FDIC Doubles Budget for 2009, Adds 1400 PositionsIn a move to bolster its budget and bulk up its staff, the Federal Deposit Insurance Corporation (FDIC) this week approved its 2009 operating budget and added more than 1,400 staff positions to be filled in the new year.
The FDIC's Board of Directors set a $2.24 billion operating budget for next year. The Board also released financial reports for its Deposit Insurance Fund for the third quarter 2008.
The 2009 budget represents an increase of more than $1 billion from the current year. FDIC spokesperson David Barr cites the "cyclical nature of resolution activity" made the increase in budget and staff a priority. The high number of bank failures that have happened in 2008 and the possibility of more bank failures in 2009 was one of the reasons the FDIC has bolstered it staff, Barr notes.
So far in 2008 there have been 25 bank failures, compared to only 3 in 2007, and none from June 2004 through February 2007. Barr notes that was the longest period in the agency's history without having to resolve a failed bank.
The board approved an authorized 2009 FDIC staffing level of 6,269, an increase of 1,459 positions from the staffing level authorized at the beginning of 2008. Barr says the additional staff, most of which is temporary, will be hired primarily to perform bank examinations and other bank supervisory activities and to address bank failures, including the management and sale of assets retained by the FDIC when a failed bank is sold. "Of those staff, we had already announced 600 of them would be sought to fill positions in the temporary West coast office the FDIC established in Irvine, CA to handle West coast bank failures," says Barr. An additional 520 employees would work in the Division of Supervision and Consumer Protection.
Barr cites a combination of two factors that precipitated these increases: bank failures and the exam function. He says more than one-third of the staff will work on the "open bank" side with the other two-thirds working on the "closed bank" side.
Barr says FDIC's decision to hire the bulk of these 1,400 as temporary employees is that when the need for their work is done, it will be easier for them and they would not go through a reduction in force or a layoff, which is always painful for both sides.
Barr encouraged people in the banking industry to apply for the positions, if interested. "These positions are open to anyone in the banking industry. For example, the FDIC is looking for 200 lawyers, who would be non-permanent, who have experience in resolution or asset liquidation experience, or experience in dealing and selling loans, servicing loans."
At the FDIC Board meeting, the board also announced that in the third quarter the Deposit Insurance Fund (DIF) decreased by 23.5 percent ($10.6 billion) to $34.6 billion (unaudited).