FDIC May Propose Banks Prepay Fees
WASHINGTON (
) -- The Federal Deposit Insurance Corp. is expected Tuesday to propose that U.S. banks prepay three years of fees to replenish the fund, reports say.
A source, speaking to
Reuters
, said the FDIC likely would propose for the banking industry to prepay $12 billion a year in assessments, for a total of $36 billion. The
Wall Street Journal
said the fees could be as high as $54 billion after having the banks prepay fees for 2010, 2011 and 2012.
The FDIC is meeting Tuesday. An FDIC spokesman declined to comment.
The FDIC, which backs several trillion dollars of U.S. deposits, had $10.4 billion in its deposit-insurance fund at the end of June, down from $45.2 billion a year earlier, according to the
Journal
. The fund is typically financed by assessments on the banks, but its reserves recently have been depleted as bank failures have outpaced fees being received by the FDIC.
The FDIC proposal is likely to get resistance from the banking industry because of the size of the upfront fees and because the payments would come just as the industry is beginning a recovery.
The higher insurance-fund fees are likely to continue crimping the profits of
such as
Bank of America
(BAC) - Get Report
,
JPMorgan Chase
(JPM) - Get Report
,
Citigroup
(C) - Get Report
and
Wells Fargo
(WFC) - Get Report
, but could even have a bigger impact on regional lenders.
-- Reported by Joseph Woelfel in New York
.
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