Large Bank Pricing Rule

The Large Bank Pricing Rule is FDIC’s rule under Dodd-Frank Act detailing new reporting requirements on consumer subprime loans and other concentrations. See below to learn more about the new requirements.

New reporting requirements on subprime loans

As a result of the Dodd-Frank Act, new elements of the FDIC’s proposed Large Bank Pricing Rule went into effect on April 1, 2013. This rule requires large banks to follow new reporting requirements on consumer subprime loans and other concentrations. Previously, deposit insurance rates were charged based on the size of deposits. Under the new rule, a bank’s assets directly impacts FDIC rates, meaning institutions with higher-risk consumer subprime loan amounts may be charged higher FDIC insurance rates.

The requirements apply to large FDIC insured institutions (those with more than $10 billion in assets) and include:

• Potential deposit insurance for concentrations of leveraged loans, consumer subprime loans and certain types of mortgage and commercial real estate loans
• Defines consumer subprime as where probability of default is greater than 20% over the following two years from origination, renewal or purchase