trending Market Intelligence /marketintelligence/en/news-insights/trending/tcLnsZzHGlVuNSY5Aj73IQ2 content esgSubNav
In This List

Tax bill proposes ending deductibility of FDIC premiums paid by largest banks

Blog

Banking Essentials Newsletter: September Edition, Part - 2

Video

S&P Capital IQ Pro | Unrivaled Sector Coverage

Video

S&P Capital IQ Pro | Powering Your Edge

Podcast

Street Talk Episode 81: Amid strong recovery, Banc of California hearing more M&A chatter


Tax bill proposes ending deductibility of FDIC premiums paid by largest banks

The final bill on the U.S. Congress' proposed tax overhaul includes a provision that would end the deductibility of premiums paid by the largest banks to the Federal Deposit Insurance Corp.

If passed, the bill would no longer allow any bank with more than $50 billion in total assets to deduct payments that support the FDIC's deposit insurance fund, a pool of money used by the regulator to pay back money lost by a failing financial institution.

For banking institutions with between $10 billion and $50 billion, the bill would only restrict deductions on a portion of FDIC premiums, scaled to the institution's size. The bill would block deductions on a percentage of FDIC premiums paid that is equivalent to the ratio of total consolidated assets in excess of $10 billion to $40 billion. For example, an institution with $30 billion in total consolidated assets would not be able to deduct 50% of the premiums paid to the FDIC. An institution with $45 billion in total consolidated assets would not be able to deduct 87.5% of the premiums paid to the FDIC.

The provision does not apply to institutions with less than $10 billion in total assets, meaning those institutions would still be able to deduct 100% of premiums paid to the FDIC.

If passed, the bill would apply to taxable years beginning after Dec. 31, 2017.

Congress projects budget savings of $14.8 billion through 2027 as a result of the new limitations on FDIC premium deductions.