FDIC seeks advance payments to keep fund afloat
Under the agency's proposal, institutions would prepay three years' worth of premiums to the fund that insures customer deposits in case of failures. A bankers group signals support for the plan.
The FDIC's fund for covering banks that fail is below the legally mandated level. They would probably gloss over that and let it recover on it's own, except they are projecting it will run out next year if they don't get some more money. They already raised the rate for coverage once this year, so they looked around for another way to get the money.
I don't particularly like this solution, since it seems like another hit on the good banks to keep the bad ones floating. But the bankers seem to prefer it because borrowing money from the government would look like another bailout.
Jay
