FDIC: There Is No Such Thing As An “FDIC Fee” To Bank Customers

Odds are that your bank is insured by the Federal Deposit Insurance Corporation, and that your bank pays a premium to the FDIC for said insurance. And while those banks may choose to pass that cost on to customers, they can’t go calling it something like an “FDIC fee.”

The FDIC has sent a letter to its insured banks to remind them of this fact. It says it has “received a number of complaints from depositors” about tacked-on fees with labels like “FDIC assessment,” “FDIC insurance premium,” or “FDIC insurance charge.”

The letter explains that these names not only mislead consumers into thinking that these fees are coming directly from the FDIC, but could also “reveal information that could be used to determine an institution’s confidential supervisory ratings.”

Additionally, some banks have referred customer questions about their fees directly to the FDIC, which does not charge the fee.

That would be like an airline referring customers to its fuel supplier to explain fuel surcharges.

Though the FDIC doesn’t name names in the letter, the Chicago Tribune took a quick look at some banks to see how they were labeling fees intended to recoup FDIC premiums.

The paper found a statement on the Bank of America website that said the bank “may charge” an “FDIC assessment based on the assessment rate the FDIC charges us… We generally calculate the FDIC assessment using the same calculation method used by the FDIC.”

A look at the Regions Bank site also found that the bank’s business checking accounts “may be subject to an FDIC fee for administrative services associated with FDIC-insured accounts.”

To clarify, the regulator states, “The FDIC does not charge (bank) customers for deposit insurance.”

Read the full PDF of the letter HERE.

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  1. Torchwood says:

    The banks can be creative with fees. I’m sure someone is thinking of having a fee for meing charged multiple fees. I think I will stick with my local major credit union.

  2. Fubish says: I don't know anything about it, but it seems to me... says:

    Bank of America. Of course, of course.

    • Blueskylaw says:

      Since corporations are considered “people”, Bunk of America
      is the biggest AS*HOLE on the FUC*ING planet!!!

    • opemily says:

      Whenever there’s an article reporting about sketchy activities of “some” banks, one of those banks is bank of america

  3. coffee100 says:

    I went into a bank to get change for a dollar once. I never knew people could be so passive-aggressive and come up with more ways to tell me to fuck off while smiling the whole time. It was remarkable.

    • Coffee says:

      Did you have an account at the bank?

    • MathMan aka Random Talker says:

      I once (allegedly) lost a dollar bet with 7 different co-workers over a sporting bet. I may have allegedly gone to the bank to get $7 in pennies to repay my alleged bet. I may have been given weird looks by the teller who handled the transaction and the manager the teller called over because the teller needed more pennies….

      At least I left the pennies in the rolls…

      What does this have to do with BoA and FDIC? Nothing. What’s worse, me sharing an irrelevant post or you reading it all the way to the end?

      • MarkFL says:

        You realize, of course, that if someone at a bank reads your post, they will impose an Irrelevant Post Reading Fee.

  4. fsnuffer says:

    It is not a fee, it is a mandate.

  5. CrazyEyed says:

    The article still fails to mention which banks other than Regions actually label this fee as an “FDIC Fee” inappropriately.

    Not defending BOA by any stretch but anytime “Bank” is mentioned, someone always jumps on the opportunity to throw BOA in there somewhere.

    • who? says:

      From the summary: “The paper found a statement on the Bank of America website that said the bank “may charge” an “FDIC assessment based on the assessment rate the FDIC charges us”

      It sounds like the article is calling BofA out specifically. Why shouldn’t the rest of us?

      • CrazyEyed says:

        FDIC doesn’t say which banks labeling the fee incorrectly as an “FDIC Fee” but the paper used BOA as a reference to see how they were labeling the fee, which was completely different than the exact context the FDIC was worried about.

        My point from before was that although BOA specifically states how it determines its fee, it doesn’t incorrectly label the fee as an “FDIC Fee,” but is still used in the story almost as if it was part of the wrongdoing.

        • who? says:

          Directly from BofA’s website: https://www3.bankofamerica.com/efulfillment/documents/32-11-5710ED.20110318.pdf

          “Bank of America may charge you an FDIC assessment
          based on the assessment rate the FDIC charges us.
          The FDIC assessment may include deposit insurance
          charges, Financing Corporation (FICO) assessments
          and other fees, charges and assessments provided
          by law. We generally calculate the FDIC assessment
          using the same calculation method used by the FDIC.
          However, we may use another method to calculate the
          FDIC assessment. This assessment rate is variable. We
          may change it at any time without notice. We display the
          amount of the FDIC assessment on your statement.”

