Section 627of the DFA repealed the statutory prohibition against the payment of interest on demand deposits, effective July 21, 2011. To conform its regulations to this DFA provision, the FDIC proposes to rescind 12 CFR Part 329, the regulation that implements the prohibition against paying interest on demand deposits with respect to insured state-chartered, nonmember banks, also effective July 21, 2011.
A regulatory definition of "interest" will still be useful, however, in interpreting the DFA requirements providing temporary, unlimited deposit insurance coverage for noninterest-bearing transaction accounts.
The FDIC therefore proposes to also transfer the definition of "interest" currently found at Part 329 to Part 330.
The FDIC seeks comment on every aspect of this proposed rule.
Chief Executive Officer
Chief Financial Officer
Head of Deposit and Branch Operations
Chief Compliance Officer
Regulatory Report Preparer
Interest On Deposits
12 C.F.R. Part 329
Deposit Insurance Coverage
12 C.F.R. Part 330
Notice of Proposed Rulemaking
Mark Mellon, Counsel, at firstname.lastname@example.org or (202) 898-3884; or Martin Becker, Senior Consumer Affairs Specialist, at MBecker@fdic.gov or (202) 898-6644.
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2011/index.html.
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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).