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  • FDIC approves amendments to deposit insurance recordkeeping, joint account determinations

    Agency Rule-Making & Guidance

    On July 16, the FDIC approved amendments to two final rules designed to resolve issues related to deposit insurance regulations. As previously covered by InfoBytes, the first of the final rules amends Part 370 of the FDIC’s Rules and Regulations for “Recordkeeping for Timely Deposit Insurance Determination,” to address issues raised during implementation of the final rule adopted in November 2016 (covered by InfoBytes here). Among other things, the amendments to Part 370 require banks with at least two million deposit accounts to upgrade deposit recordkeeping to allow the FDIC to determine the necessary deposit insurance coverage. The rule also allows for an optional one-year extension of the rule’s compliance date of April 1, 2020, provided prior notice is given to the FDIC. The final rule is effective October 1. FDIC Director Gruenberg dissented from the final rule’s approval.

    The second final rule amends Part 330—applicable to banks of all sizes—to update the requirements for verifying participants in joint deposit accounts. Part 330 provides alternatives to the traditional signature card, and will allow satisfaction of proof of joint-ownership to be established by other information contained in a bank’s deposit account records and not solely by signed signature cards of each co-owner. The final rule takes effect 30 days after publication in the Federal Register.

    Agency Rule-Making & Guidance FDIC Deposit Insurance Bank Compliance

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  • FDIC proposes changes to record keeping requirements for deposit insurance determinations

    Agency Rule-Making & Guidance

    On March 29, the FDIC Board of Directors approved proposals to amend two rules, which would simplify the process for making deposit insurance determinations in the event a bank enters receivership. The first proposal amends Part 370 of the FDIC’s Rules and Regulations for “Recordkeeping for Timely Deposit Insurance Determination,” to address issues raised during implementation of the final rule adopted in November 2016 (covered by InfoBytes here). Among other things, the proposal provides an optional one-year extension of the rule’s compliance date of April 1, 2020. The second proposal amends Part 330, which would allow satisfaction of proof of co-ownership for deposits of a joint account to be insured separately from deposits in respective individual accounts, to be established by other information contained in deposit account records, and not solely by signed signature cards of each co-owner. Comments on each proposal will be due within 30 days of publication in the Federal Register.

    Agency Rule-Making & Guidance FDIC Bank Compliance Deposit Insurance

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  • FDIC issues 2018 annual report

    Federal Issues

    On February 14, the FDIC released its 2018 Annual Report, which includes, among other things, the audited financial statements of the Deposit Insurance Fund and the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund. The report also provides an overview of key FDIC initiatives, performance results, and other aspects of FDIC operations, supervision developments, and regulatory enforcement. Highlights of the report include: (i) the FDIC’s efforts to adopt and issue proposed rules on key regulations under the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA); (ii) efforts to strengthen cybersecurity oversight and help financial institutions mitigate cyber risk; (iii) supervision focus on Bank Secrecy Act/Anti-Money Laundering compliance; and (iv) financial institution letters providing regulatory relief to institutions affected by natural disasters. The report also highlights the FDIC’s monitoring of financial technology developments through its various research groups and committees to better understand how technological efforts may affect the financial market. Lastly, the report covers the agency’s efforts to encourage de novo bank applications, including the December 2018 request for information soliciting comments on the deposit insurance applications process (covered by InfoBytes here).

    Federal Issues FDIC Bank Supervision EGRRCPA Bank Secrecy Act Anti-Money Laundering De Novo Bank Fintech Privacy/Cyber Risk & Data Security Deposit Insurance

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  • FDIC encourages more de novo bank applicants, launches initiatives to streamline and promote transparency in deposit insurance applications

    Agency Rule-Making & Guidance

    On December 6, the FDIC announced several initiatives designed to streamline and promote transparency in the federal deposit insurance application process, while encouraging more applications from de novo banks. According to FDIC Chairman Jelena McWilliams, the “application process should not be overly burdensome and should not deter prospective banks from applying.” As part of its initiative, the FDIC issued a request for information (RFI) soliciting feedback on all aspects of the deposit insurance application process—the RFI applies  to all institutions, including those with less than $1 billion in total assets, as well as traditional community banks. The RFI seeks comments on: (i) suggestions for modifying the application process as it relates to traditional community banks; (ii) potential ways to “support the continuing evolution of emerging technology and fintech companies . . . [and whether there are] particular risks associated with any such proposals”; (iii) aspects of the application process such as legal, regulatory, economic, or technological factors that may discourage potential applications; and (iv) other suggestions for addressing stakeholder concerns regarding the application process, as well as methods for improving effectiveness, efficiency, and transparency. Comments on the RFI will be accepted for 60 days following publication in the Federal Register.

    The FDIC also discussed a new, voluntary process for new deposit insurance applicants to request feedback on draft applications before filing formal submissions. “The new process is intended to provide an early opportunity for both the FDIC and organizers to identify potential challenges with respect to the statutory criteria, areas that may require further detail or support, and potential issues or concerns,” the announcement stated.

    In addition to updating publications related to the application process (available through FIL-83-2018), the FDIC also released FIL-81-2018 and FIL-82-2018, which respectively provide application processing timeframe guidelines and an overview of the review process for draft deposit insurance proposals.

    Agency Rule-Making & Guidance FDIC Fintech Deposit Insurance

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