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The Federal Deposit Insurance Corporation (FDIC) on Thursday proposed a special assessment of the largest U.S. banks to recover the funds used to protect uninsured depositors who otherwise would’ve been left holding the bag following the failures of Silicon Valley Bank (SVB) and Signature Bank.
The proposed special assessment would recoup the $15.8 billion paid out from the FDIC’s Deposit Insurance Fund to protect depositors in SVB and Signature who had deposits in excess of the $250,000 insurance threshold. It would do so by imposing a fee of 0.125% – or 125 basis points – on insured deposits at banks with $5 billion in assets or more, which would remain in effect for eight quarterly assessment periods starting in the first quarter of 2024.
The FDIC estimates that about 113 banks will be subject to the fee and that banks with more than $50 billion in total assets will pay about 95% of the special assessment, while those with less than $5 billion will be exempt.
"The proposal applies the special assessment to the types of banking organizations that benefited most from the protection of uninsured depositors, while ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits," said FDIC Chairman Martin Gruenberg. "The proposal also promotes maintenance of liquidity, which will allow institutions to continue to meet the credit needs of the U.S. economy."
FDIC ENLISTS BLACKROCK TO CLEAN UP BANKING CASTOFFS
The Federal Deposit Insurance Corporation is imposing a special assessment fee on larger banks to replenish an insurance fund that was tapped following the failures of Silicon Valley Bank and Signature Bank. (AP Photo/Peter Morgan / AP Newsroom)
Under the Federal Deposit Insurance Act, the FDIC is required to impose an assessment fee on banks to recover funds paid out from the Deposit Insurance Fund whenever a systemic risk designation is invoked by regulators amid a banking crisis.
The proposed assessment has to go through the federal rulemaking process, which includes a 60-day public comment period after the proposal appears in the Federal Register. It Is also subject to revision before it is finalized if changes are made to the loss estimates, mergers or failures occur, or the reported estimates of uninsured deposits.
WILL FIRST REPUBLIC BE THE LAST BANK RESCUED AMID BANKING CRISIS?
Signature Bank failed in March and was acquired by New York Community Bank in a $2.7 billion deal. (AP Photo/Bobby Caina Calvan / AP Newsroom)
SVB and Signature Bank both had relatively large amounts of uninsured deposits at the end of last year which made them vulnerable to collapse when depositors moved to withdraw their funds. SVB’s uninsured deposits were roughly 93% of its total deposits at the end of last year, while Signature’s amounted to 89% of its deposit base at that time according to regulatory filings.
The failure of those banks and the structure of the FDIC’s special assessment means that the nation’s largest banks – including the likes of JPMorgan Chase, Bank of America and Wells Fargo – will have to foot the bill. FOX Business reached out to those three institutions for this story, and they either declined to comment or did not respond prior to the deadline.
FDIC LOOKS TO CHANGE DEPOSIT INSURANCE POLICY FOLLOWING FIRST REPUBLIC FAILURE
Silicon Valley Bank failed in March and was acquired by First Citizens Bank for over $16 billion. (REUTERS/Brittany Hosea-Small / Fox News)
The American Bankers Association, which is one of the nation’s largest financial sector trade groups, said in a statement from President and CEO Rob Nichols, "While we are still reviewing the details of the proposed special assessment, including the methodology and the dissenting votes, we appreciate the FDIC’s decision to exclude most community banks."
"Once we receive input from our members, we will be prepared to provide industry feedback to the FDIC on the special assessment, the timing of the expense, and the ongoing increase in quarterly Deposit Insurance Fund assessments on banks," Nichols added.
Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey said in a statement that, "ICBA and the nation’s community banks commend the FDIC for today’s proposal to exempt the vast majority of community banks from its special assessment following the recent failures of Silicon Valley Bank and Signature Bank of New York – which we’ve advocated since the immediate aftermath of these large bank failures."Ticker Security Last Change Change % JPM JPMORGAN CHASE & CO. 136.05 -0.43 -0.32%WFC WELLS FARGO & CO. 38.33 +0.05 +0.13%BAC BANK OF AMERICA CORP. 27.39 +0.07 +0.26%
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"As ICBA has repeatedly said, including in a letter to FDIC Chairman Martin Gruenberg, community banks should not have to bear any financial responsibility for losses to the Deposit Insurance Fund caused by the miscalculations of large financial institutions," Romero Rainey added. "Large banks should pay for the special assessment because they are the chief beneficiaries of these two receiverships."
