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Federal Register Publications

FDIC Federal Register Citations



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FDIC Federal Register Citations

July 11, 2001

Re: Proposed Rulemaking Regarding the Business of Recetving Deposits

Dear Mr. Feldman:

This letter is submitted on behalf of Visa U.S.A. Inc. ("Visa') in response to the Federal Deposit Insurance Corporation's ("FDIC") request for comment on its proposed rulemaking regarding when a depository institution is engaged in the business of receiving deposits. Visa appreciates the opportunity to comment on this important matter.

The Visa payment system, of which Visa U.S.A. is a part, is the largest consumer payment system in the world. Visa plays a pivotal role in advancing new payment products and technologies to benefit its 21,000 member financial institutions and their millions of cardholders worldwide. In fact, there are more than 1 billion Visa-branded cards held by consumers globally, which generate over $1.8 trillion in annual volume worldwide and over $900 billion per year in the U.S. Visa is accepted at more than 20 million worldwide locations.

Under the Federal Deposit Insurance Act ("FDI Act") several factors must be considered by the FDIC before an application for federal deposit insurance can be approved. In addition, under the FDI Act, the FDIC must determine as a threshold matter that an applicant is a depository institution engaged in the business of receiving deposits other than trust funds. The FDIC now proposes to establish a regulatory standard for determining whether a depository institution is "engaged in the business of receiving deposits other than trust funds." Under the proposed rule, a depository institution would be engaged in the business of receiving deposits other than trust funds if the institution maintains one or more non-trust deposit accounts in the aggregate amount of $500,000 or more.

The proposed rule would clarify the FDIC's longstanding practice of approving federal deposit insurance applications from institutions that do not accept non-trust deposits from the general public, even where those institutions only intend to hold one type of deposit account, or where those institutions do not intend to hold more than one or a few non-trust deposit accounts. The proposed rule also would codify General Counsel Opinion No. 12 as a regulation. That Opinion provides that a depository institution is engaged in the business of receiving deposits, other than trust funds, if the institution holds one or more non-trust accounts in the aggregate amount of $500,000.

Visa strongly supports this proposal and believes the regulation will provide additional clarification as to when a depository institution is engaged in the business of receiving deposits other than trust funds. In particular, the regulation would bring needed clarification to this issue and ensure nationwide uniformity on this matter. It is evident from litigation to date that the existence of General Counsel Opinion No. 12, standing alone, without the adoption of a regulation, may not achieve this result. Uniformity on this issue, such as can be provided by a regulation, is critical to ensure that consumers and institutions alike can rely on the FDIC's determination about when an institution is engaged in the business of receiving deposits other than trust funds. Thus, we support the approach taken in the proposed regulation.

We appreciate the opportunity to comment on this important subject. If we can assist you further, or if you have any questions regarding the above, please feel free to call me at 415/932-2178.

Sincerely,
Russell W. Schrader

 
Last Updated 07/12/2001 regs@fdic.gov

Last Updated: August 4, 2024