.
    15. Part 327 is amended by removing subparts B and C, redesignating 
subpart D as new subpart B, and in the list below, for each section in 
subpart A and newly designated subpart B, remove the reference 
indicated in the middle column everywhere it appears and add the 
reference indicated in the right column:

------------------------------------------------------------------------
        Section                  Remove                     Add         
------------------------------------------------------------------------
327.4(c)...............  327.13(c)(2)...........  327.9(a).             
                         327.23(d)(2)...........  327.9(c).             
327.4(d)...............  (e)(1).................  (a).                  
327.4(e)...............  (e)(1).................  (a).                  
327.5(a)(1)(i).........  (c)(1).................  (b)(1).               
327.5(a)(1)(ii)........  (c)(1).................  (b)(1).               
327.5(a)(2)(iii).......  (b)(1)(i)..............  (a)(1)(i).            
                         (c)(2).................  (b)(2).               
327.5(a)(2)(iv)........  (b)(1)(ii).............  (a)(1)(ii).           
                         (c)(2).................  (b)(2).               
327.5(b)(2)............  (c)(1).................  (b)(1).               
327.31(a)..............  Subpart D..............  Subpart B.            
327.31(b)..............  Subpart D..............  Subpart B.            
327.32(a)(1)(i)........  (b)(2)(i)..............  (a)(2)(i).            
                         (b)(2)(ii).............  (a)(2)(ii).           
                         327.3..................  327.4.                
                         Subpart D..............  Subpart B.            
327.32(a)(2)(i)........  (b)(l)(i)..............  (a)(l)(i).            
                         Subpart C..............  Subpart A.            
327.32(a)(2)(ii).......  (b)(1)(i)..............  (a)(1)(i).            
                         Subpart B..............  Subpart A.            
327.32(a)(3)...........  (b)(3)(iii)............  (a)(3)(iii).          
                         (b)(3)(i)..............  (a)(3)(i).            
                         (b)(3)(ii).............  (a)(3)(ii).           
327.32(a)(4)...........  (b)(3)(i)..............  (a)(3)(i).            
                         (b)(4)(ii).............  (a)(4)(ii).           
327.32(a)(5)...........  (b)(4).................  (a)(4).               
327.32(b)..............  Subpart D..............  Subpart B.            
                         Subpart B..............  Subpart A.            
------------------------------------------------------------------------

    By order of the Board of Directors.

    Dated at Washington, DC, this 24th day of May, 1994.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-13368 Filed 6-9-94; 8:45 am]
BILLING CODE 6714-01-P