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4000 - Advisory Opinions

Whether Brokered CDs Purchased at Different Institutions Will be Separately Insured After a Merger of Those Institutions

August 25, 2000


Joseph A. DiNuzzo, Counsel

The Legal Division has received your August 23, 2000, letter concerning deposits in institutions that merge.

Specifically, your financial institution holds two CDs, one a brokered CD purchased from Bank A and the other also a brokered CD purchased from Bank B, which has since merged into Bank A. You have requested that FDIC confirm your opinion that these CDs would be separately insured as indicated by question and answer number 43 contained in our publication, Your Insured Deposit.

We concur with your interpretation of this question as it relates to your institution's situation. The CD purchased from Bank B would be separately insured, up to $100,000, from the Bank A CD. These CDs would be separately insured until the maturity date of the Bank B CD, indicated in the materials enclosed with your letter to be August 18, 2004. (For purposes of this response, we are assuming that the Credit Union holds no other deposits issued by Bank B).

I hope that this information is helpful to you. If you have any questions, please call me at (202) 898--7349.

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