Rate Cap

Jul 15, 2025 4:18:17 PM

Thanks for sharing this article Mary. Agree it's excellent. This link

https://www.bankdirector.com/index.php/issues/regulation/biggest-threat-deposit-insurance-fund-ive-ever-seen/ will take you directly to the story. Clearly the rate cap needs adjustment (or elimination), and you make a great point in this story about timing. The FDIC needs to decide on a fix before an economic recession arrives.

Barbara A. Rehm

Senior Managing Director

Promontory Interfinancial Network

(703) 473-7481

------Original Message------

Good article about the rate cap:
"The Biggest Threat to the Deposit Insurance Fund I've Ever Seen"

http://www.bankdirector.com/

remove preview

"The Biggest Threat to the Deposit Insurance Fund I've Ever Seen"

A little-known rule called the national rate cap is putting community banks in a bind. The cap tries to set a high-water mark for rates by calculating a weekly average of advertised interest rates for specific deposit products at branches, plus 75 basis points.

View this on http://www.bankdirector.com/ >

A point I wish the article had made: The rates used now to calculate the rate cap are not prevailing rates, or market rates, but posted rates. There is a huge difference, and the result is an average rate and a rate cap that is far below market.

------------------------------
Mary Fowler
Chief Executive Officer
The Peoples Bank
Magnolia AR
------------------------------

0 Likes

0 Comments

Join the Conversation! 🗣️✨

Be part of our community—sign up now to share your thoughts, connect with others, and stay in the loop!