To stop the spread of panicked withdrawals throughout the banking system last month, the FDIC guaranteed all deposits at SVB and Signature Bank, even those over $250,000. Such losses require the FDIC to impose a "special assessment" to replenish the DIF.
The law does not define the "assessment base" for the special assessment or which banks will pay it. There is not a time frame for recouping the funds. Echoing of FDIC Chair Martin Gruenberg, former FDIC Chair Sheila Bair told Reuters on April 6 the agency has "a lot of latitude" in designing the special assessment.Currently, the law requires the FDIC to maintain $1.35 in the fund for every $100 of insured deposits. By the end of December, DIF's balance stood at $128.2 billion, meaning the bank failures in March could account for about 18% of the fund.
During the financial crisis of 2008 the sheer volume of bank failures pushed the DIF about $20 billion into the red. After a period of public comment, the FDIC's May 2009 on a special assessment put the cost burden more heavily on the shoulders of the biggest financial institutions.
Get ready for banks to charge you a transaction fee for your checks. Thanks again Joe for your regulators lack of oversight.
I'm till I 😆 llllllltltl
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