PRLog (Press Release) -
Aug 05, 2009 -
SAN ANSELMO, Calif. – A new analysis from Market Rates Insight (MRI, www.marketratesinsight.com)
, a leading research firm that tracks rates for deposits, loans, and fees to help financial institutions price with precision, shows that banks are lowering deposit rates on CDs and money market accounts following the enactment of the FDIC Special Assessment. For the month prior to June 30, when the FDIC Special Assessment took effect, there was no change in the cumulative national average rate for deposit products (0.00), however the average national APY has dropped 10 bps (-0.10) by July 31.
“The timing and the amount of change in the national average rate of deposits makes it very probable that institutions are underwriting the FDIC Special Assessment with lower cost of funds for deposit products,” said Dr. Dan Geller, Executive Vice President for Market Rates Insight.
On May 22, 2009, the FDIC Board of Directors adopted a final rule establishing a 5 basis point special assessment on each insured depository institution’
s assets minus Tier 1 capital as of June 30, 2009, which is the date that deposits rates started their sharp decline. Also, the amount of the special assessment for any institution, which was set at a maximum of 10 basis points, corresponds well with the cumulative drop in the national average rate since June 30, 2009.
Copies of MRI’s weekly National Pricing Indicator report are available online at www.marketratesinsight.com.
