Luetkemeyer, Financial Services Subcommittee Ranking Members Send Letter to FDIC

WASHINGTON, Oct. 18 -- Rep. Blaine Luetkemeyer, R-Missouri, issued the following news release on Oct. 17, 2022:

Today Congressman Blaine Luetkemeyer (MO-03), Ranking Member on the Subcommittee on Consumer Protection and Financial Institutions was joined by Congresswoman Ann Wagner (MO-02), Ranking Member on the Subcommittee on Diversity and Inclusion, Congressman Andy Barr (KY-06), Ranking Member on the Subcommittee on National Security, International Development and Monetary Policy, Congressman Bill Huizenga (MI-02), Ranking Member on the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets, and Congressman Tom Emmer (MN-06), Ranking Member on the Subcommittee on Oversight and Investigations in sending a letter regarding the Federal Deposit Insurance Corporation (FDIC) Board's proposed increase in assessment rates for all American banks.

Read key excerpts from the letter:

"We write to express concern with the FDIC Board's proposed two basis point increase in the assessment rates for all banks starting next year. An increase in assessments next year would have a negative impact on access to credit for consumers and businesses against the prospect of a troubled economic outlook. With the Federal Reserve aggressively raising interest rates and reducing its balance sheet, financial conditions are tightening considerably; this is exactly when access to safe and reliable credit matters most."

"For this very reason, Congress has specifically provided flexibility to allow the FDIC to avoid a dramatic increase in assessment rates, such as the proposed 54 percent increase. Congress intentionally extended the Federal Deposit Insurance Act to allow the FDIC an eight year restoration period to recapitalize the fund. Congress did not intend for the FDIC to aggressively increase assessment rates to recapitalize the fund, nor to target a 2.0% reserve ratio as expressed in the current proposal. It would be inconsistent with legislative language and spirit for the FDIC to do so."

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"...[W]e are concerned that an increase in the assessment rate at this time could pose real harm to consumers, particularly those with low and moderate incomes who may need access to credit. It is in their best interests to allow the fund to naturally recover over time as deposits run off. We expect the FDIC Board to take full advantage of the eight years provided in statute for restoration of its insurance fund to 1.35 percent, and refrain from imposing the proposed unnecessary assessment rate add-on. We look forward to your reply."

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View letter here: https://luetkemeyer.house.gov/UploadedFiles/OCT17_FDIC_Board_Assessments.pdf

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Original text here: https://luetkemeyer.house.gov/news/documentsingle.aspx?DocumentID=400765