The three largest banking companies in the United States are all set to help refill the Federal Deposit Insurance Corporation’s coffers after these were greatly depleted following several bank collapses earlier this year and late 2022.
In a filing made on Thursday, August 3rd, JPMorgan Chase announced its plans to contribute around $3 billion to replenish the FDIC’s fund once the regulator finalizes the governing rules for such transactions.
Likewise, Wells Fargo announced in a separate filing that it faces a special pre-tax assessment of nearly $1.8 billion once the FDIC gives the green light. The Bank of America, on the other hand, expects to face an assessment worth $1.9 billion.
What is This Special Assessment?
These special pre tax assessments were first announced by the FDIC in May of this year and involve the application of an additional fee of around 0.125% to lenders’ uninsured deposits of over $5 billion. This percentage is based on the amount of any bank’s uninsured deposits as of December 31, 2022.
It should be noted that lenders with less than $10 billion in total assets – over 4,000 smaller banks and financial agencies throughout the US – are exempted from the special assessment.
The FDIC flagship fund has been around since the 1930s, at the height of the Great Depression, and it serves to provide a proper resolution to assist fallen banks and reimburse a certain number of their customers’ accounts. However, the fund was seriously depleted earlier this year as the failure of California’s Silicon Valley Bank called for a massive payout of around $20 billion.