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Inactive Financial
Institution Letters
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Proposed Rule
Requiring Certain Bank Staff to Complete FDIC-Provided Training on Deposit
Insurance Coverage
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FIL-6-2011
February 9, 2011
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Summary:
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The FDIC Board of Directors has
approved the attached notice of proposed rulemaking that would require certain
employees of insured depository institutions (IDIs) to complete training on the
fundamentals of FDIC deposit insurance coverage. In addition, the proposed rule
would require IDI employees, when opening deposit accounts, to provide customers
with the FDIC's publication, Deposit Insurance Summary, if the customer
will have more than the Standard Maximum Deposit Insurance Amount (SMDIA)—
$250,000—at the institution. The proposed rule also would require every IDI to
provide a link to the FDIC's Electronic Deposit Insurance Estimator (EDIE) on its
Web sites. The FDIC believes the proposed rule would achieve the balance of
minimizing regulatory burden with ensuring that depositors are better informed. The
FDIC welcomes comment on the proposed rule for 60 days.
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Highlights:
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The FDIC believes it is critical for depositors and IDI employees to have
access to accurate deposit insurance information. Each year, the FDIC
receives tens of thousands of inquiries from depositors and IDI employees
who need information about FDIC insurance coverage. Many depositors report
they were unable to get the information they need from their IDI and some
report receiving inaccurate information. The FDIC is concerned that this
situation could result in financial harm to depositors and could undermine
confidence in the federal deposit insurance system.
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The proposed rule would address these concerns by requiring all IDI
employees with the authority to open accounts and/or respond to customer
questions about deposit insurance coverage to complete a computer-based
training module, provided by the FDIC, on the basic principles of FDIC
deposit insurance coverage.
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In addition, the proposed rule would require IDIs, when opening new deposit
accounts, to ask whether the customer has other accounts at the IDI and
whether the customer's aggregate deposits may exceed the SMDIA. If the
customer's deposits may exceed the SMDIA, the IDI would be required to
provide the customer with a copy of FDIC's publication, Deposit
Insurance Summary.
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The rule also would require IDIs to provide a link to the FDIC's Electronic
Deposit Insurance Estimator on their Web sites (if any).
Continuation of FIL-6-2011
Distribution:
FDIC-Insured Institutions
Suggested Routing:
Chief Executive Officer
Chief Financial Officer
Head of Deposit and Branch Operations
Chief Compliance Officer
Training Officer
Regulatory Report Preparer
Related
Topics:
Deposit Insurance Coverage
12 C.F.R. Part 330
Attachment:
Notice of Proposed Rulemaking –
Printable Version (PDF Help)
Access FDIC's Electronic Deposit Insurance
Estimator or Deposit
Insurance Summary brochure
Contact:
Catherine Ribnick, Counsel, at CRibnick@fdic.gov or (202) 898-6803; or
Martin Becker, Senior Consumer Affairs Specialist, at MBecker@fdic.gov or (202) 898-6644..
Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web
site at www.fdic.gov/news/news/financial/2011/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may be obtained through the
FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA
22226 (1-877-275-3342 or 703-562-2200).
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Financial
Institution Letters
FIL-6-2011
February 9, 2011
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Proposed
Rule Requiring Certain Bank Staff to Complete FDIC-Provided Training on
Deposit Insurance Coverage
The FDIC receives tens of thousands of telephone calls, emails, and
correspondence annually from depositors and employees of insured depository
institutions (IDIs) seeking information and advice about FDIC deposit insurance
coverage. These inquiries reveal that many depositors are unsure whether their
deposits are covered in full by FDIC insurance, and that IDI employees often are
unfamiliar with the limits that apply to deposit insurance coverage. In
addition, the FDIC regularly receives complaints from IDI customers asserting
that their IDI was unable to answer their deposit insurance questions or, in
some cases, may have provided inaccurate deposit insurance guidance.
FDIC regulations currently do not require employees at IDIs to receive training
in the basic principles of FDIC deposit insurance coverage or to assist
customers in ascertaining whether their deposits are fully covered by federal
deposit insurance. The FDIC is concerned that inaccurate deposit insurance
information could cause financial harm to depositors and have the potential to
undermine customer confidence in the federal deposit insurance system.
Since many depositors' first inquiry about deposit insurance coverage is with
their IDI, it is important that IDI employees who open new accounts or provide
deposit insurance information to customers receive training in the fundamentals
of FDIC deposit insurance coverage. Knowledge of FDIC deposit insurance rules
and resources will help IDI employees answer customer questions about their
deposit insurance coverage, which in turn will help ensure that depositors have
the information they need to make informed decisions about the amount of
insurance coverage they have for funds deposited in IDIs.
The proposed rule has three requirements:
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It would require certain IDI staff to complete a computer-based training
module, provided by the FDIC, on the basic principles of FDIC deposit
insurance coverage. This training would be required for all IDI employees
with the authority to open accounts and/or respond to customer questions
about deposit insurance coverage. The proposal would require that the
training be completed within 30 days of beginning employment for all new
employees covered by the rule, within 60 days of the effective date of the
rule for current employees, and annually thereafter for all covered
employees.
The FDIC would provide the training to IDIs in the form of a computer-based
training module that would be self-administered by covered employees. The
FDIC will provide the training module to IDIs at no cost. The FDIC estimates
that the average time required for an IDI employee to complete the training
is 120 minutes, and most employees should be able to complete the training
within two hours.
- The proposed rule would require IDI staff, when opening a new deposit account,
to ask whether the customer has other accounts at the institution and whether
the aggregate deposits may exceed the Standard Maximum Deposit Insurance Amount
(SMDIA). If the customer's deposits at the IDI may exceed the SMDIA, the IDI
would be required to provide the customer with a copy of FDIC's publication,
Deposit Insurance Summary. The rule would not require an IDI to provide
counsel or advice to the customer regarding how to structure multiple deposit
accounts to maximize deposit insurance coverage.
The rule would apply to all types of deposit accounts opened by a customer,
with the exception of pass-through accounts for which the IDI does not, in
the normal course of business, keep records of the beneficial owners. The
rule would not impose a deposit insurance training requirement on third
parties (e.g., deposit brokers or affinity groups) that directly or
indirectly promote the deposit of funds in a specified IDI. However, the
FDIC urges any entity that encourages or facilitates the placement of
deposits in IDIs to provide appropriate information in response to client
inquiries regarding FDIC deposit insurance coverage.
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The proposed rule would require all IDIs to provide a link to the FDIC
Electronic Deposit Insurance Estimator (EDIE) on their Web sites (if any).
The FDIC believes the proposed rule would impose minimal burden on institutions and
this burden would be more than offset by the benefits to be realized by depositors
and by the IDIs themselves. The Corporation will remain, of course, the principal
resource on deposit insurance coverage.
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