[Federal Register Volume 60, Number 32 (Thursday, February 16, 1995)]
[Proposed Rules]
[Pages 9266-9270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3669]
[[Page 9265]]
_______________________________________________________________________
Part VII
Federal Deposit Insurance Corporation
_______________________________________________________________________
12 CFR Part 327
Assessments; Retention of Existing Rate Schedule for SAIF Member
Institutions and New Rate Schedule for BIF Member Institutions;
Proposed Rules
Federal Register / Vol. 60, No. 32 / Thursday, February 16, 1995 /
Proposed Rules
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 327
RIN--3064-AB59
Assessments; Retention of Existing Assessment Rate Schedule for
SAIF Member Institutions
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Proposed rule.
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SUMMARY: Based upon the results of its semiannual review of the
recapitalization of the Savings Association Insurance Fund (SAIF) and
of the SAIF assessment rates, the Board of Directors of the FDIC
(Board) proposes to retain the existing assessment rate schedule
applicable to SAIF-member institutions. The effect of this proposal
would be that the SAIF assessment rate to be paid by SAIF members would
continue to range from 23 cents per $100 of domestic deposits to 31
cents per $100 of domestic deposits, depending on risk classification.
Through this proposed rulemaking, the FDIC is soliciting comments on
all aspects of its proposal to retain the existing assessment rate
schedule applicable to SAIF-member institutions.
DATES: Written comments must be received by the FDIC on or before April
17, 1995.
ADDRESSES: Written comments shall be addressed to the Office of the
Executive Secretary, Federal Deposit Insurance Corporation, 550 17th
Street, N.W., Washington, D.C. 20429. Comments may be hand-delivered to
Room F-400, 1776 F Street, N.W., Washington, D.C., on business days
between 8:30 a.m. and 5:00 p.m. (FAX number: 202/898-3838). Comments
will be available for inspection in Room 7118, 550 17th Street, N.W.,
Washington, D.C. between 9:00 a.m. and 4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT: James R. McFadyen, Senior Financial
Analyst, Division of Research and Statistics (202/898-7027), Federal
Deposit Insurance Corporation, Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
I. Background: SAIF Assessment Rates
Section 7(b) of the Federal Deposit Insurance Act (FDI Act) (12
U.S.C. 1817(b)) requires that, if the SAIF reserve ratio is below the
designated reserve ratio of 1.25 percent, the FDIC shall set
assessments to increase the reserve ratio to the designated reserve
ratio.\1\ Section 7(b) of the FDI Act also requires a minimum SAIF
assessment that is at least as much as would be raised by an average
assessment rate of 18 basis points. The minimum assessment requirement
is in effect as long as the SAIF is not fully capitalized or has
outstanding borrowings under section 14 of the FDI Act. If either of
these two conditions exists as of January 1, 1998, the minimum
assessment requirement increases to a rate of 23 basis points.
[[Page 9266]]
\1\Currently, there is no recapitalization schedule for the SAIF
mandated by statute. However, as of January 1, 1998, the Board is
required to promulgate a recapitalization schedule that achieves the
designated reserve ratio within 15 years, except that the Board may
extend the recapitalization date to one which ``will, over time,
maximize the amount of semiannual assessments received by the SAIF,
net of insurance losses incurred by the Fund''.
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In order to achieve SAIF recapitalization, the FDIC Board of
Directors (Board) adopted a risk-related assessment matrix in September
1992 (see Table 1) which has remained unchanged. Previously, in
deciding against changes in the SAIF assessment rate, the Board has
considered the SAIF's expected operating expenses, case resolution
expenditures and income under a range of scenarios. The Board also has
considered the effect of an increase in the assessment rate on SAIF
members' earnings and capital. When first adopted, the assessment rate
schedule yielded a weighted average rate of 25.9 basis points. With
subsequent improvements in the industry and the migration of
institutions to lower rates within the assessment matrix, the average
rate has declined to 24 basis points (based on risk-based assessment
categories as of January 1, 1995 and the assessment base as of
September 30, 1994--see Table 2).
