FDIC Expected to Require Banks to Prepay Fees

WASHINGTON (AP) -- The FDIC may take the unprecedented step of ordering banks to prepay about $36 billion in premiums to shore up the shrinking deposit insurance fund.

Several sources say the FDIC board likely will call for "prepaid" bank insurance premiums at today's meeting. That's an option prefered by the banking industry over a special emergency fee -- which would be the second this year. The officials spoke on condition of anonymity because the decision has yet to be made public.

It would be the first time the FDIC has required prepaid insurance fees. Under the plan, banks would have to pay in advance their insurance premiums for 2010-2012, bringing in about $12 billion for each of the three years, according to two officials. That is the normal amount of insurance fees, though it could vary somewhat according to growth in total insured deposits -- the basis for determining the fees.

Off the table, at least for now, are the options of tapping the agency's $500 billion credit line with the Treasury Department and borrowing billions of dollars from healthy banks by issuing its own debt.

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