FDIC Federal Register Citations

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From: Andrew Kloeckner

Sent: Friday, August 29, 2003 9:17 AM

To: Comments

Subject: Comment on Insuring Living Trust Accounts

I support Alternative #2 as outlined in FIL 54 2003.

I feel strongly that simplicity is the best practice in what is perceived by

the public as a complicated issue. Alternative #1 requires bank staff to

read through the entire trust to make a determination of who the

beneficiaries are. First, many line personnel are not comfortable with

reading and interpreting trust documents. Secondly, this process takes

additional staff time to read and explain to the customer. Thirdly, many

customers are not comfortable with the bank knowing the details of their

trust agreement. This may impose an impediment to the process. Lastly, the

documentation requirement on the bank is significant. The listing of

beneficiaries and their ownership interest on the signature cards would pose

a significant documentation issue.

Alternative #2, however, is very straightforward. The front page of every

living trust states the owners/grantors of the trust. The branch staff can

easily make this determination. The coverage can be easily explained to the

customer. Account titling already reflects the existence of the trust

agreement.

I believe that the simplicity and straightforward nature of Alternative #2

make it the best option for both the banks and the customers.

Andy Kloeckner

Compliance Officer

Merchants Bank