Table 1.--SAIF-Member Assessment Rate Schedule For the First Semiannual
Assessment Period of 1995
[Basis points]
------------------------------------------------------------------------
Supervisory
subgroup
Capital group --------------------
A B C
------------------------------------------------------------------------
Well capitalized................................... 23 26 29
Adequately capitalized............................. 26 29 30
Undercapitalized................................... 29 30 31
------------------------------------------------------------------------
Table 2.--SAIF-Member Assessment Rate Distribution As of September 30, 1994*
[Billions of dollars]
----------------------------------------------------------------------------------------------------------------
Supervisory subgroup
-----------------------------------------------------
Capital group A B C
-----------------------------------------------------
Amount Percent Amount Percent Amount Percent
----------------------------------------------------------------------------------------------------------------
Well capitalized........... Number................... 1,585 85.6 139 7.5 35 1.9
Assets................... $526.5 70.7 $109.9 14.8 $20.4 2.7
Base..................... 386.6 72.3 74.5 13.9 15.3 2.9
Adequately capitalized..... Number................... 28 1.5 34 1.8 21 1.1
Assets................... $25.5 3.4 $22.0 3.0 $32.9 4.4
Base..................... 15.7 2.9 15.9 3.0 21.5 4.0
Under capitalized.......... Number................... 0 0.0 0 0.0 10 0.5
Assets................... $0.0 0.0 $0.0 0.0 $7.4 1.0
Base..................... 0.0 0.0 0.0 0.0 5.7 1.1
----------------------------------------------------------------------------------------------------------------
*``Base'' is the amount of deposits subject to SAIF assessments.
The primary source of funds for the SAIF is assessment revenue from
SAIF-member institutions. Since the creation of the fund and through
the end of 1992, however, all assessments from SAIF-member institutions
were diverted to other needs as required by the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (FIRREA).2 Only
assessment revenue generated from Bank Insurance Fund (BIF) member
institutions that acquired SAIF-insured deposits under section 5(d)(3)
of the FDI Act (12 U.S.C. 1815(d)(3)) (so-called ``Oakar'' banks) was
deposited in the SAIF throughout this period. [[Page 9267]]
\2\From 1989 through 1992, more than 90 percent of SAIF
assessment revenue went to the FSLIC Resolution Fund (FRF), the
Resolution Funding Corporation (REFCORP) and the Financing
Corporation (FICO).
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SAIF-member assessment revenue began flowing into the SAIF on
January 1, 1993. However, the Financing Corporation (FICO) has a
priority claim on SAIF-member assessments in order to service FICO bond
obligations. Under existing statutory provisions, FICO has assessment
authority through 2019, the maturity year of its last bond issuance. At
approximately $779 million per year, the FICO draw is substantial,
representing nearly 45 percent of estimated assessment revenue for
1995, or 11 basis points of the average assessment rate of 24 basis
points. The SAIF had a balance of $1.8 billion (unaudited) on December
31, 1994. With primary resolution responsibility residing with the
Resolution Trust Corporation (RTC), there have been few demands on the
SAIF, but the authority of the RTC to place failed thrifts in
conservatorship or establish receiverships expires June 30, 1995.
In addition to assessment revenues and investment income, there are
at least two other potential sources of funds for the SAIF. First, the
FDIC has a $30 billion line of credit available with the Department of
the Treasury (Treasury) for deposit insurance purposes, although the
SAIF has required no extension of credit. Second, the Resolution Trust
Corporation Completion Act (RTCCA) authorized the appropriation of up
to $8 billion in Treasury funds to pay for losses incurred by the SAIF
during fiscal years 1994 through 1998, to the extent of the
availability of appropriated funds and provided that certain
certifications are made to the Congress by the Chairman of the FDIC.
