The FDIC has not yet formally published the anticipated guidance on how an institution can seek a “high-rate area” determination under the national interest rate restrictions for less than well-capitalized banks.  However, based on conversations with FDIC officials, we understand that the FDIC is accepting requests that a bank be determined to be in a “high-rate area.”

We understand that the request should include a self-identification of the bank’s relevant market area.  The FDIC will not set specified market areas, but rather will consider the market rate identified by the institution.  Institutions are also encouraged to identify competing credit unions  if the bank believes the credit union is relevant to deposit pricing in the market.

The request does not have to include analysis of the rates being paid in the market, as the FDIC will use its own data to calculate the average rate paid in the Bank’s identified market area.  The FDIC will calculate the average rates paid in four standard types of deposit categories.  If the market rate exceeds the national rate by at least 10% in three of the four categories, the FDIC will designate the Bank’s market area as a “high-rate area.”

We expect official guidance from the FDIC to be released shortly.