JPMorgan Chase & Co. has announced that it expects to set aside approximately $3 billion to replenish the Federal Deposit Insurance Corporation’s (FDIC) fund once proposed rules are finalized by the bank regulator. According to a filing on Thursday, the US banking giant will be one of several financial institutions shouldering the majority of the costs to refill the fund, which was depleted by $16 billion this year after three banks collapsed.
Wells Fargo has estimated that it could face a pretax “special assessment” of up to $1.8 billion, while Bank of America has projected a potential pretax expense of about $1.9 billion once the FDIC proposal is finalized. These estimates were provided in separate filings made this week.
The proposed rule by the FDIC would implement a “special assessment” fee of 0.125% to uninsured deposits of lenders that exceed $5 billion. The fee would be based on the amount of uninsured deposits a bank held at the end of 2022.
The purpose of this rule is to replenish the FDIC’s fund, which serves to protect depositors in the event of a bank failure. The fund was significantly depleted this year due to the collapse of three major banks.
As financial institutions prepare for the potential expenses associated with the proposed rule, industry analysts speculate on the impact this could have on the banking sector as a whole. It remains to be seen how these projected costs will affect the overall financial health and stability of the affected banks.