FDIC Wants Banks To Prepay Deposit Insurance

The Federal Deposit Insurance wants member banks to prepay three years worth of premiums for deposit insurance.

The recommendation Tuesday by the agency’s board would raise enough money for the FDIC to cover customer deposits at failing banks. Without the prepayment, the FDIC said it would be operating in the red by the end of September.

The proposal would raise $45 million. The FDIC estimated that the cost of bank failures could reach $100 billion by the end of 2013, a hike of $30 billion from previous estimates. About half of the expenses would be incurred by the end of this quarter, according to the agency.

Since the beginning of the year 95 banks have failed. Only 28 banks failed in the previous two years.

“This proposal is a vote of confidence for the banking industry’s resilience and will continue to recover its strength as we work through the significant challenges ahead,” Chairman Sheila C. Bair said in a statement.

Related posts:

1. FDIC Tells Banks To Pay $45 Billion in Premiums Early
2. FDIC Denies Sending E-mails To Consumers, Warns Of Phishing Scam
3. State Farm Drops Florida Homeowners Insurance — What To Do Now?
4. Bank Failures Prompt Near Record Amount Of Mortgage-Related Closings
5. Health Insurance Companies have $4.4 Billion Invested in Tobacco Production