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FDIC Federal Register Citations

From: Thornburg, Keith [mailto:keith.thornburg@ded.mo.gov]
Sent: Thursday, August 25, 2005 2:44 PM
To: Comments
Subject: Deposit Insurance Coverage; Stored Value Cards and Other Nontraditional Access Mechanisms

My name is Keith Thornburg. I am the Chief Counsel to the Missouri Division of Finance - Missouri's bank regulator. These comments are my personal comments.

I dislike the "nontraditional access mechanisms". For many Americans - use of electronic access mechanisms to financial resources or accounts is the norm. ACH transactions are passing the use of paper checks. I would suggest using phrase "Electronic access mechanisms" in lieu of "Nontraditional access mechanisms" and rephrasing rule accordingly.

I believe the commentary equating many forms of electronic access to transactions involving money orders or travelers checks is spot on. In most cases this is exactly what is occurring.

I do not believe there is any issue with respect to deposit coverage when a sub-account is maintained at the bank or the card issuer even though the bank does not know the identity of the cardholder. Comments indicate a bank money order would be treated as an insured deposit - this is not any different (see page 45579 of the FR).

With respect to disclosures - any time deposit insurance coverage is intended or required the statement "Funds available through this card are individually insured by the FDIC to the Cardholder." AND the name of the bank where the funds are deposited should appear somewhere on the card. This notice should never be on any other variation of a stored value card.

Some agency - and perhaps the FDIC at least with respect to cards insured to the holder - should address card inactivity fees and whether they can be charged and how they should be disclosed. This may be an issue more appropriate to the Fed.


 


Last Updated 08/26/2005 Regs@fdic.gov

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