Banking and Finance Law Daily Wrap Up, FINANCIAL STABILITY—ABA offers suggestions to improve FDIC failed bank resolution proposals, (Sep 1, 2026)

By Jonathan Anderson

The proposals address deposit insurance assessment regulations and the agency’s rule requiring resolution submissions by large insured depository institutions.

The American Bankers Association (ABA) filed comments with the Federal Deposit Insurance Corporation (FDIC) about two proposals related to failed bank resolutions. The first proposal would revise the FDIC’s assessment regulations for all FDIC-insured institutions. The ABA said it supports some aspects of the proposal but also has concerns about potential risks to financial institutions. The second proposal amends the FDIC’s rule requiring resolution submissions by large insured depository institutions (IDIs). The ABA offered several recommendations for revising the proposal.

Deposit insurance assessment. The first proposal would revise the FDIC’s assessment regulations for all FDIC-insured institutions, including by increasing the threshold used for determining whether a bank is small or large from $10 billion to $30 billion in assets and adjust the threshold for inflation every four years using an indexing methodology (see Banking and Finance Law Daily, Jun. 26, 2026). The proposal would “decrease initial base deposit insurance assessment rate schedules by 2 basis points for small institutions and by 1 basis point for large and highly complex institutions.” The proposal provides for a “downward resolution readiness adjustment (RRA) to assessment rates for large and highly complex institutions, including 0.5 basis points for passing virtual data room (VDR) testing and 0.5 basis points for providing temporary access to certain service providers and internal systems.” The RRA would be applied to a large or highly complex institution’s assessment rate “in recognition of the expected reduction in losses to the [Deposit Insurance Fund (DIF)] in the event of the failure of a bank that successfully completes the VDR testing exercise and/or provides the prescribed data access,” the FDIC stated.

In its comment letter, the ABA said it “supports the proposed increase to, and indexing of, the asset threshold used to determine which institutions are assessed under the small bank methodology.” The ABA said the 2-basis-point reduction should apply to institutions of all sizes.

However, the ABA said it has “conceptual concerns with conditioning any portion of the proposed 2-basis-point rate reduction on participation in the proposed RRA because doing so would depart from a risk-based assessment approach.” The ABA further wrote that it has “significant technical concerns with the RRA as currently proposed” and that it “believes that the proposed RRA presents unacceptable operational, data, legal, and information-security risks.” The ABA called on the FDIC to “establish robust data-security, privacy, and access safeguards” before finalizing the RRA, and added that “either the VDR component or the data-access component should qualify an IDI for full RRA credit, and IDIs should be permitted to choose which component to opt into.”

Resolution planning. The second proposal would amend the agency’s rule requiring resolution submissions by large IDIs (see Banking and Finance Law Daily, Jun. 26, 2026). The proposal would raise the asset threshold for covered IDIs from $50 billion to $100 billion. The threshold would then be adjusted automatically in the future using an indexing methodology. The proposal also would rename filings under the rule as “resolution submissions,” eliminate the distinction between Group A and Group B covered institutions, and standardize content requirements. All covered institutions would file on a three-year cycle. The FDIC would obtain information about material changes through the notice-of-extraordinary-event process rather than through interim supplements.

In its comment letter, the ABA wrote that the proposal “should eliminate duplicative submissions where the same information is already available through a resolution plan filed under section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

Second, the ABA wrote that the proposal “should make the elimination of capabilities testing that does not facilitate FDIC’s preparedness for receivership durable” while avoiding duplicative obligations.

Finally, the ABA wrote that the proposal “should adopt clear safeguards governing operational information security, confidential data, and permissible use of any information it collects in support of resolution effectiveness, aligned with the principles and considerations in the Statement regarding Coordinated Federal Banking Agency Approach for the Handling of Highly Sensitive Information During Examinations.”

Companies: American Bankers Association

RegulatoryActivity: BankingOperations DepositInsurance DoddFrankAct FinancialStability PrudentialRegulation