- Under the Federal Deposit Insurance Act, deposits carried on the books and records of foreign branches of U.S. banks are not considered deposits, unless the funds are payable both in the foreign branch and at an office of the bank in the United States (that is, they are dually payable).
- A recent Consultation Paper by the U.K.s Prudential Regulation Authority (PRA, formerly the Financial Services Authority) proposes that banks from non-European Economic Area countries that have depositor preference laws be prohibited from accepting deposits at their U.K. branches, unless the banks take steps to ensure that U.K. depositors are no worse off under depositor preference laws than the depositors in the home country if the bank fails. The PRA paper states that such efforts could include changing deposit account agreements to make U.K. branch deposits dually payable in the United States. As a result, some U.S. banks may change their deposit agreements to make their U.K. branch deposits payable in both the United Kingdom and the United States to provide depositor preference to U.K. branch deposits.
- The Final Rule amends the deposit insurance regulations, 12 CFR Part 330, to clarify that deposits carried on the books and records of a foreign branch of a U.S. bank are not insured deposits even if they are made payable both at that branch and at an office of the bank in any state of the United States. In addition, the Final Rule provides an exception for Overseas Military Banking facilities operated under Department of Defense regulations, or similar facilities authorized under federal statute.
Chief Executive Officer
Chief Financial Officer
Head of Deposit and Branch Operations
Chief Compliance Officer
Deposit Insurance Regulations
12 CFR Part 330
Final Rule - PDF (PDF Help)
F. Angus Tarpley III, Supervisory Counsel, Legal Division, (202) 898-6646
Matthew Green, Associate Director, Division of Insurance and Research, (202) 898-3670
Catherine Ribnick, Counsel, Legal Division, (202) 898-6803
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2013/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).