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Inactive Financial Institution Letters 


[Federal Register: May 14, 1997 (Volume 62, Number 93)]
[Proposed Rules]
[Page 26431-26435]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14my97-35]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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[[Page 26431]]

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 307

RIN 3064-AB88


Notification of Changes of Insured Status

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Proposed rule.

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SUMMARY: The FDIC is proposing to revise its regulation addressing
notification of changes of insured status to clarify that an assuming
insured depository institution must provide the FDIC with a
certification of any partial or total assumption of deposits from
another insured depository institution. This certification would not be
required, however, when deposits are transferred and assumed by an
operating insured depository institution from an insured depository
institution in default in an FDIC-administered receivership. Forms are
being provided to assist the industry with compliance with the
certification and depositor notice requirements.

DATES: Written comments on the proposal must be received by the FDIC on
or before July 14, 1997.

ADDRESSES: Send written comments to the Office of the Executive
Secretary, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429. Comments may be hand-delivered to Room F-400,
1776 F Street, NW., 20429, on business days between 8:30 a.m. and 4:30
p.m.; sent by facsimile: (202) 898-3838; or by Internet:
Comments@fdic.gov. Comments may be inspected and photocopied in the
FDIC Public Information Center, Room 100, 801 17th Street, NW.,
Washington, DC 20429, between 9:00 a.m. and 4:30 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: William P. McNamara, Examination
Specialist, Division of Supervision, (202) 898-6778; Rodney D. Ray,
Counsel, Legal Division, (202) 898-3556, Federal Deposit Insurance
Corporation, 550 17th Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: As required by section 303(a) of the Riegle
Community Development and Regulatory Improvement Act of 1994 (CDRIA)
(12 U.S.C. 4803), the FDIC has reviewed part 307 of the Code of Federal
Regulations and determined that the sections contained therein are
still beneficial to the public and needed by the FDIC. It is proposed
that the sections be revised to clarify their scope and applicability,
eliminate unnecessary compliance requirements, and assist the industry
with compliance.

Background

    Part 307 was originally promulgated in 1950 and was last revised on
May 31, 1983, prior to the enactment of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Public Law 101-
73, 103 Stat. 183 (1989).
    Section 307.1 implements section 8(q) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C. 1818(q)), as amended.1
The regulation requires an insured bank or insured branch of a foreign
bank which assumes deposits (assuming institution) of another insured
bank or insured branch of a foreign bank (transferring institution) to
provide the FDIC with a certification that it has assumed deposits of
the transferring institution. The assuming institution is required to
make the certification to the FDIC within 30 days after the date of the
assumption, and state the date the assumption took effect. The
certification is intended to satisfy section 8(q)'s ``satisfactory
evidence of such assumption'' requirement, which is a condition that
must be met before the transferring institution's insured status can be
terminated pursuant to section 8(q)(1) of the FDI Act (12 U.S.C.
1818(q)(1)). The certification also provides the FDIC with notice of
when the assumption takes effect for purposes of determining the
continuation of separate deposit insurance coverage on the assumed
deposits. See 12 CFR 330.3(g)(2).
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    \1\ Section 8(q) reads as follows:
    Whenever the liabilities of an insured depository institution
for deposits shall have been assumed by another insured depository
institution or depository institutions, whether by way of merger,
consolidation, or other statutory assumption, or pursuant to
contract (1) the insured status of the depository institution whose
liabilities are so assumed shall terminate on the date of receipt by
the Corporation of satisfactory evidence of such assumption; (2) the
separate insurance of all deposits so assumed shall terminate at the
end of six months from the date such assumption takes effect or, in
the case of any time deposit, the earliest maturity date after the
six-month period. Where the deposits of an insured depository
institution are assumed by a newly insured depository institution,
the depository institution whose deposits are assumed shall not be
required to pay any assessment with respect to the deposits which
have been so assumed after the semiannual period in which the
assumption takes place.
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    Section 307.2, which implements section 8(a)(6) of the FDI Act (12
U.S.C. 1818(a)(6)),2 requires an insured bank or insured
branch of a foreign bank (insured institution) seeking to voluntarily
terminate its insured status, but whose deposits will not be assumed,
to provide notice to its depositors (depositor notice) of the date its
insured status will terminate. The regulation further authorizes the
FDIC, through the appropriate FDIC Regional Director of the Division of
Supervision, to prescribe the form, manner and timing of the depositor
notice, as well as such other conditions as may be deemed necessary for
the protection of the institution's depositors.
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    \2\ Section 8(a)(6) reads as follows:
    PUBLICATION OF NOTICE OF TERMINATION.--The Corporation may
publish notice of such termination and the depository institution
shall give notice of such termination to each of its depositors at
his last known address of record on the books of the depository
institution, in such manner and at such time as the Board of
Directors may find to be necessary and may order for the protection
of depositors.
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    In response to a Notice of Opportunity for Comment, published on
December 6, 1995, at 60 FR 62345, as part of the CDRIA review process,
an industry group suggested that Sec. 307.1 be eliminated because the
industry group believed the FDIC could obtain the specified information
from regulatory approvals required for assumptions of deposit
liabilities by merger, consolidation, assumption or contract. The
industry group noted that the FDIC received antitrust notices and that
each governmental agency published administrative approvals in the
newspapers.
    After investigating the commentor's suggestion, FDIC staff has
recommended that Sec. 307.1 be retained. While it is possible to obtain
some of the information required by the regulation from other agencies,
bank merger applications, and newspaper notices,