The families of the two victims of the Manchester synagogue attack have paid tribute to them as “heroic, beloved and cherished”.
Adrian Daulby, 53, and Melvin Cravitz, 66, were killed in the attack at Heaton Park synagogue in Crumpsall on Thursday.
Mr Daulby, a member of the congregation, was shot accidentally when police opened fire on attacker Jihad al Shamie.
The synagogue’s rabbi told Sky News it happened as Mr Daulby “was holding the doors to make sure everyone inside stayed safe”.
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Hero held doors closed to keep everyone safe, rabbi says
His family said he was a “hero” and a “lovely down-to-earth man” whose “final act was one of profound courage and he will forever be remembered for his heroic act”.
The family of Mr Cravitz – a security guard at the synagogue who was attending the service – said he would “do anything to help anyone”.
“He was so kind, caring and always wanted to chat and get to know people,” they said.
“He was devoted to his wife, family and loved his food. He will be sorely missed by his wife, family, friends and community.”
Image: Adrian Daulby. Pic: Family handout
The tributes came as police said three more people – a man and two women – had been arrested on suspicion of terror offences, bringing the total to six.
They also revealed the attacker had been on bail over a suspected rape, but wasn’t on the radar of counter-terror police.
The Independent Office for Police Conduct (IOPC) is investigating the shooting – standard practice when a member of the public is killed.
The investigation would include “whether police may have caused or contributed to the death” of Mr Daulby.
Sir Stephen Watson, the head of Greater Manchester police, confirmed Mr Daulby’s injury appeared to be “a tragic and unforeseen consequence of the urgently required action taken by my officers”.
‘Gentle giant’
Other relatives of Mr Cravitz told Sky News he was a “gentle giant” who “would never harm a fly”.
His cousin, Phil Bentley, said his death was even more tragic as he would never normally be at the synagogue that early.
Image: Melvin Cravitz. Pic: GMP
Hindi Cohen, a friend and neighbour, said he was a “lovely man” with a good sense of humour, adding: “Our kids loved him. He called himself uncle Melvin to my kids.”
One of Mr Daulby’s neighbours was also emphatic in his praise for a man he lived next door to for 20 years.
Abdul Rahimi called him “one of the best guys I’ve ever seen in my life” and a “very, very good man”, who often bought books and toys for children on their street.
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Synagogue attack victim was a ‘fantastic guy’
Another neighbour, Waqas Hussain, said the pair bonded over a shared love of nature, animals and birds.
He said Mr Daulby was a cancer survivor, who lived alone and started going to the synagogue more after his father died a few years ago.
“Just one of them people… so innocent, so approachable and so pure,” he told Sky News.
He said his friend hadn’t been fasting for health reasons and was debating whether or not to go the synagogue on Thursday.
Increased police patrols are being put in place near synagogues across the country following the atrocity.
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A vigil for the victims was also held in Manchester on Friday – but Deputy Prime Minister David Lammy walked out to shouts of “shame on you” and boos from a few in the crowd.
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Deputy PM heckled at vigil
“Go to Palestine but leave us alone,” one person shouted.
Another protester shouted “my children’s school was closed today – you allowed this to happen.”
Thirty-five-year-old Jihad al Shamie was named as the attacker on Thursday and is believed to be of Syrian descent.
He is understood to have been granted British citizenship when he was around 16, having entered the UK as a young child.
Police shot him dead seven minutes after the first emergency call as they feared he was wearing an explosive device – later identified as a fake.
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Timeline: How terror attack unfolded
Three men also remain in hospital after the attack, with two of them named as Yoni Finlay and Andrew Franks.
One suffered a stab wound, a second was hurt after being hit by a car that al Shamie is said to have driven towards the synagogue, and the third suffered a gunshot wound.
One of the injured victims was working for the Community Security Trust (CST), a charity which provides security to the Jewish community.
Its chief executive, Mark Gardner, said: “One of our CST personnel was seriously injured in yesterday’s terror attack at Heaton Park Synagogue.
“We pray for his continuing recovery and salute the courage of all those who helped stop the terrorist from getting into the shul.”
Sean “Diddy” Combs has been sentenced to more than four years in prison over prostitution charges relating to his former girlfriends and male sex workers.
Judge Arun Subramanian handed down his 50-month sentence – including a $500,000 fine – at the end of a long and emotional full-day hearing, which saw the hip-hop mogul speak out for the first time in court.
Combs, 55, admitted his past behaviour was “disgusting, shameful and sick”, and apologised personally to Cassie Ventura and “Jane”, another former girlfriend who testified anonymously during the trial.
