WASHINGTON (Reuters) - The Federal Deposit Insurance Corporation, the chief guarantor of the U.S. banking system, on Tuesday approved a surcharge on large banks to help grow its fund for insuring deposits and resolving failed banks.
Under the rule, banks with at least $10 billion in assets will pay a surcharge of 4.5 cents per $100 of their assessment base.
The FDIC expects that will bring the ratio of the amount in its Deposit Insurance Fund to the total of insured deposits at U.S. banks to 1.35 percent in about two years.
The 2010 Dodd-Frank financial reform law changed the minimum requirement for that ratio to 1.35 percent from 1.15 percent and set a deadline of 2020 to make the increase. It also requires that large banks pay for the additional reserves.
At the end of 2015 the insurance fund's balance was $72.6 billion and the reserve ratio was 1.11 percent, according to the FDIC, which expects the ratio to hit 1.15 percent in the first half of this year.
"With these surcharges, the Deposit Insurance Fund is expected to reach the statutory minimum level ahead of the statutory deadline of 2020, reducing the risk that the FDIC will have to raise rates unexpectedly in the event of stress in the financial sector," FDIC Chairman Martin Gruenberg said in a statement.
The FDIC expects the surcharge to take effect in the second half of this year.
If the extra levy does not bring in enough to boost the ratio to 1.35 percent by the end of 2018, then the corporation will impose a shortfall assessment in 2019.
In 2011, it approved lowering the rates for regular assessments on all banks when the ratio reached 1.15 percent. That means banks with assets of less than $10 billion should have lower total levies later this year.