[[Page 26432]]

this method of data collection would not provide the FDIC or the
industry with sufficient certainty of receiving the data or a clear
standard for judging when the FDIC had received the ``satisfactory
evidence of such assumption'', required by section 8(q)(1), to
terminate the transferring institution's insured status. The FDIC's
preliminary view is that the inefficiency and additional costs
associated with collecting the statutorily required information through
these means outweighs any benefit which would be realized by
eliminating the FDIC certification requirement. Finally, from a
practical standpoint, timely and accurate submissions of the required
information are needed to maintain the accuracy of the FDIC's structure
database, which is utilized to calculate, collect, and process deposit
insurance assessments.
    The FDIC is, however, proposing to revise Sec. 307.1 to define its
scope and applicability more precisely. Additionally, consistent with
the theme of the industry group's suggestion, the FDIC has determined
that it can obtain timely, accurate, and easily verifiable information
from records in the FDIC's possession regarding deposit liabilities
assumed when those liabilities are transferred and assumed by an
operating insured depository institution from an insured depository
institution in default, as defined by section 3(x)(1) of the FDI Act
(12 U.S.C. 1813(x)(1)), in an FDIC-administered receivership, and the
regulation would be revised accordingly.
    No comments were received regarding Sec. 307.2. Nonetheless, that
section was reviewed and it is proposed that the section be retained
because it assists the FDIC in ensuring that the interests of
depositors are safeguarded when an insured depository institution seeks
to voluntarily terminate its insured status without the assumption of
its deposit liabilities by another insured depository institution. See
e.g. 12 U.S.C. 1818(a)(6) (requiring notification of depositors when
insured status is voluntarily or involuntarily terminated) 3
and 1828(i)(4)(E) (requiring the FDIC to consider the convenience and
needs of the community to be served in approving the conversion of an
insured depository institution into a non-insured institution).
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    \3\ While part 307 addresses depositor notifications when an
institution seeks to voluntarily terminate its insured status, part
308 addresses depositor notifications for involuntary terminations
which are effected through enforcement proceedings.
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Proposed Revisions

    The existing sections in part 307 would be redesignated Secs. 307.2
and 307.3, respectively. A new Sec. 307.1 also would be added.
    The proposed revisions to the regulations and reasons supporting
them are as follows:

A. Institutions Covered

    Proposed Sec. 307.1 is new. It would be added to indicate that the
part applies to insured depository institutions, as defined in section
3(c)(2) of the FDI Act.4 Part 307, however, would not apply
to assumptions of insured deposits by uninsured depository
institutions; assumptions of uninsured deposits by insured depository
institutions; or assumptions of uninsured deposits by uninsured
depository institutions.
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    \4\ An ``insured depository institution'' is defined in section
3(c)(2) (12 U.S.C. 1813(c)(2)) as ``any bank or savings association
the deposits of which are insured by the Corporation pursuant to
this [the FDI] Act''. Federal branches and insured branches are
included in the definition of ``bank'' in section 3(a)(1)(A) (12
U.S.C. 1813(A)(1)(a)). Accordingly, insured branches would be
subject to the proposed regulation.
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    As revised, any insured depository institution assuming deposits
from another insured depository institution, other than those excluded
from coverage by proposed Sec. 307.2(b), would be required to provide
the certification. Section 307.3 would apply to insured depository
institutions seeking to voluntarily terminate their insured status
without the assumption of their deposit liabilities by another insured
depository institution.

B. Transitions Covered

    Proposed Sec. 307.2 would apply to partial and complete transfers
of deposits from transferring to assuming institutions.
    As presently written, Sec. 307.1 does not distinguish between
transactions involving partial deposit assumptions where a transferring
institution intends to continue in the business of receiving deposits
after the partial assumption takes effect, and total deposit
assumptions, where the transferring institution intends to cease
receiving deposits after the assumption takes effect. In the past, the
FDIC has viewed Sec. 307.1 as being applicable in both instances.
    The FDIC has taken the view that an order must be entered by the
FDIC before the transferring institution's insured status is
terminated.5 12 U.S.C. 1818(q), 12 U.S.C. 1828(i)(3), (4).
This reading avoids terminating the insured status of the transferring
institution when only a portion of that institution's deposits are
assumed and the transferring institution intends to continue in the
business of receiving deposits after the partial assumption takes
effect. This continues to be the FDIC's interpretation of the
termination of insured status provision contained in section 8(q)(1).
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    \5\ Orders are not issued by the Board of Directors in instances
where deposits are transferred and assumed upon the default of an
insured depository institution because the insured status of the
institution terminates automatically after default.
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    To avoid confusion on this issue, Sec. 307.2 (e) and (f) would be
added to the regulation. New Sec. 307.2(e) addresses the deposit
insurance coverage of the assumed deposits. It would be applicable to
partial and total assumptions of deposits from transferring
institutions and would utilize the assumption date specified in the
certification to determine when the separate deposit insurance coverage
on the assumed deposits terminates pursuant to section
8(q)(2).6 See also 12 CFR 330.3(g).
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    \6\ Under the regulation, FDIC's receipt of the certification
constitutes satisfactory evidence of the assumption, for purposes of
section 8(q). In appropriate circumstances, however, such as an
assuming institution's failure to provide the certification in the
manner specified, the regulation specifies that the FDIC also may
consider other evidence of such deposit assumption for purposes of
section 8(q).
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    Section 307.2(f) would address the insured status of the
transferring institution. It would be applicable to total deposit
assumptions where the transferring institution intends to cease
receiving deposits after the assumption takes effect. Under new
Sec. 307.2(f), when the FDIC receives the certification and a total
assumption has taken place (other than in instances where the FDIC has
been appointed receiver for an insured depository institution in
default), the FDIC will issue an order terminating the transferring
institution's insured status pursuant to applicable

[[Page 26433]]

provisions of the FDI Act, including section 8(q)(1).

C. FDIC Appointed Receiver for Insured Depository Institution in
Default

    Current Sec. 307.1 does not distinguish between deposit assumptions
where the transferring institution has been placed in receivership and
deposit assumptions between operating institutions. Since the FDIC
plays an integral role in the transfer and assumption of deposit
liabilities by operating institutions when it is appointed as receiver
for an insured depository institution in default, this situation may
represent an instance where, consistent with the previously mentioned
industry group suggestion, the FDIC has access to readily verifiable
information regarding the deposit transfer and assumption transaction
which makes compliance with the regulation unnecessary. Therefore,
Sec. 307.2(b) would be added to confirm that compliance with the
certification requirement is not necessary when the deposit liabilities
being transferred and assumed by an operating insured depository
institution from an insured depository institution in default and the
FDIC has been appointed as receiver for the institution.

