Any such decision to lower BIF premiums, though, while maintaining the higher premiums required to rebuild the Savings Association Insurance Fund
(SAIF), could seriously undermine the competitiveness of thrift institutions.
Insured deposits have grown over the past five years at an average annual rate of nearly 4% for members of the Bank Insurance Fund (BIF) and more than 5% for members of the Savings Association Insurance Fund
(SAIF), both funds of the Federal Deposit Insurance Corporation.
In 1989, legislation to reform the federal deposit insurance system created three funds to be administered by FDIC: the Bank Insurance Fund and the Savings Association Insurance Fund, which protect bank and savings deposits, and the FSLIC Resolution Fund, created to close out the business of the former Federal Savings and Loan Insurance Corporation.
In GAO's opinion, FDIC fairly presented the 2002 and 2001 financial statements for the three funds it administers--the Bank Insurance Fund, the Savings Association Insurance Fund, and the FSLIC Resolution Fund.
Hanvke Jr., undersecretary of the Treasury for domestic finance, told members of the Senate Banking, Housing and Urban Affairs Committee that the failure of one or two large thrift institutions could exhaust the slender reserves of the Savings Association Insurance Fund
(SAIF), leaving it insolvent.
With some variation in numbers from year to year, roughly 150 members of the Bank Insurance Fund (mostly commercial banks) and 180 members of the Savings Association Insurance Fund
(mostly savings and loan associations) were chosen for each survey; they were picked randomly each year from each of seven regions of the country encompassing all fifty states and the District of Columbia and from five size groupings covering all institution sizes (see the appendix for more detail).
Under-capitalized 1 0 5 0 0 1 Savings Association Insurance Fund
Assessment Base Distribution (b) Assessable deposits as of December 31, 2002 Supervisory risk subgroup Assessable Number of deposit base Capital group institutions (millions of dollars) A B C A B C 1.
But recent growth has created a disparity of premiums between the Savings Association Insurance Fund
(SAIF) and the Banking Insurance Fund (BIF), reported Hove.
This weakness in thrift credit directly owed to asset shrinkage at savings and loan institutions insured by the Savings Association Insurance Fund
; credit unions and mutual savings banks expanded their balance sheets in 1989.
Insured deposit growth in 2000 and 2001, coupled with increased costs associated with bank and thrift failures, had a detrimental effect on the Bank Insurance Fund (BIF) and Savings Association Insurance Fund
(SAIF) of the Federal Deposit Insurance Corporation.
The functions of these organizations (and their employees) were reallocated: Regulatory functions fell to the new Office of Thrift Supervision, insurance functions fell to the new Savings Association Insurance Fund
of the Federal Deposit Insurance Corporation (FDIC) and receivership functions fell in the near term to the new Resolution Trust Corporation (RTC) and in the longer term to the FDIC.
In June 2001, the ratio of fund balances to insured deposits stood at 1.33% for the Bank Insurance Fund and 1.40% foe the Savings Association Insurance Fund
. The target ratio for both is 1.25%.