FDIC Federal Register Citations

Re 12 CFR Part 330
Deposit Insurance Regulations; Living Trust Accounts

Dear Mr. Feldman:

In response to the Notice of proposed rulemaking in the matter captioned, as set forth in the Federal Register, Vol. 68, No. 125, June 30, 2003, we have studied the Notice in detail and share our thoughts with you as follow.

We do strongly favor Alternative One-providing coverage up to $100,000 per qualifying beneficiary named in the living trust irrespective of defeating contingencies.

We agree that the account should be designated as a living trust, revocable intervivos trust, or other similarly descriptive designation.

The requirement that "the deposit account records of the depository institution must indicate the names of the beneficiaries of the living trust and their ownership interests in the trust" is very appropriate. The proposed discretion in the FDIC to waive these disclosure and recordkeeping requirements in an institution closure situation should not mitigate the requirement of the institutions to obtain and retain such information, as such requirement will cause institutions to better inform their depositors and permit more exacting administration of the insurance fund.

Beneficiary relationship information should be required to be obtained by the depository institution to determine if they are qualifying beneficiaries. Though this would add a few minutes to the account opening process, it would serve to educate the depositor and tend to prevent subsequent disappointment re uninsured deposits.

The increase in insured living trust deposits under Alternative One appears to be de minimus.

In the hypothetical situation set forth wherein "if the spouse predeceases the grantor, then the grantor's two children each receives fifty percent of the trust assets," it would appear that the most appropriate rule would look at the beneficiaries without death related contingencies. Thus, in this case, there would be up to $100,000 of insurance­--attributable only with respect to the then living spouse.

 Our procedure in opening trust accounts (revocable intervivos or irrevocable, but not "Totten") includes completion by the depositor of our Trust Account Certification form. We do not accept a full trust document, as we don't want our account opening personnel to be in a position of judging the validity thereof. We enclose a copy of our Trust Account Certification form. Our depositors readily comply with our required use thereof.

 With respect to telephone and internet requests for trust accounts, we regularly require meeting in person with prospective depositors or through the use of the U.S. Postal Service.

 We applaud your attempts to simplify the insurance provisions. Thank you for considering our thoughts in this matter.

 Yours very truly,
 Robert L. Levin
 President
 Keystone Bank, St. Louis, MO