9564 Federal Register / Vol. 74, No. 41 / Wednesday, March 4, 2009 / Notices 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

Federal Deposit Insurance Corporation 

Amended Restoration Plan 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Amendment of Federal Deposit 

Insurance Corporation restoration plan. 

On October 7, 2008, the FDIC 

established a Restoration Plan for the 

Deposit Insurance Fund (the DIF or the 

fund), which was implemented 

immediately. The Restoration Plan 

called for the FDIC to set assessment 

rates such that the reserve ratio would 

return to 1.15 percent within five years, 

which required an increase in 

assessment rates. Thus, on October 7, 

2008, the Board adopted a notice of 

proposed rulemaking (NPR) that 

proposed, among other things, to 

increase assessment rates uniformly by 

seven basis points effective January 1, 

2009, and substantially revise the 

assessment system and reset assessment 

rates effective April 1, 2009. 

The FDIC received many comments 

from industry trade groups and banks 

regarding the proposed increases in 

assessment rates. Many of the comments 

were critical of the proposed assessment 

rate increases. Several commenters 

urged the FDIC to take advantage of the 

flexibility that Congress provided to 

extend the restoration period beyond 

five years under ‘‘extraordinary 

circumstances.’’ As the trade groups and 

many other commenters noted, the law 

allows the FDIC to take longer than five 

years for the reserve ratio to reach 1.15 

percent due to ‘‘extraordinary 

circumstances.’’ 

In recognition of the current severe 

strains on banks and the financial 

system, the FDIC has concluded that the 

problems facing the financial services 

sector and the economy at large 

constitute such extraordinary 

circumstances. Since the NPR was 

published, earnings and capital levels of 

insured institutions have continued to 

decline and the credit markets remain 

under significant stress. Industry losses 

in the fourth quarter of 2008 were the 

largest in the 25 years that insured 

institutions have reported quarterly 

earnings. Given the enormous stresses 

on financial institutions and the 

likelihood of a prolonged and severe 

economic recession, the FDIC is 

amending its Restoration Plan to extend 

the restoration period, as described 

below. The assessment rates that the 

FDIC is adopting in the accompanying 

final rule reflect this extended period. 

Therefore, the FDIC amends the 

Restoration Plan adopted on October 7, 

2008, as follows: 

1. The period of the Restoration Plan 

is extended to seven years. 

2. The FDIC will have the 

accompanying final rule published in 

the Federal Register as soon as possible. 

3. In addition, the FDIC will also have 

the accompanying interim rule 

imposing a special assessment 

published in the Federal Register as 

soon as possible. Under this interim 

rule, the FDIC will impose an 

emergency special assessment equal to 

20 basis points of an institution’s 

assessment base on June 30, 2009. 

4. The FDIC projects that the rates 

adopted in the final rule combined with 

the special assessment should return the 

fund reserve ratio to 1.15 percent within 

seven years, that is, by December 31, 

2015. 

5. At least semiannually hereafter, the 

FDIC will update its loss and income 

projections for the fund and, if needed 

to ensure that the fund reserve ratio 

reaches 1.15 percent within the sevenyear period, will increase assessment 

rates, following notice-and-comment 

rulemaking if required. If consistent 

with the fund reserve ratio reaching 1.15 

percent within the seven-year period (or 

such shorter period as the FDIC may 

determine), the FDIC may also lower 

assessment rates, again following noticeand-comment rulemaking if required. 

6. Institutions may continue to use 

assessment credits (for regular quarterly 

assessments and for special 

assessments) without additional 

restriction (other than those imposed by 

law) during the term of the Restoration 

Plan, since the few remaining credits 

should have only a minimal effect on 

fund revenue. 

7. This amended Restoration Plan 

shall be implemented immediately. 

Dated at Washington DC, this 27th day of 

February, 2009. 

By order of the Board of Directors. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. E9–4582 Filed 2–27–09; 4:15 pm] 

BILLING CODE 6714–01–P