| FDIC Issues Final Rule on Prepaid Assessments |
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11/16/2009 |
On Thursday, November 12, 2009, the FDIC issued a final rule requiring financial institutions to prepay their estimated quarterly risk-based assessments for the fourth quarter 2009 and all of 2010, 2011 and 2012. The entire amount of this prepaid assessment will be collected on December 30, 2009, along with each institution’s regular quarterly risk- based assessment for the third quarter of 2009. The final rule is substantially the same as the interim final rule adopted by the FDIC on September 29, 2009.
On October 27, the Subchapter S Bank Association submitted a comment to the FDIC regarding the tax treatment of the prepaid assessment on Subchapter S financial institutions. In the comment letter, we (i) requested that the FDIC clarify exactly how the prepaid assessment would be treated for income tax purposes under current laws; and (ii) proposed that Sub S banks should be given the opportunity to deduct the entire amount of the prepaid expense in 2009, when it will be paid.
In summarizing the comments received by the FDIC, the final rule recognizes that S corporation financial institutions were particularly concerned about the tax treatment of the prepaid assessment. While the FDIC did not recognize that Sub S banks could, or should, be able to deduct the entire amount of the prepaid assessment in 2009, it did clarify that "institutions will continue to be able to deduct quarterly assessments at least as quickly as they have in the past.”
We would like to express our sincere gratitude to all of those banks, trade associations and professional organizations that submitted comments on behalf of the Sub S bank community. Clearly our concerns were heard and acknowledged by the FDIC.
The FDIC’s press release announcing the final rule and the full text of the final rule can be viewed at the following link: http://www.fdic.gov/news/news/press/2009/pr09203.html. |
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