Written by Jasir Jawaid
The Federal Deposit Insurance Corp. has approved a final rule that reduces the deposit insurance assessment effects of participating in the U.S. Small Business Administration's Paycheck Protection Program and the Federal Reserve's Paycheck Protection Program Liquidity Facility and Money Market Mutual Fund Liquidity Facility.
Under the final rule, the FDIC will remove the effect of PPP lending in calculating an insured depository institution's deposit insurance assessment. The rule, among other changes, provides an offset to an insured depository institution's total assessment amount for the increase in its assessment base attributable to participation in the PPP and MMLF.
"The FDIC's action today will ensure that banks will not be subject to significantly higher deposit insurance assessments for participating in these programs," an FDIC statement said.
The final rule will be effective immediately upon publication in the Federal Register, with an application date of April 1, and changes will be applied to assessments starting in the second quarter.
This article was published by S&P Global Market Intelligence on the S&P Capital IQ Pro platform.
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