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Inactive Financial Institution Letters
August 6, 1996
|TO:|| CHIEF EXECUTIVE OFFICER
|SUBJECT:|| 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.
| William F. Kroener, III
Distribution: All Insured Banks and Savings Associations
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