FDIC Proposes Easing Resolution Rules, Cutting Deposit Insurance Assessments By $4 Billion
By CU Today Staff —
WASHINGTON—The FDIC has proposed sweeping changes that would significantly reduce regulatory requirements for large banks while cutting the banking industry's annual deposit insurance assessment bill by an estimated $4 billion, or roughly one-third, marking one of the agency's most significant deregulatory initiatives under Chairman Travis Hill.
The FDIC board unanimously approved the proposals for public comment Thursday.
The agency proposed scaling back its insured depository institution resolution-planning requirements by narrowing the information large banks must provide and raising the asset threshold for institutions subject to the rule. The proposal would largely codify temporary waivers the FDIC issued in 2025, shifting the focus from lengthy "living will" narratives to operational information the agency said is most useful for resolving a failed bank. The move reverses portions of a tougher framework adopted in 2024 following the failures of Silicon Valley Bank, Signature Bank and First Republic.
In a separate proposal, the FDIC would reduce deposit insurance assessment rates for all insured institutions, reflecting the improved financial condition of the Deposit Insurance Fund. The agency also would raise and index the $10 billion asset threshold used to determine whether banks are subject to the large-bank assessment scorecard and create a new "resolution readiness adjustment" allowing qualifying large banks to receive lower assessments if they demonstrate they can quickly provide critical information needed during a resolution. According to the FDIC, the changes would reduce annual industry assessments by approximately $4 billion.
Chairman Travis Hill has argued the existing resolution-planning regime requires banks to produce lengthy, low-value submissions while imposing unnecessary costs. He has said the agency's goal is to maximize the likelihood of orderly, lower-cost resolutions by focusing on information that is actually useful during a bank failure rather than hypothetical scenarios, the ABA Banking Journal said.
Originally reported by CU Today.