"FDIC Board Approves Final Rule on Prepaid Assessments" says "The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today voted to require insured institutions to prepay slightly over three years of estimated insurance assessments. The pre-payment allows the FDIC to strengthen the cash position of the Deposit Insurance Fund (DIF) immediately without immediately impacting earnings of the industry.... Payment of the prepaid assessment, along with the payment of institutions' regular third quarter assessment, will be due on December 30, 2009. The FDIC estimates that it will collect approximately $45 billion from total prepaid assessments.... While the prepayment will immediately improve the FDIC's liquidity, it will not have an impact on the fund balance." Chairman Bair said, "[T]he public should know that the discussions over the past several months have never been about the FDIC's ability to fulfill its commitment to depositors, but rather how that would be done. The FDIC's commitment to depositors is absolute, and we and the industry have more than enough resources to make good on that commitment. No depositor has ever lost a penny of an insured deposit and no depositor ever will." Also, the American Securitization Forum commented, "ASF welcomes the FDIC Board's unanimous action this morning to extend application of the FDIC's securitization rule to provide needed certainty to existing securitizations as well as those issued over the next few months. The application of this rule had been cast in doubt by accounting standards changes that will take effect for reporting periods after November 15th, 2009. Today's action by the FDIC Board will resolve this uncertainty and will allow bank securitizations of credit card and auto loans to resume, which in turn will make additional credit available to consumers at a critical time for the American economy."

Email This Article




Use a comma or a semicolon to separate

captcha image