Banks, not taxpayers, are funding the government's efforts to shore up depositors of the failed Silicon Valley Bank and Signature Bank.
The Biden administration will draw from the Deposit Insurance Fund to backfill customers' deposits, President Joe Biden said Monday, reiterating comments from the heads of Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation that this relief plan would not be funded by American taxpayers.
"No losses will be — and this is an important point — no losses will be borne by the taxpayers; let me repeat that, no losses will be borne by the taxpayer," Biden said Monday in remarks delivered from the White House. "Instead the money will come from the fees that banks pay into the Deposit Insurance Fund."
The FDIC's Deposit Insurance Fund (DIF) is used to help pay for operating costs as well as to resolve failed banks. It's funded by quarterly fees collected from FDIC-insured banks as well as interest earned from its investments in Treasury securities.
As of December 31, 2022, the DIF's fund balance was $128.2 billion, according to the FDIC.
Under requirements put in place by the Dodd-Frank Act, the FDIC has to have enough in the DIF coffers to cover 1.35% of insured deposits.