FDIC seeks more fees from banks to insure consumer deposits

USA TODAY, October, 2008 by Sue Kirchhoff and Sandra Block

WASHINGTON -- The Federal Deposit Insurance Corp. Tuesday proposed doubling the fees it charges banks to protect consumer deposits, predicting its reserve fund could take a $40 billion hit through 2013 as more troubled lenders fail.

The FDIC insures bank deposits, including personal savings accounts and certificates of deposit. A sweeping financial rescue law enacted last week temporarily raises the limit on FDIC-covered accounts to $250,000 from $100,000. The increase is in effect until the end of 2009.

Tuesday's proposal would cut banks' pretax income by about 5.6%, according to the FDIC. Still, the agency didn't use its full legal authority to build up an even more robust trust fund balance.

"The U.S. banking industry has the willingness and capacity to provide the necessary backing to the insurance fund," said FDIC Chairman Sheila Bair. "The public can be sure that we will always have enough ...