US banks asked to prepay fees


Banks would prepay $45 billion of regular quarterly assessments under the plan, but not have to recognize the hit to their earnings until the fees are normally due.
The five-member board of the Federal Deposit Insurance Corp voted unanimously to put the proposal out for 30 days of public comment.

Regulators have been exploring ways to replenish the fund that safeguards bank deposits without putting a huge burden on healthy banks.
FDIC staff raised their expectations for bank failure costs from 2009 through 2013 to $100 billion, up from a previous estimate of $70 billion.

If finalised, the proposal would require banks to prepay on December 30, 2009 their regular assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012.
The FDIC said the insurance fund’s balance is expected to become negative this quarter and will remain negative through 2012, but said the agency will still have plenty of cash to operate and handle bank failures.

“We have tons of money to protect insured depositors,” FDIC Chairman Sheila Bair said before the vote.

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