One-Time Assessment Credit
Legislative Authorization
The Federal Deposit Insurance Reform Act of 2005 authorized eligible insured
depository institutions to share a one-time assessment credit pool of approximately
$4.7 billon. For more information on the credit provisions see credit
legislation.
Preliminary and Final Credit Statements
All institutions received
a Preliminary Estimated Statement of One-Time Credit dated October 16,
2006, and a Final
Statement of One-Time Credit
dated May 25, 2007. Based on the information in the FDIC’s official
system of records, both statements include an historical summary of an
institution’s own credit amount, credit amounts acquired through
merger and transfer activity. The Final Statement also included
credit amounts acquired under the de facto rule if the acquiring institution
demonstrated that it qualified. Copies of the statements with their explanatory
cover letters can be downloaded from https://www2.fdicconnect.gov.
Credit Summary Statement
For institutions with a credit,
a credit summary statement is included with their invoice starting with
the June 2007 invoice. The credit summary
statement reflects an institution’s beginning credit balance; any
credit amount acquired through merger during the current quarter;
credit transferred in; credit transferred out; total credit available
for current
quarter; credit applied to the current assessment; and the ending
credit balance. If an additional copy of the credit summary statement
is needed,
simply download it with your invoice at https://www2.fdicconnect.gov.
Eligibility
Two groups of institutions are eligible for assessment credits: (1)
insured depository institutions that were in existence on December 31,
1996, and that paid a deposit insurance premium prior to that date; and
(2) insured depository institutions that are considered successors to
such institutions (including successors by merger and successors under
the de facto rule explained below).
Computation
The computation of the credit amount is a two step process:
- Divide the institution’s December 31, 1996 base by the industry’s
December 31, 1996 base to obtain the institution’s 1996 Assessment
Base Ratio.
- Multiply the Assessment
Base Ratio by the aggregate credit of $4.7 billion to obtain the institution’s
credit amount.
Application
The credit is applied
only to amounts owed for deposit insurance (FDIC’s amount); it can
not be used to offset amounts owed to FICO. For most institutions
(those in Risk
Category I), the amount of
credit used in any quarter is the lower
of the amount owed for deposit insurance
or the amount of the credit available. The law establishing the
credits also included some credit use limitations. For Risk Category
I institutions,
those limitations are:
- Up to 100% offset of FDIC Premiums for debits from June 29,
2007 through March 30, 2008;
- Up to 90% offset of FDIC
Premiums for debits from June 30, 2008 through March 30, 2011;
- Up to 100% offset of FDIC
Premiums for debits from June 30, 2011 until the credit is exhausted.
For any institution
that is undercapitalized at the beginning of the assessment quarter;
certain institutions in Risk Category II (those that have a CAMELS
composite rating of 3); and most institutions
in Risk Categories III and IV, there
are statutory limitations in the usage
of the credit. The amount of credit that can be used in
any
quarter is a capped amount determined by multiplying that quarter’s
average assessment rate for all institutions by an institution’s
assessment base for the same assessment period. This information
can be found in the final
regulation for one time credits.
Accounting - Accounting guidance on the credit and other assessment-related
reporting issues can be found in the Call Report Supplemental Instructions
beginning with the Supplemental
Instructions for December 31, 2006.
Tracking -
The credit summary statement provided by FDIC with each invoice will
include beginning balance at the start of the quarter, credit acquisitions
and transfers processed during the quarter, the amount of credit
used
during the current quarter, and the ending balance of the quarter.
Exhaustion
of the One-Time Credit - Institutions
should plan for the exhaustion of their credit. Once
the credit is exhausted, an institution will pay the full FDIC
premium amount. Please see the Credit Summary attached to the invoice
for your
institution’s
remaining credit balance.
Prior period amendments -
Prior period amendments to the Report of Condition and Income (Call
Report) or Thrift Financial Report (TFR) may affect the amount of assessment
due to both the FDIC and to FICO. If the amount due to the FDIC also involves
an assessment credit, the credit amount will also be appropriately adjusted
on the upcoming invoice and the assessment credit summary statement.
Merger
transaction -
The assessment credit, if any, of an institution acquired through
merger should be reflected on your institution’s credit statement.
If it is not reflected on your institution’s credit statement,
email us at assessments@fdic.gov or
call 1-800-759-6596 (8:30 a.m. – 4:30
p.m. Eastern Time) and select - Option
2. Please have the details of the merger available – date
of transactions, names and certificate numbers of surviving and disappearing
institutions.
De
facto rule transaction -
If your institution acquired substantially all assets (at least 90%)
and assumed substantially all deposit liabilities (at least 90%)
from a transferring
institution as of the date of the transaction, your institution might
be entitled to a pro rata share of the one-time credit under
the de facto rule. To make a claim, your
institution must file a request for review of the one-time credit
within 30 days of the date
of the invoice following
the transaction. Your institution must provide documentation sufficient
to support the change sought. Please refer to FIL-93-2006 for
further guidance on filing a request for review (see part 327.36(b)
of the FDIC Rules and
Regulations). For more information, contact Tom Hesselbrock at thesselbrock@fdic.gov or
at (703) 562-6165.
Transfer of credits – If
two institutions agree to transfer any portion of the one-time
assessment credit, there is a two-step process
to complete the transfer:
- The parties must submit a written agreement, signed by representatives
of each involved institution, which specifies the dollar amount
of the credit to be transferred. In addition, they must submit documentation
to
indicate that each representative has the legal authority to bind
the institution (for example, a certification from the corporate
secretary).
This information can be submitted either via mail, fax, or email
(with pdf attachments).
- Each of the involved institutions must also complete the Transfer
Assessment Credit transaction in FDICconnect under the Assessment
Payment Information Section. Upon receipt of the FDICconnect transactions from
both institutions and the written agreement with supporting
documentation, the FDIC will review the submission and will notify the
parties
once the agreement has been recognized. For more information,
contact Donna Saulnier
at dsaulnier@fdic.gov or at (703) 562-6167.
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