FDIC Proposes Easing Bank Resolution Plans and Cutting Insurance Premiums
Bank resolution plans require large depository institutions to explain in advance how they could be wound down in an orderly manner if they fail, preventing losses from being passed on to the Deposit Insurance Fund. The FDIC adopted a rule on June 20, 2024, covering banks with at least $50 billion in assets. The proposed easing would therefore affect safeguards established after Silicon Valley Bank’s collapse in 2023.
On June 25, 2026, the FDIC board proposed raising the asset threshold for resolution plans from $50 billion to $100 billion, which would exempt 16 of the 48 banks currently covered. It also proposed cutting base deposit insurance assessment rates by 2 basis points for smaller banks and by 1 basis point for large and highly complex institutions, while raising the asset threshold used to determine assessment categories from $10 billion to $30 billion.
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The history behind this eventFDIC Vice Chair Proposes Technology-Led Overhaul of Bank Resolution Planning
The Federal Deposit Insurance Corporation requires large banks to prepare resolution plans in advance so authorities can quickly take control, sell assets and protect depositors if a bank fails. Vice Chair Travis Hill argues that the current system relies too heavily on lengthy documents, whose data may be outdated by the time a resolution occurs, while imposing high compliance costs on banks. He is calling for a framework centered on real-time operational data.
Hill's latest proposal would use technology to give the FDIC rapid access to up-to-date operational data when a bank nears failure while streamlining written filings. The proposal has not specified how much it could save or when it would formally take effect. The FDIC also plans to allow nonbank institutions to seek prequalification later in 2026 to bid on failed banks, broadening the pool of potential buyers and accelerating the resolution process.
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