The Clearing House Association (TCH) filed a comment letter with the Federal Deposit Insurance Corporation (FDIC) on its proposed rule regarding changes to the deposit insurance assessment calculation methodology. In the letter, TCH reiterates its support for maintaining a robust federal deposit insurance fund (DIF), but expresses concern that the proposed rule is inconsistent with the statutory requirement that assessments be based on actual risk to the DIF. TCH also argues that adhering to the risk-based statutory mandate is essential for multiple reasons: it promotes the integrity of the DIF; it discourages excessive or undue risk-taking; it avoids subsidies; it is more fair; and it is consistent with the fundamental principles of insurance. TCH also provides a number of suggestions intended to make the changes to the assessment methodology more risk-based, including recommended changes that would: (i) permit the recognition of collateral in measuring counterparty exposure, consistent with the standardized approach adopted in the capital rules, (ii) more appropriately reflect treatment of exposures to certain kinds of CCPs, and (iii) retain the option to use an internal model methodology, which is arguably a much more risk-sensitive way to measure counterparty exposure.
You Might Also Be Interested In...
AML, Bank Secrecy Act and Sanctions BPI Submits Comment Letter to FinCEN Regarding AML Program Effectiveness
Bank Governance BPI Offers Recommendations to NY Financial Services Regulator on a Re-Proposed Regulation on Disclosure of Confidential Supervisory Information
Bank Activities and Structure BPI Calls on DOJ to Align Bank Merger Policy with Every Other Industry
Cybersecurity BPI Files Comment Letter with U.K. Banking Authorities in Response to Operational Resilience Proposals
Regulatory Reporting and Accounting BPI Submits Comment Letter to Banking Agencies on Revisions to Call Report
Consumer Affairs BPI Joins Joint Coalition Comment Letter Responding to CFPB NPR on General Qualified Mortgage Definition
More Posts by This Author
FinTech & Innovation FinTech and Big Tech Companies Want the Benefits of Banking Without the Responsibilities. Regulatory Loopholes Could Let Them Succeed.
COVID-19 Relief BPI and Joint Coalition Urge House and Senate Leadership to Address PPP Forgiveness Process
Bank Capital and Stress Testing The Farmer and the Seed Corn: Why Lowering the CCyB and Imposing Dividend Restrictions Are Opposites
AML, Bank Secrecy Act and Sanctions FinCEN Should Focus on Flexibility, Clarity and Coordination When Defining AML Effectiveness
COVID-19 Relief Loan Necessity Questionnaires -Borrower & Lender Coalition Letter to Congressional Leadership