October 06, 2009

Seeking to replenish its reserves with a $45 billion transfusion, the Federal Deposit Insurance Corp. is requiring member banks to prepay premiums for the next three years on Dec. 30 - a strategy that's largely viewed as ill-timed yet necessary.Since June 2008, the regulatory agency has paid out tens of billions of dollars in claims to depositors who sustained losses when banks holding their money failed.

As of Sept. 30, 95 banks had failed this year, and 28 failed in 2008, according to the FDIC, which last October raised its insurance coverage to $250,000 per depositor from $100,000.FDIC officials have predicted a negative fund balance by Sept. 30. At the end of June, the fund balance had dropped to $10.4 billion, down from more than $45 billion a year ago.The alarming trend prompted agency officials to impose a one-time special assessment on member banks at the end of September.