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Are You Ready for the FDIC's Large Bank Pricing Rule?
What is the Large Bank Pricing Rule?
FDIC rule under Dodd-Frank Act detailing new reporting requirements on consumer subprime loans and other concentrations.
Learn more by selecting a topic below
- New Reporting Requirements on Subprime Loans
As a result of the Dodd-Frank Act, new elements of the Federal Deposit Insurance Corp.’s (FDIC) proposed Large Bank Pricing Rule is scheduled to go into effect on April 1, 2013. After this date, large banks will be required 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 will directly impact FDIC rates, meaning institutions with higher-risk consumer subprime loan amounts may be charged higher FDIC insurance rates.
- What are the new requirements?
The new requirements apply to large FDIC insured institutions (those with more than $10 billion in assets):
- 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 2 years from origination, renewal or purchase.
Who is Impacted by the Large Bank Pricing Rule?
Large FDIC insured institutions, with $10 billion or more in assets.
How Can Experian Help my Business with Compliance for the Large Bank Pricing Rule?
Experian can provide analytical resources and consulting to aide clients in determining the best reporting outcome.
Validations through Decision Analytics
Experian can help large financial institutions comply with the rule and provide the required reporting with minimal effort for the client. Standard validation rules and pricing apply.
- As a value add, in addition to the required PD tables, Experian will include performance charts as well as a VantageScore® validation. These will all be included as part of the standard process above.
Some organizations may prefer to perform their own analysis and produce the required reporting for the FDIC. Data requests for these client-led analysis will go through the client’s Business Analyst and the standard data request rules and pricing will apply.