Among these, the Chairman must certify that the FDIC Board has
determined that:
(1) SAIF members are unable to pay additional semiannual
assessments at the rates required to cover losses and to meet the
repayment schedule for any amount borrowed from the Treasury for
insurance purposes under the FDIC's line of credit without adversely
affecting the SAIF members' ability to raise capital or to maintain
the assessment base; and
(2) An increase in assessment rates for SAIF members to cover
losses or meet any repayment schedule could reasonably be expected
to result in greater losses to the Government.
The RTC's resolution activities and the thrift industry's
substantial reduction of troubled assets in recent years have resulted
in a relatively sound industry as the July 1, 1995 date for SAIF
resolution responsibility approaches. However, with a balance of $1.8
billion beginning 1995, the SAIF does not have a large cushion with
which to absorb the costs of thrift failures. The FDIC has
significantly reduced its projections of failed-thrift assets for 1995
and 1996, but the failure of a single large institution or an economic
downturn leading to higher than anticipated losses could render the
fund insolvent.
Furthermore, there may soon be a substantial differential between
BIF and SAIF premiums. The BIF is expected to be recapitalized during
1995, at which time BIF premiums can be reduced far below current
levels. Largely due to the FICO obligation, the SAIF is not likely to
be recapitalized until 2002 (this projection is discussed below in
section III). A premium differential may have adverse consequences for
SAIF members, including reduced earnings and an impaired ability to
raise funds in the capital markets. Among the weakest thrifts, this
differential could result in competitive pressures that would lead to
additional failures. An analysis over a five year time span suggests
that any such increase in failures is likely to be sufficiently small
as to be manageable by the SAIF under current interest-rate and asset
quality conditions. Moreover, the analysis indicates that under harsher
interest-rate and asset-quality assumptions, these economic factors
would have a significantly greater effect on SAIF-member failure rates
than would a premium differential.
While the premium differential is not expected to lead to
significant failures in the near term, it may lead to other adverse
results. A premium differential would also create a powerful incentive
for SAIF-insured institutions to minimize premium costs by shrinking
the base against which assessments are levied (currently domestic
deposits). This can be accomplished, despite the moratorium on
conversions of SAIF-insured deposits to BIF-insured deposits at these
institutions, by substituting nondeposit liabilities for SAIF-insured
deposits. These nondeposit liabilities are readily available and
include Federal Home Loan Bank (FHLB) advances and reverse repurchase
agreements. The net result could be an acceleration of the shrinkage of
the assessment base, thereby reducing assessment revenue. This could
threaten the ability to service the FICO obligation sometime near or
after the year 2000 and, over the longer term, frustrate the
capitalization of the SAIF. As shown in the following table, the
assessment base has been declining steadily since the fund was
established in 1989, although the decline was at a slower rate in 1994.
Table 3.--SAIF Assessment Base and Insured Deposits*
[Dollar amounts in billions]
----------------------------------------------------------------------------------------------------------------
Est. Insured
Assessment base Percent change deposits Percent change
----------------------------------------------------------------------------------------------------------------
1989............................ $950.3 $882.9 6.0
1990............................ 877.7 -7.6 830.0 -6.0
1991............................ 820.2 -6.5 776.4 -6.5
1992............................ 760.5 -7.3 729.5 -6.0
1993............................ 729.4 -4.1 695.6 -4.6
1994............................ 716.3 -1.8 687.3 -1.2
----------------------------------------------------------------------------------------------------------------
*Includes conservatorships and Sasser institutions; adjusted for Oakar deposits. End-of-period domestic deposits
are used to approximate the SAIF assessment base. The actual assessment base may be slightly less than
domestic deposits due to float adjustments, but period-to-period changes should be similar. Table 3 presents
end-of-period figures (the comparable table in earlier proposals used averages) to reflect the quarterly
billing system which becomes effective the second quarter of 1995.
