Federal Deposit
Insurance Corporation

Dear Mr. Feldman:

The Independent Community Bankers of America (ICBA)¹ appreciates the opportunity to offer comments in connection with the interim rule concerning deposit insurance regulations. The interim rule, effective on April 1, 2006, implements certain revisions to the Federal Deposit Insurance Act made by the Federal Deposit Insurance Reform Act of 2005 and provides for (1) inflation adjustments to increase the current standard maximum deposit insurance amount of $100,000 on a five-year cycle beginning in 2010, (2) increases in the deposit insurance limit for certain retirement accounts from $100,000 to $250,000, subject to inflation adjustments; and (3) per-participant insurance coverage for employee benefit plan accounts, even if the depository institution at which the deposits are placed is not authorized to accept employee benefit plan deposits. 

ICBA Position 

ICBA strongly supported the provisions of the Federal Deposit Insurance Reform Act of 2005 (“FDI Reform Act”) that raise the insurance coverage limits for certain insured deposits and that provide for inflation adjustment of coverage limits in the future.  ICBA also strongly supports these interim regulations.  We commend the FDIC for issuing these regulations and making them effective within two months of the passage of the FDI Reform Act so that community banks can take quick advantage of the increase in coverage limits for retirement accounts.  We agree that the FDIC had “good cause” under the Administrative Procedure Act to waive the customary 30-day delayed effective date and make the interim regulation effective immediately.

ICBA also agrees that with the content of the interim regulation particularly since it tracks the language in the FDI Act of 2005.  The proposal to add a definition of “standard maximum deposit insurance amount” (SMDIA) to section 330.1 of the FDIC regulations and replacing all references of $100,000 with the acronym “SMDIA” will avoid having to change the Part 330 regulations every time the SMDIA is adjusted for inflation.  We also commend the FDIC for amending only the coverage amounts for retirement accounts and not changing the definitions of “retirement account” or “self-directed.”  This will make it easier for bankers to communicate to their customers the increase in insurance coverage limits for retirement accounts.

ICBA appreciates the opportunity to offer comments on the FDIC’s interim regulations concerning deposit insurance coverage.  If you have any questions about our letter, please do not hesitate to contact me at 202-659-8111 or Chris.Cole@icba.org.

Sincerely
Christopher Cole
Regulatory Counsel