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    FDIC Amends Rule on Timely Deposit Insurance Determination

    July 30, 2019

    FDIC is amending the rule entitled “Recordkeeping for Timely Deposit Insurance Determination” (part 370) to clarify certain requirements, better align the burdens of the rule with the benefits, and make technical corrections. The rule will be effective from October 01, 2019. The policy objective of the final rule is to reduce compliance burdens for insured depository institutions covered by the FDIC rule (part 370) while maintaining its benefits and continuing to support the ability of FDIC to promptly determine deposit insurance coverage in the event such an insured depository institution fails.

    Part 370 requires each insured depository institution with two million or more deposit accounts to

    • Configure its information technology (IT) system to be capable of calculating the insured and uninsured amount in each deposit account by right and capacity, for use by FDIC in making deposit insurance determinations in the event of the failure of a covered institution
    • Maintain complete and accurate information needed by FDIC to determine deposit insurance coverage with respect to each deposit account, except as otherwise provided

    FDIC is amending part 370 in advance of the compliance date for the original covered institutions. FDIC is making the following changes to part 370 that, among other things:

    • Include an optional one-year extension of the compliance date on notification to FDIC
    • Provide clarifications about compliance certification and the effect of a change in law or a merger transaction on compliance
    • Enable insured depository institutions that are not covered institutions to voluntarily become covered institutions under part 370 and be released from the provisional hold and standard data format requirements of § 360.9
    • Revise the actions that must be taken by a covered institution with respect to deposit accounts with "transactional" features that are insured on a pass-through basis
    • Amend the alternative record-keeping requirements for certain types of deposit relationships
    • Clarify the process for requesting exception from requirements of the rule, provide for published notice of the FDIC responses, and provide that certain exceptions may be deemed granted
    • Make corrections and technical and conforming changes

    On April 11, 2019, FDIC had proposed to amend part 370 to provide for elective extension of the compliance date, revise the treatment of deposits created by credit balances on debt accounts, modify the requirements relating to accounts with transactional features, change the procedures regarding exceptions, and clarify matters related to certification requirements. In the proposal, FDIC also proposed certain technical changes to part 370. It was the belief of FDIC that this proposal would better align the burdens imposed by part 370 on covered institutions with the benefit of better enabling FDIC to achieve its statutory obligations and policy objectives. The comment period on the proposal ended on May 13, 2019. FDIC received five comment letters, which it considered when developing the final rule.


    Related Link: Federal Register Notice

    Effective Date: October 01, 2019

    Keywords: Americas, US, Banking, Deposit Insurance, Part 370, Recordkeeping, Covered Institutions, Technical Amendments, Insured Depository Institutions, FDIC

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