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Analysis of FDIC assessment shows bank cost CUNA
WASHINGTON (3/3/09)—Analyzing the Federal Deposit Insurance Corp.’s (FDIC) recently announced assessment on banks, the Credit Union National Association (CUNA) notes that bankers will pay premiums of between 32-36 basis points this year, and then pay annually between 12-16 basis points in premiums. Further, CUNA notes the banks face future, additional “special assessments,” as they are being asked to pay this year, should the FDIC require it. The FDIC has given banks seven years to make the payments intended to keep the deposit insurance fund strong. If banks were required to pay the whole amount up front, as credit unions have been asked to do to fund the National Credit Union Administration’s (NCUA) corporate stability plan, the banks’ costs would be significantly higher than that faced by credit unions. CUNA President/CEO Dan Mica said Monday that, still, the premium payment still will not be easy for banks. “So far, the banks’ first year cost is about 40% of the total cost to credit unions. After the first three years, banks will have paid as much as CUs -- and still have another four years of premium payments to go,” Mica said.


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