Letter to Stakeholders, First Quarter 2008
Sheila C. Bair, Chairman
Federal Deposit Insurance Corp.
Washington, D.C.
www.fdic.gov
On May 1, the Federal Deposit Insurance Corporation released its “Letter to Stakeholders” which highlights the agency’s activities and accomplishments during the first quarter of 2008. According to FDIC’Chairman Sheila C. Bair,’“Despite the difficulties stemming from the decline in housing prices, mortgage sector problems, and a slowdown in the economy, the Deposit Insurance Fund (DIF) remains financially strong with 99 percent of FDIC-insured institutions well-capitalized at year-end 2007. We are focusing our attention on maintaining the safety and soundness of the institutions we insure and are prepared to move promptly to handle any bank failures that may occur.”
Highlights of the FDIC Priorities:
Depositor Protection
• The FDIC received its sixteenth consecutive set of unqualified audit opinions on the financial statements for the DIF and FSLIC Resolution Fund from the Government Accountability Office.
• The DIF earned assessment income of $643 million in 2007. The FDIC estimates assessment income earned of $448 million in the first quarter of 2008. The FDIC board of directors voted to keep the assessment rates charged to insured financial institutions unchanged for 2008.
• During the first quarter of 2008, DIF’s contingent liability for anticipated failures increased by $459 million to $583 million at quarter end.
• The FDIC released a new comprehensive resource -’FDIC Guide to Calculating Deposit Insurance Coverage on Revocable and Irrevocable Trusts.
• The FDIC issued a Financial Institution Letter - Managing Commercial Real Estate Concentrations in a Challenging Environment.
• The FDIC plans to increase staffing in the Division of Resolutions and Receiverships by up to 60 percent to handle a likely increase in bank failures and to prepare for expected retirements in the division’s workforce.
Mission Support
• The FDIC is strongly encouraging state nonmember institution mortgage servicers to report their loan modification and foreclosure prevention efforts through HOPE NOW Alliance, and to support the efforts of the State Foreclosure Prevention Working Group.
• In response to changing economic conditions, the FDIC increased the frequency of its special examination activities, including targeted reviews of selected issues conducted between regularly scheduled examinations, and activities conducted in cooperation with other federal banking agencies. • The FDIC has also continued to increase the number of field examiners to accommodate increasing workload,
• The FDIC selected 31 banks to participate in a two-year pilot program to help the agency identify best practices in affordable small-dollar loan programs that can be replicated by other financial institutions.
• The FDIC’s Advisory Committee on Economic Inclusion convened to discuss asset building opportunities for individuals and banks, focusing on how banks can profitably help consumers save and approaches the FDIC can use to encourage banks to adopt innovative asset building programs.
Selected Key Indices
• At year end 2007, the FDIC reported 76 problem banks with assets totalling $22.2 billion compared to 50 problem banks and $8.3 billion in assets at year end 2006.
• Total number of FDIC supervised institutions at March 31, 2008: 5,192; total insured institutions: 8,544
• Bank examinations: safety and soundness 623 (increase of 5.2% over 2007); compliance and CRA 430 (decrease of 6.9% over 2007).
For a complete review of the “Letter to Stakeholders” or to learn more about the FDIC, visit www.fdic.gov”.
