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Inactive Financial Institution Letters 

Deposit Insurance Simplification

May 16, 1997


SUBJECT: FDIC Seeks Comments on Proposal to Simplify Deposit Insurance Regulations

The FDIC Board of Directors on April 29, l997, proposed a rule to clarify and simplify the agency's deposit insurance regulations. The action reflects the FDIC's efforts to help consumers and bankers better understand deposit insurance rules. The FDIC will accept comments on the proposed rule through August 12, l997.

The proposed rule includes many technical changes to the insurance regulations, the most notable being the inclusion of common examples illustrating how the FDIC insures the most basic types of deposit accounts, primarily consumer accounts. For every type of consumer account--individual (or single-ownership), joint, and payable-on-death (POD)--the proposed rule provides a straightforward, easy-to-understand example.

The publication also includes three proposed substantive revisions to the deposit insurance rules that would:

  • Revise the deposit insurance recordkeeping rules to provide the FDIC with more flexibility in considering the actual ownership interests in deposit accounts held by fiduciaries;

  • Permit a six-month period of continued identical insurance coverage following an account holder's death for those accounts in which the decedent had an ownership interest; and

  • Clarify the POD rules to indicate they may apply to accounts held in connection with living trusts, but only if the requirements of the POD regulation are satisfied.

The Board's proposal is part of its ongoing review of regulations and policies designed to reduce regulatory burden and improve efficiency.

The proposed rule is attached. For more information about the proposal, please contact Joseph A. DiNuzzo, Counsel in the FDIC's Legal Division, at (202) 898-7349.

William F. Kroener, III
General Counsel

Attachment: Federal Register, 12 CFR Part 330, Vol. 62, No. 93, May 14, 1997, pp. 26435-26449

Distribution: All Insured Banks and Savings Associations

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 (800-276-6003 or (703) 562-2200). An electronic version of this press release, with a link to the Federal Register attachment, is available at the FDIC website, /banknews -- then go to Financial Institution Letters.

Last Updated 07/16/1999

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