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Financial Institution Letter

Notice of Proposed Rulemaking on Simplification of Deposit Insurance Rules for Trust and Mortgage Servicing Accounts

July 20, 2021  |  FIL-51-2021


The Federal Deposit Insurance Corporation (FDIC) published a proposed rule to amend the deposit insurance regulations for trust accounts and mortgage servicing accounts. The changes are intended to make the deposit insurance rules easier to understand for depositors and bankers, facilitate more timely insurance determinations for trust accounts in the event of a bank failure, and enhance consistency of insurance coverage for mortgage servicing account deposits. Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.

The proposed rule and a Fact Sheet can be found on the FDIC’s website.

Statement of Applicability: This Financial Institution Letter applies to all FDIC-insured institutions.


  • The FDIC is publishing for comment a proposed rule to simplify deposit insurance coverage rules.
  • The proposal would establish a simple, consistent formula for calculating deposit insurance coverage for all revocable and irrevocable trust accounts.
  • Under the proposed rule, the revocable and irrevocable trust deposit insurance categories would be merged into a new “trust accounts” category.
  • A deposit owner’s trust deposits would be insured in an amount up to $250,000 per beneficiary, not to exceed five beneficiaries, regardless of whether a trust is revocable or irrevocable, and regardless of contingencies or the allocation of funds among the beneficiaries.
  • This would provide a maximum amount of deposit insurance coverage of $1,250,000 per owner, per insured depository institution for trust deposits.
  • Additionally, mortgage servicers’ advances of principal and interest funds on behalf of mortgagors in a mortgage servicing account would be insured up to $250,000 per mortgagor, consistent with the coverage for payments of principal and interest collected directly from mortgagors.
  • Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.


FDIC-Supervised Institutions

Suggested Routing:

Chief Operating Officer
General Counsel