    • SirWired says:

      Perhaps because the article DID mention BofA?

      • CrazyEyed says:

        Exactly my point. BOA didn’t call it an “FDIC fee” like Regions did. Yet it’s tossed in the news story becuase it is a big bank. They just go to BOA by default when clearly its policy on that fee is well described.

        • MarkFL says:

          Read it again. BoA calls it and “FDIC assessement.” Which it is, when they charge the bank, but it isn’t when the bank charges the customer.

  6. philpm says:

    Is there a fee for asking too many questions fee yet?

    • tbax929 says:

      I don’t know about that, but I think B of A now has a “fee fee”.

    • UberGeek says:

      Yup. Just dumped 1stBank in part because of this. They had one named something like “Excessive Customer Service Calls Fee” that triggered when you went over five calls in a month. I never incurred it, but I could imagine how a couple dropped calls, a transfer loop, or our new-fangled (poor) customer service could cause it. They assured me it was only for people that called in every day to check their balance, but you can’t trust ‘em anymore.

    • krom says:

      Most banks these days have a Teller Fee.

      I mean, you wouldn’t want the billionaire execs to actually have to pay their employees out of their own profits, now would you?

      Soon they will have a Walking On Our Carpet Fee, and an Opening Our Door Fee, and a Looking In The Direction Of A Bank Branch Fee.

      • MarkFL says:

        A bit off-topic, but since you mentioned “Walking On Our Carpet Fee”…

        As you know, pretty much every stadium charges for parking — sometimes as much as the price of a ticket. Well, BankAtlantic Center (where the Florida Panthers play) is across the street from a ginormous shopping mall. Some people make a day of it by going to the mall and then crossing the street for the game. Or they just park at the mall to avoid paying the extra $15 (price at the time of this story). So they came up with a brilliant idea — they would fence off the property and charge everyone $10 to walk in. This means that even if you dropped off the kids or took a bus to the game, you basically still got soaked for a parking fee. Or to put it another way, you had to pay admission to go to the box office and buy admission to the game.

        In the end they just raised the ticket prices because of the stink. But I think they still charge for parking.

      • opemily says:

        The enjoy our air conditioning fee

  7. There's room to move as a fry cook says:

    http://repowatch.org/2011/04/07/repo-volume-falls-as-fdic-fee-kicks-in/

    As directed by the Dodd-Frank Act, the FDIC began April 1, 2011 charging banks insurance premiums based on all of their debt, including repos, not just on their domestic deposits.

    Historically, the FDIC has based its premiums on the amount of deposits a bank holds, because it was mainly the depositors that the FDIC had to repay when a bank failed. But in the financial crisis of 2007-2008, the FDIC also had to repay repo and other shadow lenders.

    The new premiums are an effort to make sure the banks that use the riskier funding have to bear their fair share of the FDIC insurance costs.

    • krom says:

      Communist. The banks have every right to take your money and invest it in high-risk credit failure, without any resposibility or consequences. Why don’t you move to Cuba! USA! USA!

  8. TheUncleBob says:

    >Odds are that your bank is insured by the Federal Deposit Insurance Corporation, and that your bank pays a premium to the FDIC for said insurance. […] To clarify, the regulator states, “The FDIC does not charge (bank) customers for deposit insurance.”

    To clarify, the regulator meant to say “We charge the bank for deposit insurance. The bank passes that charge on to you. They’re just not allowed to tell you.”

    • There's room to move as a fry cook says:

      Great, so in the name of full disclosure let’s add a toilet paper fee, executive office remodel fee, electric bill fee, property tax fee….

      • TheUncleBob says:

        Is the Federal Government trying to say it’s illegal for a bank to list a “toilet paper fee”?

        No.

        The Federal Government is simply trying to hide their tracks, to make it virtually impossible for a regular Joe to determine how much of their paycheck actually ends up in the hands of the Federal Government. Keep people stupid and you keep people happy.

        • SirWired says:

          If banks don’t want to comply with the FDIC’s terms, they don’t have to be FDIC insured banks; FDIC membership is completely optional. They are more than welcome to refuse the insurance and go out on their own; there are depository institutions that do not provide deposit insurance.

          I suspect that the reason they don’t want this broken out in a separate fee is because it’s a “cost of doing business” that should be rolled into the interest rate.

          FYI, FDIC premiums don’t go into the treasury’s general fund; they stay with the FDIC, most of which goes into the fund for paying out insurance claims. The FDIC is backed by the feds in case it runs out of money, but the feds themselves do not collect or retain the insurance premiums.

