via email
From: Jim Meredith Sent: Thursday, August 28, 2003 3:38 PM To: Comments Subject: Deposit Insurance Regulations; Living Trust Accounts
August 28, 2003
Mr. Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, D.C. 20429
The
Operations & Technology Committee of the New Jersey League of Community
Bankers*is pleased to comment on the Federal
Deposit Insurance Corporation proposal to clarify and simplify its
regulations on the insurance coverage of living trust accounts.
The committee applauds
the effort to simplify deposit insurance rules and generally supports
the first alternative, which would provide up to $100,000 of coverage
per qualifying beneficiary named in the living trust irrespective of any
defeating contingencies that the trust may contain. As has been noted
by America's Community Bankers, we also have a concern that the
proposal would require an institution to "certify" the existence of a
living trust when a depositor opens a living trust account.
Our concern is that the term
"certification" could be interpreted to require bank personnel to render
an implicit legal opinion as to the trust's validity, which is beyond
the capacity of many accounts representatives of community banks. Also,
bank certification could be rendered meaningless at any subsequent time
since living trusts are revocable during the grantor's lifetime.
Imposition of a certification requirement would also significantly
impact an institution's operating procedures by requiring the recording
of additional levels of detail that may not be of material interest to
the bank.
We
believe that requiring insured depository institutions to maintain a
trustee's or grantors contact information would be more appropriate than
the proposed certification requirement. In the event that institutions
are required to retain detailed beneficiary information, we would
strongly encourage the FDIC to develop a model form that would place the
burden of recording accurate beneficiary information on the grantor or
the trustee. The grantor would complete the form and certify its
accuracy.
We appreciate the opportunity to
provide these comments on this proposal.
Sincerely,
James M. Meredith
Senior Vice President
*
The New Jersey League of Community Bankers is a trade association
representing 75 of New Jersey's savings banks, savings & loan
associations and commercial banks with total assets of over $50
billion. The League's wholly-owned subsidiary, the Thrift Institutions
Community Investment Corporation ("T.I.C.I.C.") assists League members
in forming consortia to make loans on low-to-moderate income housing
projects. T.I.C.I.C. has facilitated loans on over 3,600 affordable
housing units throughout New Jersey and has loans in process on nearly
1,700 more housing units.
