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Abstract: 

On May 1, 2023, the FDIC released a Report on “Options for Deposit Insurance Reform” (the “Report”). The Report seeks to accomplish three key objectives: First, it provides context for the problems that led to recent bank failures; next, it reviews the history of the FDIC’s changes to the U.S. deposit insurance system and discusses policy objectives of deposit insurance; and finally, it proposes policy options to improve and increase deposit insurance coverage. Financial institutions of all sizes may want to consider participating in the ongoing discussion on potential changes to the treatment of uninsured deposits — particularly given that such changes may affect deposit insurance assessments for all banks. In this article, we highlight key points from the Report and discuss important takeaways for insured depository institutions.

Keywords: Targeted Coverage; Uninsured Deposits; Silvergate Bank, SVB, and Signature Bank Failures

Affiliations:  1: Mayer Brown LLP; 2: Mayer Brown.