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Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Inactive Financial Institution Letters 

Deposit Imsurance Simplification
May 29, l996
SUBJECT: FDIC Seeks Comments on Efforts
to Simplify Deposit Insurance Regulations

Distribution: All Insured Banks and Savings Associations


The FDIC Board of Directors on May 14, 1996, agreed to issue the attached advance notice of proposed rulemaking on simplifying the FDIC's rules on deposit insurance. The Board's action is part of its ongoing review of policies and regulations designed to reduce regulatory burden and improve efficiency. It also is part of the FDIC's efforts to promote public understanding of deposit insurance and to increase financial institution and consumer understanding of deposit insurance.

The FDIC is seeking comment on whether the deposit insurance rules should be simplified and, if so, how. If the Board finds simplification to be warranted, it will propose specific amendments on which industry and public comment will again be invited. The purpose of the notice is to solicit comments to help guide the possible preparation of a proposed rule. The FDIC will accept comments through August 20, 1996.

The advance notice of proposed rulemaking requests comments on all aspects of streamlining, simplifying and clarifying the insurance rules, including the likely effect of such changes on consumers and the banking industry. The FDIC also is seeking suggestions on the following specific revisions that the Board is considering:

  • Rewriting certain parts of the insurance rules to make them clearer and easier to understand.

  • Eliminating step one of the two steps involved in determining insurance coverage for joint accounts.

  • Revising the recordkeeping rules allowing the FDIC more flexibility (for the benefit of depositors) in determining the ownership of deposits held in a custodial or fiduciary capacity.

  • Changing the rules on "payable upon death" accounts.

  • Modifying the way the FDIC insures certain types of accounts upon the death of the owner(s) of the accounts.

  • Recommending that the Federal Deposit Insurance Act be amended to change the way employee benefit plans are insured.

  • Revising the rules on living trust accounts.

For more information, please contact Joseph A. DiNuzzo, Acting Senior Counsel, at (202) 898-7349, or Adrienne George, Attorney, at (202) 898-3859 in the FDIC Legal Division.

William F. Kroener, III
General Counsel

The attachment to this Financial Institution Letter is not currently available in electronic format. Until it is in a form that will allow us to post it to the internet, you may obtain hard copy or fax from:

Public Information Center
Room 100
801 17th St. NW
Washington, DC 20434

ph: (703) 562-2200

Last Updated 07/13/1999

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