Assessments 101
The annual OSBC bank and trust assessments were recently mailed to your institution and we thought this would be a good opportunity to provide some insight into how your institution's assessment is determined. By way of background information, the banking division's budget for the coming fiscal year is $5.1 million. This represents 75% of the agency's total budget. In determining the amount we assess the banks and trust companies we regulate, we need to charge sufficient monies to cover the banking division's budget along with the division's $150,000 statutory transfer to the general fund. We also need to determine whether the banking division spent all of the budget from the previous year or if there are remaining funds to help offset costs for the coming year. Once the appropriate amount of funds needed is determined, we utilize March 31 total bank assets to ascertain how much each institution will be charged per million dollars in assets. Several years ago, the OSBC went to a tiered system of assessments. This tiering allows us to take into account the economies of scale for very large banks, while keeping our fee schedules reasonable for all banks. For Fiscal Year 2006, the OSBC bank assessment rates are as follows:
For total assets equal to or less than $250,000,000 - $170 per million; additional assets between $250,000,000 and $500,000,000 - $150 per million; additional assets between $500,000,000 and $1,000,000,000 - $120 per million; and assets in excess of $1,000,000,000 - $75 per million.
As a result of both the banking division operating under budget during Fiscal Year 2005 and a healthy growth of the banks' asset levels, bank assessment rates for the existing tiers have been reduced for Fiscal Year 2006 by at least 11 percent. For example, the first tier rate of $170 per million was reduced from last year's $180 per million fee. These assessment rates are at the lowest level in over ten years. Our office has a long standing tradition of maintaining a competitive cost advantage over the Office of the Comptroller of the Currency and we strive to continue to offer significant savings to state-chartered banks.