D. Required Certification and Depositor Notice Letters

    Section 307.1 requires the assuming institution to certify that it
has assumed deposit liabilities from the transferring institution
within 30 days after the assumption takes effect. The regulation,
however, is silent regarding the form of the certification. In the
past, the FDIC has considered this requirement satisfied by a short
letter from the assuming institution containing the required
information. Therefore, to assist the industry with compliance and
eliminate ambiguity, Sec. 307.2(C) would be added to require that the
certification, which may follow the format provided in appendix A, be
provided by the assuming institution on its letterhead.
    Section 307.2 also requires that the FDIC approve the form of any
proposed depositor notices when an insured depository institution
intends to voluntarily terminate its insured status without having its
deposits assumed by another institution. Although the FDIC may require
additional or substitute information to be contained in the depositor
notice if warranted under the circumstances, the suggested depositor
notice provided in appendix B is being provided to assist the industry
with compliance. A copy of this notice must be provided to and approved
by the appropriate Regional Director of the Division of Supervision
prior to the notice being distributed to the institution's depositors.

Paperwork Reduction Act

    The collections of information contained in this proposed rule have
been submitted to the Office of Management and Budget (OMB) for review
and approval in accordance with the requirements of the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). Comments are
invited on: (a) Whether the collection of information is necessary for
the proper performance of the FDIC's functions, including whether the
information has practical utility; (b) the accuracy of the estimates of
the burden of the information collection, including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the information collection on respondents,
including through the use of automated collection techniques or other
forms of information technology.
    Comments should be addressed to the Office of Information and
Regulatory Affairs, OMB, Attention: Desk Officer Alexander Hunt, New
Executive Office Building, Room 3208, Washington, DC 20503, with copies
of such documents sent to Steven F. Hanft, Assistant Executive
Secretary (Regulatory Analysis), FDIC, Room F-400, 550 17th Street, NW,
Washington, DC 20429. All comments should refer to ``Part 307--
Certification and Depositor Notification.'' OMB is required to make a
decision concerning the collection of information contained in these
proposed regulations between 30 and 60 days after publication of this
document in the Federal Register. Therefore, a comment to OMB is best
assured of having its full effect if OMB receives it within 30 days of
publication. This does not affect the deadline for the public to
comment to the FDIC on the proposed regulation. Appendix A to this
Federal Register notice provides an example of a format that will
satisfy the collection of information requirement contained in
Sec. 307.2. Appendix B provides an example of a format that will
satisfy the collection of information requirement contained in
Sec. 307.3.
    The revisions to the collection of information in this proposed
rule are found in Secs. 307.2 and 307.3. Section 307.2 would require
insured depository institutions assuming deposits from other insured
depository institutions to provide the required certification whenever
a partial or complete assumption of deposits occurs. The certification
would be required to determine the date upon which the separate deposit
insurance coverage on the assumed deposit liabilities terminates, as
provided in section 8(q)(2) of the FDI Act. The certification also
would be utilized when a complete assumption of deposit liabilities
occurs to terminate the insured status of the transferring institution,
pursuant to section 8(q)(1) of the FDI Act. Section 307.3 would require
an insured depository institution seeking to voluntarily terminate its
insured status without the assumption of its deposits by another
insured depository institution to provide the FDIC with a copy of the
depositor notification letter required by section 8(a)(6) of the FDI
Act for review prior to the letter being sent to the institution's
depositors.
    The estimated average burden associated with all collections of
information in this proposed regulation is approximately 0.25 hours per
respondent. Additional information regarding the collections of
information and total estimated reporting burden in the proposed
regulation is summarized below:
    Title: Part 307--Certification and Depositor Notification.
    Frequency of Response: Occasional.
    Affected Public: The certification required by Sec. 307.2 would
affect all insured depository institutions assuming deposit liabilities
from other insured depository institutions. The depositor notification
required by Sec. 307.3 would affect all insured depository institutions
seeking to voluntarily terminate their insured status without having
their deposit liabilities assumed by another insured depository
institution.
    Estimated Number of Respondents: 942 for Sec. 307.2 certification
and 1 for Sec. 307.3 notice.
    Estimated Time per Response: 0.25 for section 307.2 certification
and 1 hour for Sec. 307.3 notice.
    Estimated Total Annual Burden: 236.50 hours.

