The FDIC could make big banks pay to plug a $23 billion hole

The Federal Deposit Insurance Corporation is reportedly considering a plan to force the country’s largest banks to pay the $23 billion bill it incurred for helping depositors who put money in accounts with failed regional lenders have.

According to Bloomberg News, the FDIC is preparing a “special assessment” in May aimed at protecting a $128 billion deposit insurance fund that was raided to take deposits from collapsed lenders Silicon Valley Bank and Signature Bank of New to cover York.

The FDIC’s deposit insurance fund is maintained through assessments, or insurance premiums, that banks are billed quarterly, according to the agency’s website.

FDIC officials are said to be discussing increasing insurance premiums paid by the larger banks, including JPMorgan Chase, Wells Fargo, Bank of America and Citigroup, which are already paying billions of dollars into the fund.

Bloomberg quoted sources familiar with the discussions as saying that forcing the big banks to pay more was the “politically palatable solution”.

An FDIC spokesman referred The Post to comments from agency chairman Martin Gruenberg, who told lawmakers this week that “the FDIC will issue a draft rule for the special assessment for public comment in May 2023.”

After the collapse of Silicon Valley Bank and Signature Bank of New York, officials in the Biden administration stepped in and announced that all depositors — including those with more than the FDIC threshold of $250,000 in their accounts — would be insured.

The Biden administration has pledged that taxpayers would not bear the direct cost of the two banks’ failures.

However, other banks may need to help cover the cost of covering uninsured deposits.

Over time, these banks could pass higher costs on to customers, forcing everyone to pay more for services.

The FDIC has said it expects Signature’s failure to cost the Deposit Insurance Fund $2.5 billion.

JPMorgan Chase and 10 of the country’s largest banks have pooled a $30 billion emergency investment in First Republic Bank, the San Francisco-based lender whose shaky balance sheet has observers worried about its financial stability.

Declining confidence in smaller, local lenders has prompted panicked investors to park their money with big banks.

According to a Moody’s report quoted by Bloomberg News, in the weeks since Silicon Valley Bank and Signature Bank of New York imploded, customers have deposited a total of $120 billion in major banks, while smaller lenders have lost $109 billion.

The collapse of Silicon Valley Bank, which hit technology companies the hardest, cost the FDIC an estimated $20 billion.

Republicans on Capitol Hill expressed concern that the backstop amounted to a bailout for failed lenders who had made risky investments – with the bill for their failure being passed on to ordinary consumers in the form of additional bank fees.

Banks in rural Oklahoma “are about to pay a premium to bail out millionaires in San Francisco,” Sen. James Lankford (R-Ok.) told the Senate earlier this month.

The Post has solicited comment from JPMorgan Chase.

Wells Fargo, Citigroup and Bank of America declined to comment.

With mail wires