[[Page 9268]] The FDIC's Legal Division has opined that SAIF
assessments paid by BIF-member Oakar banks should remain in the SAIF
and are not subject to FICO draws.3 Further, the Legal Division
has opined that SAIF assessments paid by any former savings association
that (i) has converted from a savings association charter to a bank
charter, and (ii) remains a SAIF member in accordance with section
5(d)(2)(G) of the FDI Act (12 U.S.C. 1815(d)(2)(G)) (a so-called
``Sasser'' bank), are likewise not subject to draws by FICO.4 On
September 30, 1994, BIF-member Oakar banks held 23.3 percent of the
SAIF assessment base (see Table 4), and SAIF-member Sasser banks held
an additional 6.9 percent. While the pace of Oakar acquisitions is
likely to slow substantially as RTC resolution activity winds down in
1995, Oakar deposits may continue to grow at the same rate as BIF-
member deposits and become a greater proportion of the SAIF assessment
base.5 This has the potential result of SAIF's having insufficient
assessments to cover the FICO obligation. The rate of Sasser
conversions is difficult to predict and is partially dependent on state
laws, but any future conversions would also decrease the proportion of
SAIF assessment revenues available to FICO. These factors are
considered in the projections of SAIF's recapitalization in section
III.
\3\See Notice of FDIC General Counsel's Opinion No. 7, 60 FR
7055 (Feb. 6, 1995).
\4\Id.
\5\Under section 5(d)(3) of the FDI Act, as amended by FDICIA,
SAIF-insured deposits acquired by a BIF member are adjusted annually
by the acquiring institution's overall deposit growth rate
(excluding the effects of other mergers or acquisitions).
Table 4.--SAIF-Insured Deposits Held by BIF-Member Oakar Banks as a
Percent of SAIF Member Domestic Deposits*
------------------------------------------------------------------------
Year Percent
------------------------------------------------------------------------
1991.................................................... 7.5
1992.................................................... 9.7
1993.................................................... 18.4
9/94.................................................... 23.3
------------------------------------------------------------------------
*End-of-period figures; domestic deposits are adjusted for Oakar
deposits.
II. Condition and Performance of SAIF-Member Institutions
SAIF-member institutions numbered 1,869 on September 30, 1994,
including 1,794 thrift institutions and 75 commercial banks.6
While the total number of institutions is down from year-end 1993,
there is evidence of a growing industry. For the first three quarters
of 1994, these institutions increased their total assets by $6.8
billion (0.9 percent) based on loan growth of $6.3 billion. Total
capital grew at an even faster pace for the nine months, raising the
equity-to-assets ratio to 7.90 percent from 7.74 percent. The industry
continued to pare troubled assets during 1994. Noncurrent loans and
other real estate owned declined from 1.91 percent of total assets at
the beginning of 1994 to 1.43 percent by September 30.
\6\Excluding RTC conservatorships and one self-liquidating
institution.
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The industry earned a return on assets of 0.62 percent for the
first three quarters of 1994. While this is less than the ROA of 0.72
percent earned in 1993, the earlier year included large one-time
accounting gains. Also, some institutions incurred large restructuring
charges in 1994 in order to dispose of troubled assets, which has
positioned them for higher profits in subsequent periods. Earnings in
1994 were hampered by smaller net interest margins, which fell from
3.35 for all of 1993 to 3.24 for the first nine months of 1994. In the
rising interest-rate environment, institutions' funding costs rose
faster than asset yields, although institutions with higher proportions
of adjustable-rate mortgages should be able to reprice a portion of
these loans within six months.
This discussion has focused on the improving condition of the SAIF-
member thrift industry, but any such discussion must mention the
relatively weak economic conditions still confronting a large segment
of the industry. Twenty-three percent of all SAIF member's total assets
are concentrated in the nation's seven largest thrift institutions, all
of which are headquartered in California. This state, in general, has
lagged behind most of the nation in recovering from the most recent
recession, and many California thrifts have significant exposure in the
weakest areas of southern California. Additionally, a few large
institutions have raised supervisory concerns due to low earnings and
relatively high levels of risk in their loan portfolios. Consequently,
despite the improving health of the thrift industry, the SAIF still
faces significant risk relative to the fund's current reserve level.