Regulatory Flexibility Act

    Pursuant to subsections (b) and (c) of section 603 of the
Regulatory Flexibility Act, the FDIC provides the following initial
regulatory flexibility analysis:
    Reasons Why Agency Action is Being Considered: Insured depository
institutions would be required to provide the FDIC with a
certification, pursuant to Sec. 307.2, when they partially or
completely assume deposit liabilities from another insured depository
institution. The certification is necessary to implement the provisions
of section 8(q) of the FDI Act, regarding

[[Page 26434]]

termination of the insured status of the transferring institution and
termination of the separate deposit insurance coverage provided on
deposit accounts assumed by the assuming institution.
    Insured depository institutions seeking to voluntarily terminate
their insured status also would be required to provide the FDIC with a
copy of any proposed depositor notification before the notification is
provided to the institution's depositors. The depositor notification is
required by section 8(a)(6) of the FDI Act. The requirement for pre-
review of the proposed depositor notification letter by the FDIC
establishes a procedure to assure that the institution's depositors
receive information which the appropriate Regional Director of the
Division of Supervision deems appropriate regarding the institution's
intent to terminate its insured status. The requirement for pre-review
of the proposed depositor notification letter by the FDIC also is
intended to ensure that, prior to the termination of the institution's
insured status, depositors receive appropriate information concerning
federal deposit insurance coverage of their accounts once the
institution's insured status is terminated.
    Statement of Objectives of and Legal Basis for Proposed Rule: The
proposed rule implements the statutory requirements imposed by section
8(q) of the FDI Act for assumptions of deposits from insured depository
institutions. The proposed rule also implements the statutory depositor
notification requirement imposed by section 8(a)(6) of the FDI Act when
an insured depository institution seeks to voluntarily terminate its
insured status without the assumption of its deposit liabilities by
another insured depository institution.
    Description of and Estimate of the Number of Small Entities to
Which Proposed Rule Would Apply: The proposed rule would apply to all
insured depository institutions assuming deposit liabilities from
another insured depository institution. It also would apply to insured
depository institutions seeking to voluntarily terminate their insured
status without having their deposit liabilities assumed by another
insured depository institution. Based upon information supplied to the
FDIC by insured depository institutions or other federal banking
regulators, approximately 105 insured depository institutions which
were classified as small entities, for purposes of the RFA,
7 engaged in transactions during the 1996 calendar year
which would be covered by the proposed regulation. The FDIC has no
reason to believe that the number of small entities covered by the
proposed regulation will vary significantly in the future.
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    \7\ The RFA defines the term ``small entity'', in 5 U.S.C. 601,
by reference to definitions published by the Small Business
Administration. The Small Business Administration has defined a
``small entity'', for banking purposes, as a national or commercial
bank, savings institution or credit union with less than $100
million in assets. See 13 CFR 121.201.
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    Projected Reporting, Recordkeeping, and Other Compliance
Requirements of the Proposed Rule: Small entities engaging in
transactions governed by the proposed regulation should be maintaining
information regarding depositor accounts and deposit assumptions as
part of their normal banking operations. The number of deposit
assumption certifications required by Sec. 307.2 will depend upon the
number of deposit assumption transactions engaged in by an assuming
insured depository institution. The FDIC anticipates that the depositor
notification process established by Sec. 307.3 will only occur once
because depositor notification is required prior to the voluntary
termination of an insured depository institution's insured status with
the FDIC. The FDIC estimates that small entities will be able to comply
with the requirements imposed by the regulation by utilizing their
existing senior management and clerical support.
    Identification of Federal Rules Which may Duplicate, Overlap or
Conflict With the Proposed Rule: Some information concerning deposit
liabilities assumed or proposed to be assumed by merger, consolidation,
other statutory assumption, or contract is required to be filed with
the FDIC, pursuant to part 327 and Sec. 303.3 of the FDIC's rules and
regulations (12 CFR part 327 and 12 CFR 303.3, respectively).
Information filed with the FDIC pursuant to Sec. 303.3, however, is in
the form of an application which is subject to modification and
information filed pursuant to part 327, does not specify the
institution whose deposits were assumed or when the assumption took
effect. Therefore, while there is some overlapping of general
information being submitted, the information contained in the
certification required by proposed Sec. 307.2 provides the FDIC with
more specific and timely data needed to comply with the requirements of
section 8(q) of the FDI Act. Additionally, the regulation provides the
FDIC and industry with a clear standard for judging when an insured
depository institution's insured status should be terminated.
    Discussion of Significant Alternatives to Proposed Rule: The
proposed regulation imposes minimal reporting burdens upon insured
depository institution. As discussed in the preamble to the regulation,
the FDIC considered obtaining the information from other sources but
determined that those methods of data collection would not provide the
FDIC with sufficient certainty of receiving the data required by
section 8(q). Additionally, absent the regulation, the FDIC and
industry would have no clear standard for judging when an insured
depository institution's insured status should be terminated. To reduce
regulatory burden, however, the FDIC is excluding deposit assumptions
from FDIC-administered receiverships from the coverage of Sec. 307.2.
The FDIC also is providing recommended certification and depositor
notification forms as guidelines for the industry.

