As we have previously discussed, FDIC determinations that a bank is operating in a “high rate area” remains effective only for the calendar year in which it was granted. All banks that received a high-rate determination in 2010 are required to submit a new request to the FDIC in order to continue their ability to use the local market average calculation method for determining their rate cap in 2011.
The FDIC has informed us that these requests will not be processes prior to year-end, but that banks that submit a request will be entitled to continue to use the local market average calculation method until notified in writing otherwise by the FDIC.
The FDIC has also confirmed that all of the states within the Atlanta region continued to be considered high-rate areas for the fourth quarter of 2010. This determination, which is separate from a specific determination that any specific bank operates in a high rate area, has been made at the beginning of each quarter since the effectiveness of the national rate cap rule. Any bank operating in a state that is considered a high-rate area will receive an affirmative high-rate determination letter if requested by the bank. Without a state-wide determination, the FDIC will look to the specific markets served by the bank to determine whether a high rate area determination is appropriate.