Banks are worried that the Federal Deposit Insurance Corp. is placing too much emphasis on the stressful years of the financial crisis in determining lenders’ concentration of high-risk loans.
The FDIC is trying to ensure that the risk of holding large amounts of high-risk assets, including subprime loans, is appropriately reflected in large banks’ deposit insurance assessments. To do so, the agency is using the years from 2007 to 2011 — smack dab in the middle of housing and financial crises — as a baseline for determining how consumers with comparable credit risk perform during periods of major stress.