List of Subjects in 12 CFR Part 307

    Bank deposit insurance, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Board of Directors
proposes to revise part 307 of chapter III of the Code of Federal
Regulations to read as follows:

PART 307--NOTIFICATION OF CHANGES OF INSURED STATUS

Sec.
307.1  Scope and purpose.
307.2  Certification of assumption of deposit liabilities.
307.3  Notice to depositors when insured status is voluntarily
terminated and deposits are not assumed.

    Appendix A to Part 307--Certification of Change in Insured
Status.
    Appendix B to Part 307--Notice to Depositor of Voluntary
Termination of Insured Status.

    Authority: 12 U.S.C. 1818(a)(6), 1818(q), and 1819(a) [Tenth].

Sec. 307.1  Scope and purpose.

    (a) Scope. This part applies to all insured depository
institutions, as defined in section 3(c)(2) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C. 1813(c)(2)).
    (b) Purpose. This part sets forth the rules governing:
    (1) The time and manner of providing the FDIC with a certification
regarding the assumption of any deposit liabilities of an insured
depository institution by any insured depository institution; and
    (2) The notification which should be provided to depositors when an
insured

[[Page 26435]]

depository institution voluntarily terminates its insured status and
its deposits are not assumed by another insured depository institution.

Sec. 307.2  Certification of assumption of deposit liabilities.

    (a) Certification required. Whenever any of the deposit liabilities
of an insured depository institution are assumed (whether by merger,
consolidation, other statutory assumption, or by contract) by another
insured depository institution, the assuming insured depository
institution shall provide a written certification to the FDIC that it
has assumed deposit liabilities from the transferring insured
depository institution. The certification shall be provided to the FDIC
within 30 calendar days after the assumption takes effect and shall
state the date the assumption took effect.
    (b) Exception. The certification required by paragraph (a) of this
section shall not be required when deposit liabilities are transferred
and assumed by an operating insured depository institution from an
insured depository institution in default, as defined in section
3(x)(1) of the FDI Act (12 U.S.C. 1813(x)(1)), that has been placed in
an FDIC-administered receivership.
    (c) Form of certification. The certification required by paragraph
(a) of this section shall be provided on the letterhead of the assuming
insured depository institution, be signed by a duly authorized official
of the institution, and may follow the format of the certification
contained in appendix A to this part.
    (d) Filing. The certification required by paragraph (a) of this
section shall be provided to the appropriate FDIC Regional Director of
the Division of Supervision, as determined by reference to 12 CFR part
303, for the assuming insured depository institution.
    (e) Evidence of assumption. The receipt by the FDIC of the
certification required by paragraph (a) of this section shall
constitute satisfactory evidence of such deposit assumption, as
required by section 8(q) of the FDI Act (12 U.S.C. 1818(q)), and the
separate deposit insurance on the deposits so assumed shall terminate
in the manner specified in section 8(q)(2) of the FDI Act (12 U.S.C.
1818(q)(2)). In appropriate circumstances, the FDIC, in its sole
discretion, may also consider other evidence of such deposit assumption
to be satisfactory for purposes of section 8(q).
    (f) Issuance of an order. Except where the FDIC has been appointed
as receiver for an insured depository institution in default, the FDIC
shall issue an order terminating the insured status of the transferring
insured depository institution, pursuant to section 8(q)(1) of the FDI
Act (12 U.S.C. 1818(q)(1)), in the event that all of the transferring
institution's deposits are assumed by one or more insured depository
institutions.

