This morning federal regulators raised the fees paid by US financial institutions in attempt to raise $27 billion as an emergency fund.
The Federal Deposit Insurance Corp has had their funds massively depleted over the last 12 months and is expecting bank failures to cost $65 billion through 2013.
They noted that the total number of bank failures already seen in 2009 is up to 14, following the 25 that failed in 2008.
The FDIC plans to acquire this fund by imposing fees on the almost 8,500 financial institutions that take advantage of their service. In addition, they hope to have $0.20 for every $100 deposited in their affiliate banks. The average premium paid by banks and thrifts last year was $0.06 for every $100 deposited.
Two of the largest bank failures in US history occurred last year and the FDIC stated that there were 252 financial institutions in trouble at the end of 2008 which is up over 50% from the third quarter. They went on to highlight the fact that in the last three months of 2008 banks lost a total of $26.2 billion (approximately what they are attempting to raise with these new fees).
CD (certificate of deposit) yields are already sitting around all-time lows. Hopefully this added premium won’t have a lasting effect on savings rates for banking consumers.