Are U.S. regulators proposing covering bank failures with accounting tricks?

Could it possibly be true that regulators are proposing to use an accounting trick to replenish the beleaguered FDIC fund that protects bank deposits? That's what it seemed like Tuesday when the Federal Deposit Insurance Corp.'s five-member board voted to require banks to prepay $45 billion in quarterly fees but not require them to account for the money until later, according to the Reuters international news service. The proposal, released for a 30-day public comment period, is intended to help shore up the FDIC's bank failure fund, which is expected to pay out $100 billion through 2013. The fund is expected to be in the red later this year and remain in the red through 2012, Reuters said. Ninety-five banks have failed so far in 2009, compared with 25 last year and three in 2007. The prepayment will enable the banking industry to avoid another emergency assessment like the $5.6 billion fee levied on banks in May, Reuters said. "Everybody has bailout fatigue," said FDIC Chairwoman Sheila Bair, explaining that the prepayment would avoid forcing the agency to use its $500 billion line of credit with the U.S. Treasury. The proposal would require banks to prepay their regular assessments for all of 2010, 2011 and 2012 when they pay their regular assessments for the fourth quarter of 2009 on Dec. 30. Bair said her agency had plenty of money to protect depositors despite the negative balance in the fund. "We have tons of money to protect insured depositors," she said. "This is really about the mechanics of funding." Actually, it sounds some kind of game-playing, precisely the wrong signal to send to nervous depositors all over the country. If adopted, the proposal would be the first time the agency has ever asked banks to prepay regular fees, Reuters said.