Image: Sean Diddy Combs broke down and cried at one point during the sentencing hearing. Pic: AP/ Elizabeth Williams
But despite his plea for “mercy” and expressions of remorse, the judge told him he had abused his “power and control” with women he professed to love – and rejected the defence’s characterisation that “freak off” sexual encounters were consensual experiences, that his was just a “sex, drugs and rock’n’roll story”.
Addressing Cassie and “the other brave survivors who came forward”, the judge said. “We heard you… I can only say your families are proud of you and your children will be proud of you.
“You weren’t just talking to the jury you were talking to the women who feel powerless – you gave them a voice, you stood up to power, it’s not easy.”
Combs showed no visible change of emotion as his sentence was delivered, looking straight ahead as the judge spoke. Afterwards, he seemed subdued – with no sign of the enthusiasm or feeling showed earlier in the day.
Image: Six of Combs’s children, including Chance, right, and twins Jessie and D’Lila Star, addressed the judge in support of their father. Pic: AP/Richard Drew
Ahead of his own speech, the court heard from six of his seven children – causing the rapper to break down in tears as they spoke about how much they loved him, how he has changed, and how much they and their younger two-year-old sister need him.
The sentencing brings to an end a sordid case that featured harrowing testimony – not just from Cassie and Jane, but also from former employees and associates of Combs.
He was convicted in July of flying people around the US and abroad for sexual encounters, including his then girlfriends and male sex workers, in violation of prostitution laws.
However, he was cleared of more serious charges of racketeering conspiracy and sex-trafficking that could have put him in jail for life.
‘I hate myself right now’
Image: Diddy cried as his children read impact statements. Pic: Reuters/Jane Rosenberg
He expanded on this in court, saying he wanted to “personally apologise” to Cassie for “any harm” he caused her “emotionally or physically”, and to Jane – and all victims of domestic violence.
He told the court he got “lost in my excess and lost in my ego”, but since his time in prison he has been “humbled and broken to my core”.
Combs continued: “I hate myself right now… I am truly sorry for it all.”
Image: Janice Combs supported her son in court. Pic: AP Photo/Eduardo Munoz Alvarez
Once one of the most influential hip-hop producers of the 1990s and 2000s – the founder of Bad Boy Records and a Grammy-winning artist in his own right – he has led a very different life since his high-profile arrest.
He was facing a maximum of 20 years in prison for the prostitution-related charges, so the sentence is towards the lower end of the scale.
Prosecutors had argued he should spend at least 11 years behind bars, while Combs’s lawyers were calling for him to be freed almost immediately due to time already served since his arrest just over a year ago.
Christy Slavik, for the prosecution, told the judge sparing the rapper serious prison time would excuse years of violence.
‘Make the most of that second chance’
Image: Judge Arun Subramanian told Combs he will still have a life after prison if he takes his second chance. Pic: Elizabeth Williams via AP
The judge, who had rejected bail for the rapper several times before sentencing, told him that he would get through his time in prison. It will be hard, he said, but he will still “have a life afterwards”.
Combs has “a chance for renewal and redemption”, he added. “What went wrong can be made right… I am counting on you to make the most of that second chance.”
Outside the courthouse, journalists and onlookers swarmed the pavements as TV crews stood in a long row across the street, echoing scenes from the two-month high-profile trial.
It included four days of testimony from Cassie, now Cassie Ventura Fine, who told the court she was coerced and sometimes blackmailed into sexual encounters with male sex workers, referred to as “freak offs”.
Cassie responds
Image: Diddy and Cassie at the premiere for a film she starred in, just days after the 2016 hotel incident. Pic: zz/Galaxy/STAR MAX/IPx/ AP
Jurors were also shown video clips of Combs dragging and beating her in a Los Angeles hotel hallway after one of those sessions in 2016.
Combs referred to this in court, saying it was a “heavy burden” that he will forever carry, and that he was “sick from drugs” and “out of control” at the time, “lost in my excess and lost in my ego”.
Ahead of the sentencing, Cassie also submitted a letter to the judge, calling Combs a “manipulator” and saying she would fear for her safety should he be immediately released.
Responding to the sentence, her lawyers Douglas Wigdor and Meredith Firetog (Wigdor LLP), said: “While nothing can undo the trauma caused by Combs, the sentence imposed today recognises the impact of the serious offences he committed.
“We are confident that with the support of her family and friends, Ms Ventura will continue healing knowing that her bravery and fortitude have been an inspiration to so many.”