The FDIC has become aware that certain insured depository institutions are charging customers an “FDIC fee” or similarly described fee, apparently to compensate the depository institution for some or all of its FDIC deposit insurance assessment costs. In some cases, depository institutions have advised customers to contact the FDIC if they have questions about these fees. This Financial Institution Letter (FIL) communicates the FDIC’s concerns and expectations when depository institutions assess these types of fees.
In the past, the FDIC has advised depository institutions in published advisory opinions that the FDIC does not preclude them from passing deposit insurance costs to depositors with notice that the cost is for that purpose, as long as the cost is calculated accurately and the charge does not exceed the actual cost of insurance for a customer’s deposits. These advisory opinions pre-date risk-based pricing and are obsolete; they are withdrawn and superseded by this FIL.
Under Parts 309 and 327 of the FDIC’s Rules and Regulations, a depository institution is prohibited from disclosing supervisory or confidential information in connection with the examination and evaluation of the depository institution or the institution’s assessment risk assignment. Depository institutions that pass FDIC assessment fees to customers, and identify the fees as such, could indirectly violate this prohibition. In addition, fees labeled as “deposit insurance fees” when they are not reasonably related to the proportional cost of deposit insurance allocable to a particular customer may also mislead customers.
The FDIC also is concerned that labeling a fee as “FDIC” or “deposit insurance” or referring customers to the FDIC for an explanation of the fee may create the impression that the FDIC is requiring institutions to charge its customers the fee. The FDIC does not charge depository institutions’ customers for deposit insurance. Thus, it is inaccurate, and therefore misleading, for depository institutions to state or imply that a particular fee charged to a customer is required by the FDIC or to refer customers to the FDIC for an explanation of the fee.
Under the Federal Deposit Insurance Act, the FDIC charges depository institutions risk-based assessments to cover the costs of providing deposit insurance. How an institution decides to cover these costs, either from general revenues or by passing the costs on to customers through fees, is a business decision of the depository institution. Any fees charged, however, must not reveal confidential supervisory information (e.g., charging a fee that would allow someone to calculate the depository institutions supervisory rating or deposit insurance assessment risk assignment) or otherwise mislead or misinform customers regarding the nature of the fee or the depository institution’s deposit insurance assessment.
For these reasons, the FDIC encourages institutions to review fees charged to customers and to refrain from identifying specific fees as “deposit insurance fees,” “FDIC fees,” or other similarly described fees and from referring customers to the FDIC for an explanation of the fee. To the extent the institution chooses to charge fees to recoup deposit insurance assessment costs, it should take actions to ensure it adequately addresses the concerns set out in this FIL.