The Federal Deposit Insurance Corporation (FDIC) Board of Directors has adopted the attached revisions to the FDIC's regulation governing deposit insurance assessments. The Board believes the changes will enhance the present system by allowing institutions with improving capital positions to benefit from the improvement more quickly, while requiring those whose capital is falling to pay a higher assessment sooner. The final rule will take effect on April 1, 2000.

The changes were adopted as proposed by the Board in August 1999 (see FIL-86-99, dated September 15, 1999) with one exception. In response to a comment received on the proposal, the Board has also elected to maintain the time frame previously in place to announce changes to the assessment rate schedule.

Specifically, the Board has changed the FDIC's assessment regulation (Part 327) to:

• Base capital group determinations under the FDIC's risk-based assessment system on Call Report data for the quarter ending three months before the beginning of the assessment period, instead of the current six months (e.g., for the second semiannual assessment period of 2000, the FDIC will use capital ratios reported as of March 31, 2000, instead of December 31, 1999);
• Shorten from 30 days to 15 days the prior notice the FDIC is required to send to institutions advising them of their assessment risk classifications for the following period;
• Increase from 30 days to 90 days the time in which an institution may request a review of the assessment risk classification that the FDIC has assigned to it;
• Maintain the current notice period for changes to the assessment rate schedule; and
• Reflect administrative changes internal to the FDIC that have already taken place.

For more information, please contact James W. Thornton, Senior Banking Analyst in the Division of Insurance (DOI), at (202) 898-6707 or Richard Jones, Chief of DOI's Assessments Implementation Section, at (202) 898-6592.