WASHINGTON --- A plan that regulators proposed Tuesday to have banks prepay $45 billion in insurance premiums won't provide a long-term fix for the shrinking fund that insures bank deposits.

But the Federal Deposit Insurance Corp.'s proposal would spare ailing banks the immediate cost of an alternative idea: paying an emergency fee for the second time this year. And most banks would likely be able to prepay their premiums without having to reduce lending to businesses and consumers.

Regulators said they expect the cost of bank failures to grow to about $100 billion over the next four years -- up from an estimate of $70 billion earlier this year. Faced with that sobering news, they voted to require banks to prepay $45 billion in premiums to replenish an insurance fund that will start running dry today.

The FDIC board's proposal to require early payments of premiums for 2010-12 could take effect after a 30-day public comment period. Depositors' money is guaranteed -- up to $250,000 per account -- by the FDIC. It would be the first time the agency has required prepaid insurance fees.

The increased loss estimate underlines the short-term nature of the prepayment solution. The agency will be able to continue paying depositors when banks fail. But banks will have to pay tens of billions more in coming years to keep the fund solvent. .

Still, the shortfall won't likely make it harder for consumers and businesses to get loans. Most banks have adequate funds for lending. In a sluggish economy, fewer people and businesses are seeking loans. Investors wary of stocks and bonds have funneled more deposits to banks.

"What the FDIC is effectively doing is borrowing from the banking industry, and they can afford it," said independent banking consultant Bert Ely.

The FDIC's plan would draw on banks' ready cash. Instead of charging them a one-time fee that would deplete their capital reserves, it would spread the costs of the refunding over three years.

"Any way you slice it, the banking industry will pay the cost of these failures over time," said James Chessen, chief economist with the American Bankers Association.

Ninety-five banks have failed so far this year as losses have mounted on commercial real estate and other soured loans amid the most severe financial climate in decades. That has cost the fund about $25 billion, the FDIC said Tuesday.