The current assessment rate schedule for SAIF-member institutions
has a spread of 8 basis points from the lowest rate to the highest
rate, dependent on supervisory factors and capitalization. A proposed
assessment rate schedule for BIF-member institutions would increase the
spread for BIF members from the current 8 basis points to 27 basis
points. This would be accomplished by maintaining the current maximum
rate of 31 basis points and dropping the minimum, most favorable rate
to 4 basis points. Thus, the weakest BIF members would incur no
additional deposit insurance cost. In order to apply a similar 27-basis
point spread to SAIF members, it would be necessary to raise the
highest SAIF assessment rate to 45 to 50 basis points (based on a
lowest rate of 18 to 23 basis points). Because 85 percent of SAIF
members would continue to pay the lowest rate, the revenue benefit of a
27-basis point spread would be limited. However, a spread of that
magnitude could have significant adverse consequences for the SAIF by
greatly increasing expenses of its weakest members and, in all
likelihood, causing additional failures.
III. New Projections for the SAIF
In November 1994, the FDIC's interdivisional Bank and Thrift
Failure Working Group (Working Group) estimated failed SAIF-insured
institution assets at $3 billion for 1995 and $2 billion for 1996. The
1995 estimate of $3 billion is based on the FDIC Division of
Supervision's projected failure of specific institutions that likely
would occur in the second half of the year, when SAIF assumes
resolution responsibility from the RTC. The 1995 and 1996 estimates
were used in updating the Division of Research and Statistics'
projections of failed thrift assets, the fund balance and reserve
ratios.
The updated projection indicates the SAIF reserve ratio will reach
1.25 percent in 2002, which is unchanged from the previous projection.
Also, this projection indicates the fund will not encounter problems
meeting the FICO obligation through 2012, the last year of the
projection. The results are shown in Table 5.
The following assumptions were used:
Failed-institution assets are based on the Working Group's
estimates for 1995 ($3 billion) and 1996 ($2 billion). Beyond 1996, the
assumed failed-asset rate for SAIF will be 22 basis points, or about $2
billion per year. This is lower than the historical loss rate for the
BIF because of the thrift industry's current low level of problem
assets.
The nominal loss rate on failed thrift assets will be 13
percent.
The asset growth rate for SAIF members will be zero, based
on the industry's recent experience.
The SAIF assessment base will continue to shrink, at 2
percent per year. Under current conditions, the assessment base for
better capitalized thrifts is expected to be stable. Deposit shrinkage
was more prevalent at weaker thrifts during periods when some better-
managed thrifts experienced deposit growth.7 However, the
emergence of a BIF/SAIF premium differential may encourage less
reliance on SAIF-assessable liabilities. The higher overall shrinkage
rates of recent years are not expected to continue because a
significant portion of the shrinkage was due to depositor flight from
the declining or low deposit interest rates which prevailed from 1990
to the latter part of 1994. Another portion of the shrinkage can be
attributed to deposit runoff at conservatorships and weakened thrifts.
[[Page 9269]]
\7\Deposit Flows at SAIF- and BIF-Insured Institutions: December
1988 to September 1992, Policy Research Division, Office of Thrift
Supervision, January 1993.
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The Oakar deposit purchase rate will be zero, but Oakar
deposits will grow at 2 percent per year, the estimated growth rate for
BIF-member deposits. Under FDICIA, Oakar deposits are adjusted annually
by the acquiring institution's overall deposit growth rate. A
significant portion of Oakar deposits were acquired from the RTC, and
these opportunities have all but disappeared. The Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 authorizes a
bank holding company to acquire out-of-state banks beginning September
29, 1995, and authorizes a bank to establish de novo out-of-state
branches beginning June 1, 1997 if the host state expressly permits
interstate branching through the establishment of de novo branches.
