Photo by Matthew G. Bisanz | CC BY-SA 3.0

If your bank has less than $5 billion in uninsured deposits, it will be exempted from a new FDIC fee being levied on the nation’s banks in order to replenish the agency’s deposit insurance fund.

The failures of Silicon Valley Bank and Signature Bank cost the FDIC around $15.8 billion after bank regulators declared that both banks’ collapses represented systemic risks to the nation’s financial system and said they would insure all deposits at both institutions.

To recoup that money, the FDIC says it plans to assess a fee on banks’ and bank holding companies’ uninsured deposits over $5 billion as of Dec. 31, 2022, equivalent to 12.5 basis points on an annualized basis. The fee would be levied over eight quarters starting in the first quarter of 2024.

In its announcement, the FDIC said its calculations showed that banks and bank holding companies with total assets over $50 billion would pay more than 95 percent of the special assessment, and that no banks with less than $5 billion in assets would be subject to the fee.

The Independent Community Bankers of America had lobbied vociferously since March’s bank failures that they be held harmless in any special assessment, arguing that they were not responsible and shouldn’t have to pay for what its CEO Rebeca Romero Rainey said were “miscalculations and speculative practices of large financial institutions,” in part because some of the nation’s largest banks were the chief beneficiaries of both rescues.

“ICBA and the nation’s community banks commend the FDIC for today’s proposal to exempt the vast majority of community banks from its special assessment following the recent failures of Silicon Valley Bank and Signature Bank of New York – which we’ve advocated since the immediate aftermath of these large bank failures,” Romero Rainey said in a statement Thursday. “The FDIC’s proposal to fully exempt community banks under $5 billion in assets and to tie assessments to applicable financial institutions’ estimated uninsured deposits recognizes the importance of distinguishing large banks that pose systemic risk to the financial system from the thousands of local community banks that serve consumers and small businesses.”

In a statement released by the FDIC, agency Chairman Martin J. Gruenberg argued that the FDIC was following established law that “requires the FDIC to consider the types of entities that benefit from any action taken or assistance provided as well as economic conditions, the effects on the industry, and other factors deemed appropriate and relevant.”

“The proposal applies the special assessment to the types of banking organizations that benefitted most from the protection of uninsured depositors, while ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits,” Gruenberg said. “The proposal also promotes maintenance of liquidity, which will allow institutions to continue to meet the credit needs of the U.S. economy.”