FDIC Federal Register Citations

July 16, 2001

Robert E. Feldman 
Executive Secretary 
Attention: Comments/OES
Federal Deposit Insurance Corporation
550 17th Street, N.W.
Washington, D.C. 20429

Dear Mr. Feldman:

On behalf of the Office of Thrift Supervision, I would like to thank you for the opportunity to comment on the Federal Deposit Insurance Corporation's (FDIC) notice of proposed rulemaking defining when a depository institution is "engaged in the business of receiving deposits other than trust funds." ¹ The FDIC has approved several insurance of accounts applications involving proposed federally chartered savings associations that do not accept deposits from the general public, but maintain one or more deposit accounts established by affiliates. Because the FDIC must find that an institution is "engaged in the business of receiving deposits other than trust funds" in order to grant deposit insurance, and is required to terminate deposit insurance after determining that an institution is no longer engaged in such business, it is important to establish certainty regarding the definition of this term.

We concur in the FDIC's reasoning in support of the proposal, and recommend the FDIC adopt the regulation in the form proposed. In response to your request for comment regarding whether one deposit account should be considered sufficient, we believe that the FDIC clearly has an adequate basis to determine that one deposit account is sufficient. To the extent the word "deposits" is equated with "deposit account" we note that the rules of construction for federal statutes provide that in determining the "meaning of any Act of Congress, unless the context requires otherwise ... words importing the plural include the singular. . . ."²  We are not aware of anything in the context of the Federal Deposit Insurance Act that requires the FDIC to conclude that the word "deposits" must be interpreted to exclude institutions that have a single deposit account. To the extent that "deposits" means simply placing funds in an institution, we note that even a single account with only one initial placement of funds by the accountholder may receive multiple deposits, i.e. in the form of accruing interest.

We support establishing the minimum amount for deposits as $500,000, for the reasons set forth in the proposal. (Compliance by those institutions that open for business to establish accounts for individuals could be accommodated by allowing them a period of time to build their deposit base.) Finally, we see no legal or policy reason to require institutions to offer a variety of different deposit types in order to meet the definition. Such a requirement could stifle innovation in the banking industry, and the relevant statutes do not specify that several different types of deposits must be available.

Thank you again for the opportunity to comment on the proposed regulation. If you wish to discuss any issue in greater detail, please contact John E. Bowman, Deputy Chief Counsel, at (202) 906-6372.

Sincerely,

Carolyn J. Buck 
Chief Counsel

¹ While the Director of OTS is an ex officio member of the FDIC Board, we are submitting this comment on behalf of the Office of Thrift Supervison.
² 12 U.S.C. § 1.