[Federal Register Volume 75, Number 207 (Wednesday, October 27, 2010)]
[Notices]
[Page 66293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27042]



  Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / 
Notices  

[[Page 66293]]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Adoption of Federal Deposit Insurance Corporation Restoration 
Plan

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice.

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    On October 7, 2008, the FDIC established a Restoration Plan for the 
Deposit Insurance Fund (the DIF or the fund) to return the DIF to its 
statutorily mandated minimum reserve ratio of 1.15 percent within five 
years.\1\ In February 2009, given the extraordinary circumstances 
facing the banking industry, the FDIC amended its Restoration Plan to 
extend the restoration period from five to seven years.\2\ Congress 
amended the statute governing establishment and implementation of a 
restoration plan in May 2009 to allow the FDIC up to eight years to 
return the DIF reserve ratio to 1.15 percent, absent extraordinary 
circumstances.\3\ The FDIC amended its Restoration Plan consistent with 
the statutory change and, pursuant to the amended Restoration Plan, 
adopted a uniform 3 basis point increase in initial assessment rates 
effective January 1, 2011, to meet the Restoration Plan's goal of 
returning the reserve ratio to 1.15 percent by the end of 2016.\4\
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    \1\ 73 FR 61598 (Oct. 16, 2008).
    \2\ 74 FR 9564 (Mar. 4, 2009).
    \3\ 12 U.S.C. 1817(b)(3)(E)(ii), as amended by the Helping 
Families Save Their Homes Act of 2009, Public Law 111-22, Sec.  
204(b), 123 Stat. 1632, 1649.
    \4\ 74 FR 51062 (Oct. 2, 2009).
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    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank) requires the FDIC to set a designated reserve ratio of not 
less than 1.35 percent for any year.\5\ Dodd-Frank also requires the 
FDIC to take ``such steps as may be necessary'' to increase the level 
of the DIF to 1.35 percent of estimated insured deposits by September 
30, 2020.\6\ Under Dodd-Frank, the FDIC is required to offset the 
effect of requiring that the reserve ratio reach 1.35 percent by 
September 30, 2020, rather than 1.15 percent by the end of 2016, on 
insured depository institutions with total consolidated assets of less 
than $10,000,000,000.\7\
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    \5\ Public Law 111-203, Sec.  334(a), 124 Stat. 1376, 2709 (to 
be codified at 12 U.S.C. 1817(b)(3)(B)).
    \6\ Public Law 111-203, Sec.  334(d), 124 Stat. 1376, 2709 (to 
be codified at 12 U.S.C. 1817(d)).
    \7\ Public Law 111-203, Sec.  334(e), 124 Stat. 1376, 2709 (to 
be codified at 12 U.S.C. 1817(e)).
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    The FDIC has updated its income, loss and reserve ratio estimates 
and has concluded that expected losses for the period 2010 through 2014 
are lower than were projected in June 2010. The FDIC now projects that 
losses during this period will be $52 billion, rather than $60 billion 
as projected in June. Given this lower loss projection, the FDIC 
estimates that the fund reserve ratio will reach 1.15 percent by the 
fourth quarter of 2018, even without the 3 basis point uniform increase 
in initial assessment rates presently scheduled to take effect January 
1, 2011. Since Dodd-Frank provides that the FDIC is to offset the 
effect of the requirement that the reserve ratio reach 1.35 percent by 
September 30, 2020 on insured depository institutions with total 
consolidated assets of less than $10,000,000,000, initial assessment 
rates applicable to all insured depository institutions need be set 
only high enough to reach 1.15 percent by the statutory deadline of 
September 30, 2020; the mechanism for reaching 1.35 percent by the 
statutory deadline of September 30, 2020, and the manner of offset can 
be determined separately.
    The FDIC has concluded that given the continuing stresses on the 
earnings of insured depository institutions and the additional time 
afforded to reach the reserve ratio required by Dodd-Frank, that it 
will forego the uniform 3 basis point increase in initial assessment 
rates scheduled to take effect on January 1, 2011. The FDIC intends to 
pursue further rulemaking in 2011 regarding the method that will be 
used to assess insured depository institutions with total consolidated 
assets of $10,000,000,000 or more to offset the effect of the statutory 
requirement that the reserve ratio reach 1.35 percent by September 30, 
2020, rather than 1.15 percent by the end of 2016.
    Therefore, the FDIC adopts the following Restoration Plan, which 
supersedes the Amended Restoration Plan adopted on September 29, 2009:
    1. The period of the Restoration Plan is extended to September 30, 
2020.
    2. The FDIC will forego the uniform 3 basis point increase in 
initial assessment rates scheduled to take effect on January 1, 2011.
    3. The FDIC plans to maintain the current schedule of assessment 
rates for all insured depository institutions.
    4. The FDIC will pursue further rulemaking in 2011 regarding the 
method that will be used to reach 1.35 percent by September 30, 2020 
and offset the effect on insured depository institutions with total 
consolidated assets of less than $10,000,000,000 of the statutory 
requirement that the reserve ratio reach 1.35 percent by September 30, 
2020, rather than 1.15 percent by the end of 2016.
    5. At least semiannually hereafter, the FDIC will update its loss 
and income projections for the fund and, if needed, will increase 
assessment rates, following notice-and-comment rulemaking if required. 
The FDIC may also lower assessment rates following notice-and-comment 
rulemaking if required.
    6. Institutions may continue to use assessment credits (for regular 
quarterly assessments and for any special assessments) 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.
    7. This Restoration Plan shall be implemented immediately.

    Dated at Washington, DC, this 19th day of October, 2010.

    By order of the Board of Directors.

Robert E. Feldman,
Executive Secretary.
[FR Doc. 2010-27042 Filed 10-26-10; 8:45 am]
BILLING CODE 6714-01-P