Thus, banks may no longer be confined to the acquisition of failed or
failing charters to enter states previously closed to them.
The average assessment rate will be 24 basis points until
the SAIF is recapitalized, after which assessment rates are reduced to
the level necessary to maintain the reserve ratio at 1.25 percent.
Table 5.--SAIF Fund Balance and Reserve Ratio Projections
------------------------------------------------------------------------
Fund balance ($ billions) Reserve ratio*
-------------------------------------------------------
Year-end 9/94 1/95 current
9/94 1/95 current Projection projection
Projection projection** (percent) (percent)
------------------------------------------------------------------------
1994........ $2.2 $1.8 0.31 0.26
1995........ 2.9 2.4 0.43 0.35
1996........ 3.7 3.3 0.55 0.49
1997........ 4.4 4.1 0.67 0.61
1998........ 5.1 4.8 0.79 0.74
1999........ 5.7 5.6 0.92 0.86
2000........ 6.4 6.5 1.05 1.00
2001........ 7.1 7.3 1.19 1.14
2002........ 7.3 8.0 1.25 1.25
2003........ 6.8 7.9 1.25 1.25
2004........ 7.0 7.8 1.25 1.25
2005........ 6.8 7.8 1.25 1.25
2006........ 6.7 7.7 1.25 1.25
2007........ 6.5 7.7 1.25 1.25
2008........ 6.4 7.6 1.25 1.25
2009........ 6.3 7.6 1.25 1.25
2010........ 6.2 7.6 1.25 1.25
2011........ 6.0 7.5 1.25 1.25
2012........ 5.9 7.5 1.25 1.25
------------------------------------------------------------------------
*After reaching 1.25 percent of insured deposits, the fund balance is
maintained at 1.25 percent of insured deposits.
**The estimated year-end 1994 fund balance is less than was shown for
September because of loss reserves set aside in the fourth quarter.
The 1/95 projected fund balance incorporates an Oakar deposit growth
factor, whereas the 9/94 projection did not.
As stated earlier, the Board has the authority to reduce SAIF
assessment rates to an average of 18 basis points until January 1,
1998, at which time the average rate would rise to 23 basis points
until recapitalization occurs. Projections made under this scenario
(and using the same other assumptions as above) indicate that the SAIF
would recapitalize in 2004, or two years later than under the existing
rate schedule.
IV. FDIC Proposal Regarding SAIF-Member Assessment Rates
Given the fund's relatively low balance and the imminent transfer
of resolution authority from the RTC to the SAIF on July 1, the SAIF
must be built as quickly as possible to its mandated reserve level. It
is recognized that a differential between BIF and SAIF premiums could
adversely affect some SAIF members, but the thrift industry has
demonstrated its ability to generate additional capital and reduce
troubled assets while paying deposit insurance premiums at the current
levels. Also, a shrinking assessment base is producing declining
revenue, which would be cut even further by lower assessment rates. The
FDIC staff has recommended that assessment rates within the risk-
related assessment rate matrix remain at their current levels for the
second semiannual assessment period of 1995. The Board believes that
the minimum rate should not be reduced from the current 23 basis
points, and that an increase in the current spread of 8 basis points
from the lowest to the highest assessment rates would adversely impact
weakened institutions already in danger of failure.
V. Summary
Under the existing SAIF assessment rate schedule, which yields an
average assessment rate of 24 basis points, the fund is projected to
recapitalize in the year 2002, which is unchanged from prior
projections. The Board has the authority to reduce SAIF assessment
rates to 18 basis points until January 1, 1998, after which the average
rate must remain at 23 basis points or higher until recapitalization is
achieved. Reducing the average rate to 18 basis points is presently
projected to delay SAIF recapitalization for two years, until 2004.
