Sept. 29 (Bloomberg) -- The Federal Deposit Insurance Corp. is asking lenders to prepay three years of premiums, raising $45 billion, to replenish reserves drained by the fastest pace of bank failures in 17 years.
The insurance fund will have a negative balance as of tomorrow after 120 banks were shut in the past two years, and will be positive by 2012, the staff said. Banks failures may cost $100 billion through 2013 with half the cost already incurred, the FDIC said. The agency today rejected options for a second special fee or borrowing from the Treasury Department.
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The proposal adopted unanimously by the board requires banks to pay premiums for the fourth quarter and next three years on Dec. 30.
The board backed prepayments over alternatives such as borrowing taxpayer dollars from the Treasury Department, charging the banking industry a special fee in addition to levies they already pay and borrowing directly from the banks.
FDIC Proposes Banks Prepay Deposit Fees Through 2012 (Update1) - Bloomberg.com
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