Sec. 307.3  Notice to depositors when insured status is voluntarily
terminated and deposits are not assumed.

    (a) Notice required. Any insured depository institution seeking to
voluntarily terminate its insured status, but whose deposit liabilities
will not be assumed by another insured depository institution, shall
provide prior written notification to each of its depositors, at the
depositor's last address of record on the books of the institution, of
the date of the termination of its insured status under the FDI Act.
    (b) Prior approval of notice. Prior to distributing the notice to
depositors required by paragraph (a) of this section, a copy of the
proposed notice shall be provided to the appropriate FDIC regional
director of the Division of Supervision, as determined by reference to
12 CFR part 303, for approval. After being approved for distribution,
the notice shall be provided to depositors in the time and manner
specified by the appropriate regional director.
    (c) Form of notice. The notice to depositors required by paragraph
(a) of this section shall be provided on the letterhead of the insured
depository institution and, unless otherwise specified by the
appropriate Regional Director of the Division of Supervision, may
follow the format of the notice contained in appendix B to this part.
    (d) Obligations. The FDIC may require the insured depository
institution to take such other actions as the FDIC considers
appropriate for the protection of depositors.

Appendix A to Part 307--Certification of Change in Insured Status

(Date)

(Name and Address of Regional Director)

SUBJECT: Certification of Change In Insured Status

    This certification is being provided pursuant to 12 U.S.C.
1818(q) and 12 CFR 307.2(a). On (state the date the deposit
assumption took effect), (state the name of the depository
institution assuming the deposit liabilities) assumed (if a partial
assumption, state the amount) (if all deposits were assumed, state
``all'') of the deposits of (state the name of the insured
depository institution whose deposits were assumed). Please contact
the undersigned if additional information is needed.

(Name of Assuming Institution)

By:--------------------------------------------------------------------
(Name and Title)

Appendix B to Part 307--Notice to Depositor of Voluntary Termination of
Insured Status

(Date)

(Name and Address of Depositor)

SUBJECT: Notice to Depositor of Voluntary Termination of Insured
Status
    The insured status of (name of insured depository institution)
under the provisions of the Federal Deposit Insurance Act, will
terminate as of the close of business on the ________ Day of
____________________, 19____ (``termination date''). Insured
deposits in the (name of insured depository institution) on the
termination date, less all subsequent withdrawals from such
deposits, will continue to be insured by the Federal Deposit
Insurance Corporation, to the extent provided by law, until (date).
Any deposits made by you after the termination date, either new
deposits or additions to existing deposits, will not be insured by
the Federal Deposit Insurance Corporation.
    This notice is being provided pursuant to 12 U.S.C. 1818(a)(6) and
12 CFR 307.3(a).
    Please contact (name of institution official in charge of
depositor inquiries), at name and address of insured depository
institution if additional information is needed regarding this
Notice or the insured status of your account.

    By order of the Board of Directors. Dated at Washington, D.C.,
this 29th day of April, 1997.

Federal Deposit Insurance Corporation
Robert E. Feldman,
Deputy Executive Secretary.
[FR Doc. 97-12549 Filed 5-13-97; 8:45 am]
BILLING CODE 6714-01-P
Last Updated 07/17/1999 communications@fdic.gov