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) -- The

Federal Deposit Insurance Corp.

released a proposal on Tuesday to change the base on which deposit insurance premiums are assessed, from domestic deposits to total assets.

The new rule is likely to be welcomed by community bankers relying heavily on domestic deposits, while larger institutions relying heavily on funding from the

Federal Home Loan Banks

and other wholesale lenders, as well as foreign deposits, will be less than thrilled. "Individual banks may pay or more pay less under this proposal," said FDIC spokesman David Barr."

The FDIC said that since the deposit insurance assessment base will be significantly larger, it will lower its assessment rates as part of the agency's "goal of not significantly altering the total amount of revenue collected from the industry."

FDIC Chairman Sheila Bair said the proposal "achieves the goals of the Dodd-Frank Act to change the assessment base to better reflect risks to the deposit insurance fund," and that the new deposit insurance plan would support the

higher deposit insurance reserve ratio

also required under the bank reform legislation.

The new rule is part of the agency's implementation of new rules required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Obama signed into law in July.

Under the new rules, the deposit insurance assessment base will be a bank's average total assets less its average tangible equity, with adjustments for brokered deposits, unsecured debt and for custodial banks and banks that primarily provide services to other banks.

The current deposit insurance setup charges a premium based on a bank's total domestic deposits, with adjustments made depending on examination ratings, brokered deposits and balance sheet risk.

According to third-quarter

Securities and Exchange Commission

filings, the largest member of the Federal Home Loan Bank System is the

Federal Home Loan Bank of San Francisco

, which had $142.7 billion in total assets as of September 30. The bank's largest borrowers as of June 30 were subsidiaries of




Bank of America



JPMorgan Chase



Wells Fargo




FDIC Announces Funding Plan >>


Written by Philip van Doorn in Jupiter, Fla.

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Philip van Doorn


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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.