[Federal Register Volume 73, Number 201 (Thursday, October 16, 2008)]
[Notices]
[Page 61598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24185]


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 Notices
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 This section of the FEDERAL REGISTER contains documents other than rules 
 or proposed rules that are applicable to the public. Notices of hearings 
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 delegations of authority, filing of petitions and applications and agency 
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  Federal Register / Vol. 73, No. 201 / Thursday, October 16, 2008 / 
Notices  

[[Page 61598]]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Federal Deposit Insurance Corporation Restoration Plan

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Establishment of Federal Deposit Insurance Corporation 
Restoration Plan

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Federal Deposit Insurance Corporation Restoration Plan

    The recent failures of a large institution and other smaller ones 
have significantly increased the Deposit Insurance Fund's (the DIF or 
the fund) loss provisions, resulting in a decline in the reserve ratio. 
As of June 30, 2008, the reserve ratio stood at 1.01 percent, 18 basis 
points below the reserve ratio as of March 31, 2008. This is the lowest 
reserve ratio for a combined bank and thrift insurance fund since March 
31, 1995. The FDIC expects a higher rate of insured institution 
failures in the next few years compared to recent years; thus, the 
reserve ratio may continue to decline. Because the fund reserve ratio 
has fallen below 1.15 percent and is expected to remain below 1.15 
percent, the FDIC is required to establish and implement a restoration 
plan to restore the reserve ratio to 1.15 percent within five years.
    In FDIC's view, to restore the reserve ratio to 1.15 percent within 
five years will require higher assessment rates. Since the current 
rates are already 3 basis points uniformly above the base rate schedule 
established in the 2006 assessments rule, a new rulemaking is required. 
The FDIC is concurrently publishing a notice of proposed rulemaking 
that would raise rates and make other changes to the assessment system.
    Pursuant to section 7(b)(3)(E) (12 U.S.C. 1817(b)(3)(E)), the FDIC 
establishes the following restoration plan on October 7, 2008.
    1. The accompanying NPR is published elsewhere in this issue of the 
Federal Register as soon as possible. Based upon the projections 
contained in the NPR, the assessment rates proposed in the NPR will 
return the Deposit Insurance Fund reserve ratio to at least 1.15 
percent. Absent extraordinary circumstances, the reserve ratio must be 
returned to at least 1.15 percent no later than five years after 
establishment of the plan. To determine whether the reserve ratio has 
returned to the statutory range, the FDIC will rely on the December 31, 
2013, reserve ratio, which is the first date after October 7, 2013, for 
which the reserve ratio will be known.
    2. Before the FDIC adopts a final rule following the NPR, it will 
update its loss and income projections for the fund and, if needed to 
ensure that the fund reserve ratio reaches 1.15 percent within the 
five-year period, will adopt higher assessment rates than those 
proposed in the NPR. If consistent with the fund reserve ratio reaching 
1.15 percent within the five-year period, the FDIC may also adopt lower 
assessment rates.
    3. At least semiannually thereafter, the FDIC will update its loss 
and income projections for the fund and, if needed to ensure that the 
fund reserve ratio reaches 1.15 percent within the five-year period, 
will increase assessment rates, following notice-and-comment rulemaking 
if required. If consistent with the fund reserve ratio reaching 1.15 
percent within the five-year period, the FDIC may also lower assessment 
rates, again following notice-and-comment rulemaking if required.
    4. Institutions may continue to use assessment credits without 
additional restriction (other than those imposed by law) during the 
term of the Restoration Plan, since the few remaining credits should 
have only a minimal effect on fund revenue.
    5. This Restoration Plan shall be implemented immediately upon 
establishment by the FDIC.

    Dated at Washington, DC, this 7th day of October, 2008.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. E8-24185 Filed 10-15-08; 8:45 am]
BILLING CODE 6714-01-P