Although the industry is relatively healthy, FDIC staff has recommended
[[Page 9270]] that the Board retain the existing assessment rate
schedule for the second semiannual assessment period of 1995 so that
recapitalization is accomplished as soon as possible. The SAIF had an
estimated balance of $1.8 billion (unaudited) at year-end 1994, and
SAIF assumes resolution responsibility from the RTC on July 1, 1995.
Although estimated failed-institution assets appear manageable for 1995
and 1996, the SAIF remains vulnerable in the short run to a single
large-institution failure and to any significant increase in
anticipated loss rates.
VI. Request for Public Comment
Based upon the results of its semiannual review of the
recapitalization of the SAIF and of the SAIF assessment rates, the FDIC
is inclined to retain the existing assessment rate schedule applicable
to SAIF-member institutions. The FDIC wishes to have the benefit of
public comment before ending its review for this period, however. The
FDIC therefore requests comment as to whether it is appropriate for the
FDIC to retain the existing assessment rate schedule applicable to
SAIF-members, or whether the rates should be lowered to the statutory
minimum of 18 basis points or some point in between. The FDIC is
interested in receiving analyses exploring the impact a differential
between BIF and SAIF premiums might have on SAIF members, and the FDIC
invites comment as to whether the current spread of 8 basis points from
the lowest to the highest assessment rates should be retained for SAIF
members. The FDIC solicits comment as to how lower SAIF rates would
impact current efforts to recapitalize the SAIF. The FDIC further
invites comments as to whether current rates are sufficient to
recapitalize the SAIF in an expeditious manner.
VII. Paperwork Reduction Act
No collection of information pursuant to section 3504(h) of the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) are contained
in this proposed rule. Consequently, no information has been submitted
to the Office of Management and Budget (OMB) for review.
VIII. Regulatory Flexibility Analysis
The Board hereby certifies that the proposed rule would not have a
significant economic impact on a substantial number of small entities
within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601, et
seq.). This proposed rule will not necessitate the development of
sophisticated recordkeeping or reporting systems by small institutions
nor will small institutions need to seek out the expertise of
specialized accountants, lawyers, or managers to comply with this
proposed rule. Therefore, the provisions of that Act regarding an
initial and final regulatory flexibility analysis (Id. at 603 and 604)
do not apply here.
List of Subjects in 12 CFR Part 327
Assessments, Bank deposit insurance, Banks, Banking, Financing
Corporation, Savings associations.
For the reasons set forth in the preamble, the Board of Directors
of the Federal Deposit Insurance Corporation proposes to amend part 327
of title 12 of the Code of Federal Regulations as follows:
PART 327--ASSESSMENTS
1. The authority citation for part 327 continues to read as
follows:
Authority: 12 U.S.C. 1441, 1441b, 1817-1819.
2. Paragraph (c)(1) of Sec. 327.9 as added at 59 FR 67165,
effective April 1, 1995, will be retained without change. The text of
paragraph (c)(1) is republished for the convenience of the reader to
read as follows:
Sec. 327.9 Assessment rate schedules.
* * * * *
(c) SAIF members. (1) Subject to Sec. 327.4(c), the annual
assessment rate for each SAIF member shall be the rate designated in
the following schedule applicable to the assessment risk classification
assigned by the Corporation under Sec. 327.4(a) to that SAIF member
(the schedule utilizes the group and subgroup designations specified in
Sec. 327.4(a)):
Schedule
------------------------------------------------------------------------
Supervisory
subgroup
Capital group --------------------
A B C
------------------------------------------------------------------------
1.................................................. 23 26 29
2.................................................. 26 29 30
3.................................................. 29 30 31
------------------------------------------------------------------------
* * * * *
By the order of the Board of Directors.
Dated at Washington, D.C., this 31 day of January, 1995.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 95-3669 Filed 2-15-95; 8:45 am]
BILLING CODE 6714-01-P
