* Some banks seeing increase in deposits
* FDIC charges banks fee for deposit insurance fund
* BNY Mellon has sought to pass along costs to customers
By Dave Clarke
WASHINGTON, Aug 8 U.S. banks might seek
regulatory relief from costs associated with a flood of
deposits, as investors seek safe places for their money, a top
Washington banking official said on Monday.
Wayne Abernathy, a top official with the American Bankers
Association, said it would be a concern for banks if the
temporary surge in deposits due to market turmoil led to banks
having to pay higher insurance fees on the short-term bloat.
"We've seen a little more than subtle shift of people out
of money market funds and into deposits," he said.
More deposits mean banks have to pay more fees to the
Federal Deposit Insurance Corp, which insures customer deposits
up to $250,000.
The fees are assessed on a quarterly basis and are
calculated using the banks' daily average deposit and asset
Abernathy said that, if banks feel they will get hit by a
big insurance bill, they would likely ask the FDIC to account
for the unusual market conditions when determining the
quarterly payment due.
He said banks could make the following case to the FDIC:
"Don't you want to take this temporary bump ... into account
when assessing us for deposit insurance, and not making us pay
for this adjustment?"
An FDIC spokesman declined to speculate on what the agency
might do if banks were to make such an appeal.
Last week, Bank of New York Mellon Corp (BK.N) said it was
seeing a "transient" flood of deposits that could drive up its
regulatory insurance costs. It said it would start charging a
fee to big customers with unusually high balances to help
absorb those costs.
(Reporting by Dave Clarke; editing by Andre Grenon)