The Boston Globe reports that Congress prevented the FDIC from collecting premiums from banks for 10 years because it was considered “well capitalized” and because bank failures were so rare.
The agency, which insures bank deposits up to $250,000, is currently seeking emergency powers to borrow up to $500 billion from the U.S. Treasury as strained banks are unable to pay the increased fees necessary to fully restore the fund.
At the end of 2007 the FDIC had $52.4 billion in its insurance fund. A year later this was reduced to $18.9 billion, in addition to the $22 billion set aside for pending bank failures. The agency estimates that it will need $65 to cover bank failures through 2013, however it will likely need far more if it is forced to take over megabanks like Citibank or Bank of America.