This section of the FEDERAL REGISTER

contains documents other than rules or

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section.

Notices Federal Register

61598 

Vol. 73, No. 201 

Thursday, October 16, 2008 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

Federal Deposit Insurance Corporation 

Restoration Plan 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Establishment of Federal 

Deposit Insurance Corporation 

Restoration Plan 

Federal Deposit Insurance Corporation 

Restoration Plan 

The recent failures of a large 

institution and other smaller ones have 

significantly increased the Deposit 

Insurance Fund’s (the DIF or the fund) 

loss provisions, resulting in a decline in 

the reserve ratio. As of June 30, 2008, 

the reserve ratio stood at 1.01 percent, 

18 basis points below the reserve ratio 

as of March 31, 2008. This is the lowest 

reserve ratio for a combined bank and 

thrift insurance fund since March 31, 

1995. The FDIC expects a higher rate of 

insured institution failures in the next 

few years compared to recent years; 

thus, the reserve ratio may continue to 

decline. Because the fund reserve ratio 

has fallen below 1.15 percent and is 

expected to remain below 1.15 percent, 

the FDIC is required to establish and 

implement a restoration plan to restore 

the reserve ratio to 1.15 percent within 

five years. 

In FDIC’s view, to restore the reserve 

ratio to 1.15 percent within five years 

will require higher assessment rates. 

Since the current rates are already 3 

basis points uniformly above the base 

rate schedule established in the 2006 

assessments rule, a new rulemaking is 

required. The FDIC is concurrently 

publishing a notice of proposed 

rulemaking that would raise rates and 

make other changes to the assessment 

system. 

Pursuant to section 7(b)(3)(E) (12 

U.S.C. 1817(b)(3)(E)), the FDIC 

establishes the following restoration 

plan on October 7, 2008. 

1. The accompanying NPR is 

published elsewhere in this issue of the 

Federal Register as soon as possible. 

Based upon the projections contained in 

the NPR, the assessment rates proposed 

in the NPR will return the Deposit 

Insurance Fund reserve ratio to at least 

1.15 percent. Absent extraordinary 

circumstances, the reserve ratio must be 

returned to at least 1.15 percent no later 

than five years after establishment of the 

plan. To determine whether the reserve 

ratio has returned to the statutory range, 

the FDIC will rely on the December 31, 

2013, reserve ratio, which is the first 

date after October 7, 2013, for which the 

reserve ratio will be known. 

2. Before the FDIC adopts a final rule 

following the NPR, it 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 five-year period, will adopt higher 

assessment rates than those proposed in 

the NPR. If consistent with the fund 

reserve ratio reaching 1.15 percent 

within the five-year period, the FDIC 

may also adopt lower assessment rates. 

3. At least semiannually thereafter, 

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 

five-year period, will increase 

assessment rates, following notice-andcomment rulemaking if required. If 

consistent with the fund reserve ratio 

reaching 1.15 percent within the fiveyear period, the FDIC may also lower 

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

4. Institutions may continue to use 

assessment credits 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. 

5. This Restoration Plan shall be 

implemented immediately upon 

establishment by the FDIC. 

Dated at Washington, DC, this 7th day of 

October, 2008. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

[FR Doc. E8–24185 Filed 10–15–08; 8:45 am] 

BILLING CODE 6714–01–P 

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