Proposed Amendments to Deposit Insurance Regulations
The FDIC Board of Directors is requesting comments on the attached
proposal to amend the regulations governing the insurance coverage of
joint accounts and "payable-on-death" ("POD" or revocable trust)
accounts. Comments are due by October 15, 1998. Summaries of the two
proposed amendments follow.
Under the current regulations, the coverage of qualifying joint accounts
is governed by a two-step process. First, all joint accounts owned by
the same combination of individuals at the same insured depository
institution are added together and the amount in excess of $100,000 is
uninsured. Second, the interests of each individual in all joint
accounts, whether owned by the same or some other combination of
individuals, are added together and insured up to a limit of $100,000.
Under the proposed amendment, the first step in this two-step process
would be eliminated. As a result, a joint account could be insured for
more than $100,000 (not possible under step one of the current
regulations), but no individual could obtain coverage in excess of
$100,000 for his or her combined interests in all joint accounts (the
same result mandated by step two of the current regulations).
All qualifying "POD" accounts owned by an individual at the same insured
depository institution are added together and insured up to $100,000 for
each "qualifying beneficiary." Under the current regulations, the list
of "qualifying beneficiaries" consists of the owner's spouse, children
and grandchildren. Under the proposed amendment, this list would be
expanded to include the owner's parents and siblings.
For further information, please contact Christopher Hencke in the FDIC's
Legal Division at (202) 898-8839.
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, NW, Room 100, Washington, DC
20434 (800-276-6003 or (703) 562-2200).