By Yali N'Diaye

WASHINGTON (MNI) - With the passage of the Dodd-Frank Act, the Federal Deposit Insurance Corp. will now have until the end of September 2020 to bring its reserve ratio to the statutory minimum of 1.35%, rather that 1.15%.

This is more than the eight years provided under the current Restoration Plan that would have given the FDIC only until the end of 2016 to bring its reserve ratio to 1.15%, an FDIC spokesman told Market News International Wednesday.

The latest projections presented at a Board meeting in June, indicated agency did not expect to meet that deadline.

Taking into account a planned uniform 3 basis point increase in assessment rates effective January 1, 2011 as stipulated in the current Restoration Plan, the FDIC had expected the insurance fund to return to a positive balance in 2012.

However, the reserve ratio was projected to reach the statutory minimum target of 1.15% during the first quarter of 2017, "one quarter beyond the eight-year time frame set forth in the statute."

Now, however, "The new law also gives us until Sept. 30, 2020, to get the DIF to the new 1.35 level, which is longer than our current eight-year restoration plan to get it to 1.15%," the spokesman said.

The Dodd-Frank Bill signed into law Wednesday morning also permanently increases the FDIC insurance coverage to $250,000 per depositor.

The spokesman made clear, however, that "This was built into the restoration plan," which means assessment rates will not have to be adjusted on that basis.

"We are already including the exposure of insuring up to $250K in the denominator of the reserve ratio and have been doing so since Sept. 2009," the spokesman said.

So the only difference is that instead of returning to $100,000 in 2013, the coverage will permanently stay at $250,000.

Chairman Sheila Bair said in a statement, "With this permanent increase of deposit insurance coverage to $250,000, depositors with CDs above $100,000 but below $250,000 will no longer have to worry about losing coverage on those CDs maturing beyond 2013."

** Market News International Washington Bureau: 202-371-2121 **