FDIC Chairman Warning of Crackdown on Institutions with Low Management Scores
By BARANCIK, SCOTT
Management problems could force as many as 333 banks and thrifts to pay more for deposit insurance next year.
In an interview Monday, Federal Deposit Insurance Corp. Chairman Donna A. Tanoue said that 333 institutions have overall supervisory ratings of 1 or 2 but management ratings of 3 or worse, and thus might qualify as risky "outliers" that should pay more for the government's backing.
"We're looking at whether there are any banks or thrifts ... that might warrant a rise or increase in their premiums based on their banking practices," she said.
Most of these institutions are branded 1-A, the top rating in the nine- box matrix the FDIC uses to decide how much each institution is charged.
If the proposal goes through, some institutions currently paying nothing might end up paying 3 cents per $100 in insured deposits. Others already paying that rate might see their premiums rise to 10 cents for every $100 in insured deposits.
"If we were to use this kind of screen, each of those institutions would receive a closer look from its primary regulator," Ms. Tanoue said. The FDIC would then consult with the bank's examiner-in-charge and decide whether risk-taking and management style warranted a higher insurance premium.
The change would help address a perceived problem in the risk-based premium system. …