On December 14, CFPB Director Rohit Chopra expressed concerns with the FDIC’s current plan to “restore the Deposit Insurance Fund to the statutory minimum in 2028.” The Federal Deposit Insurance Act requires the development and adoption of a Deposit Insurance Fund (DIF) Restoration Plan (Plan) when the fund’s reserve ratio drops below 1.35 percent or is expected to within six months. According to the FDIC, “[e]xtraordinary growth in insured deposits during the first and second quarters of 2020 caused the reserve ratio to decline below the statutory minimum as of June 30, 2020.” The FDIC Board adopted the Plan in September 2020 to restore DIF’s levels to at least 1.35 percent by September 30, 2028, but noted during the Plan’s semiannual update for 2021 that “the overall economic outlook has strengthened relative to when the Plan was first adopted in September 2020,” and that “the banking system continues to appear better positioned to withstand losses when compared to prior periods of stress.” FDIC Chair Jelena McWilliams also commented that since it is difficult to predict deposit trends and potential losses, the agency will continue to monitor this space.

Chopra cautioned that “[g]iven the significant uncertainty in the projections embedded in this plan—and the ultimate goal to have the Deposit Insurance Fund well exceed the 1.35% statutory minimum—we must continue to carefully analyze this plan to probe whether any amendments are necessary prior to the next semi-annual update to the Board of Directors.” He further noted that the 2008 financial crisis highlighted the importance of “countercyclical policy,” and that “regulatory and supervisory safeguards should be strengthened in stronger economic times, when risks tend to build in the financial system and when bank profits are robust.”