Banks Face Higher Insurance Fees at Worst Time

Kiplinger reports:

Banks struggling with high FDIC insurance fees won’t see relief anytime soon. In addition to higher regular fees, banks face another special assessment by the end of this year. And they will most likely see one or two more special assessments in 2010 as the Federal Deposit Insurance Corporation is forced to keep bailing out the depositors of failed banks.

“We believe that the bulk of the losses will occur in 2009 and 2010,” says James Chessen, a senior economist at the American Bankers Association. “So the fund needs reserves for next year’s failures.” About 90 banks have failed so far this year.