Would a bank pay an assessment under the Debt Guarantee Program for newly issued interbank CDs as well as regular deposit insurance premiums? Isn this a “double-assessment?
Institutions will not be assessed under the Debt Guarantee Program on amounts in interbank CDs that are otherwise insured on the date the CD is issued. Whether a CD is otherwise insured will be determined by first applying deposit insurance to all existing deposits owed to the holder of the CD in the same right and capacity. For example, if Bank A issues a $500,000 CD to Bank B, Bank A will be assessed on only $250,000 under the Debt Guarantee Program, assuming Bank B has no other deposits at Bank A. However, if Bank B already has an existing $250,000 interest bearing transaction account when Bank A issues the $500,000 CD to Bank B, Bank A will be assessed on the full $500,000 CD under the Debt Guarantee Program. Institutions will be required to provide the FDIC with a good faith estimate of the amount of interbank CDs that are uninsured.
Related Questions
- Assuming that a bank or thrift is participating in the Debt Guarantee Program, does a CD that it issues to a bank through a broker qualify for the guarantee on senior unsecured debt?
- Would a bank pay an assessment under the Debt Guarantee Program for newly issued interbank CDs as well as regular deposit insurance premiums? Isn this a "double-assessment?
- If I already use the Bank Draft program, what happens if I pay my bill with Ebill?
