Stored Value Cards and Other Electronic Payment Systems
August 6, 1996
CHIEF EXECUTIVE OFFICER
FDIC Issues Guidance on Stored Value
Card Obligations as Deposits, Seeks Comment on Electronic
Payment Systems Issues, and Sets Public Hearing
The FDIC Board of Directors on July 16, 1996, approved
for Federal Register publication General Counsel Opinion
No. 8 (attached), clarifying conditions under which the
funds, or obligations, underlying stored value cards constitute
"deposits" within the meaning of section 3(l) of the Federal
Deposit Insurance Act. The Board also voted to seek public
comment on various electronic payment system issues addressed
in the second attached Federal Register notice. Comments
are due by October 31, 1996.
In addition to determining whether and under what circumstances
the funds underlying stored value cards meet the statutory
definition of "deposit" as addressed in the attached General
Counsel opinion, the FDIC has the authority to find and
prescribe by regulation that some or all stored value card
obligations (and obligations emanating from other electronic
payment systems) of a depository institution are deposit
liabilities by general usage.
The FDIC is seeking comment on various policy issues it
may wish to consider in determining whether to establish
a regulation that would include all or some stored value
card obligations (or the obligations from other electronic
payment systems) within the definition of deposit. Comments
are also being sought on new stored value card systems,
other electronic payment systems, and the safety and soundness
concerns of each.
Finally, included in the second attached Federal Register
notice is an announcement of a public hearing on the issues
addressed in the notice. At the hearing, one or more members
of the FDIC Board of Directors will hear oral comments from
interested persons on any matter covered in the notice.
The hearing will be held in the FDIC Board Room on September
12, 1996, from 9:00 a.m. until 4:30 p.m. If necessary, the
hearing will continue on the morning of September 13 and
on additional dates to be announced. To participate in the
hearing, a written request must be submitted by August 26
to the Office of the Executive Secretary, Federal Deposit
Insurance Corporation, 550 17th Street, N.W., Washington,
D.C. 20429. Each participant will be limited to a 15-minute
oral presentation and must submit a written summary of his
or her testimony by September 3.
Neither the second attached Federal Register notice nor
the public hearing will in any way affect the analysis or
conclusions in General Counsel Opinion No. 8.
For more information, please contact Marc J. Goldstrom,
Counsel in the FDIC's Legal Division, at (202) 898-8807.