        • krom says:

          I hope you know that you are making no sense at all.

          I think whenever some people see the word “money” it triggers a part of their brain that involuntarily forces them go on a tirade about the fact that governments with capitalist economies need money to function and why that fact is tyrrany and socialism.

          You could always just not put your money in the bank and then you don’t have to have “your money going to the government” in order to make sure your money will still be there. Me, I would prefer to know that there’s a huge pile of money keeping my bank account safe. Not to be paranoid or anything, although I think you ought to be able to understand that.

          By the way, a MUCH BIGGER PORTION of your paycheck is going into the pockets of desk-jockey golf-course Maui-summer-home bank executives than into the federal government, and they don’t exactly tell you how much goes to that, either.

          Seems to me if the bank wants to add a FDIC Insurance Fee to their bills, they should also add an Executive Golf Course Membership Fee and a Corporate Jet Fuel Surcharge. Why should the banks have to actually pay anything just to be in business? Frickin’ commies, wanting businesses to spend money!

          • MarkFL says:

            “Seems to me if the bank wants to add a FDIC Insurance Fee to their bills, they should also add an Executive Golf Course Membership Fee and a Corporate Jet Fuel Surcharge.”

            They do. They just don’t have the balls to call it that. Not yet, anyway.

            • frodolives35 says:

              The real fun will begin with the hookers and blow slush fund fee.

              • MarkFL says:

                If they charge a hooker fee and I pay it, does that mean I can deduct the fee from my taxes as a business (entertainment) expense?

        • MarkFL says:

          If I understand the article correctly, the banks can say that they are passing along the cost, they can’t call it an FDIC fee. IOW, BoA can’t say they charge:

          “an FDIC assessment based on the assessment rate the FDIC charges us… We generally calculate the FDIC assessment using the same calculation method used by the FDIC.”

          But they could say they charge:

          “an assessment based on the assessment rate the FDIC charges us… We generally calculate this assessment using the same calculation method used by the FDIC.”

          At least that’s how I read the rule. Still gets across the same point, but doesn’t imply that the FDIC is forcing the bank to charge the customer.

        • Evil_Otto would rather pay taxes than make someone else rich says:

          Time to change the tinfoil in your hat, Sparky.

      • oldwiz65 says:

        You forgot executive bonuses and bribes to the various regulatory agencies.

  9. Jesse says:

    I’m the Treasurer for a small not for profit and the bank we use assessed a FDIC Premium up until about a year ago.

  10. dolemite says:

    I’m curious as to how much these “FDIC” insurance premiums run a bank. They must be millions upon millions of dollars in order to justify pointing them out and splitting them up between millions of customers.

    • SirWired says:

      FDIC insurance currently costs anywhere from 0.025% – 0.45%, depending on the size of the bank and the current risk they are running. (This is mainly assessed by evaluating how well capitalized they are.)

  11. NorthAlabama says:

    now that b of a was busted, expect the same fees from wells fargo and citi next…

  12. yankinwaoz says:

    There should be truth in labeling clause. How about “Insurance to protect you from our gambling losses or incompetence”?

  13. soj4life says:

    So this is the bank’s way to screw with the fdic, typical.

  14. krom says:

    Pretty soon banks will charge you a Deposit Fee, Withdrawal Fee, and Money Storage Fee. Here’s hoping they don’t charge a Pen Rental Fee and tack on a Paper Surcharge for your deposit slips and receipts. I’m pretty sure there will be a Cash Presentation And Delivery fee too.

    More and more reason why you should Move Your Money Already.

    • MarkFL says:

      Um, once I had to deposit a check at Wachovia and didn’t have my checkbook with me, so I just used one of the generic deposit slips at the counter. They actually did hit me with a “counter charge.” I don’t recall how much it was — probably a dollar or two. Eventually they stopped doing that.

  15. Not Given says:

    Additionally, some banks have referred customer questions about their fees directly to the FDIC, which does not charge the fee.

    That reminds me of the time my ISP’s tech support told me to call Usenet when I complained about not being able to sign onto the news server.

  16. Lyn Torden says:

    What next? A fee disclosure fee?

  17. kaleberg says:

    This could backfire. Why deal with a bank? Call your congress critters and tell them to let you bank with the FDIC directly. Then, you’ll only have to pay an FDIC fee and not all those others. Maybe if the banks were paying interest, they might have something to offer, but I’d rather buy wholesale than retail.

  18. DZ says:

    These banks are as creative with fees as much as whomever creates names for differing lottery scratch-off tickets!