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Federal Deposit
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Each depositor insured to at least $250,000 per insured bank

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4000 - Advisory Opinions

FDIC Prior Approval of the Transfer of Deposit Liabilities


March 18, 1988

Roger A. Hood, Assistant General Counsel

We understand, from information submitted by our Dallas Regional Office, that your client, *** assumed some $718,000 in deposits from *** Bank, an uninsured institution, without obtaining the prior written approval of the FDIC as required by section 18(c)(1)(B) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)(1)(B)). The applicability of this provision does not depend, as your client seemingly believes, on the existence of a formal written agreement between the two institutions to transfer deposit liabilities; it is sufficient that the parties actively and deliberately cooperated to achieve substantially the same result by soliciting depositors to transfer their accounts, in consequence of which (according to the President of *** ) at least "eighty-six certificates of deposit with an aggregate value of $718,000 were transferred [from the *** Bank to *** ] without written deposit contracts or new *** certificates of deposit." To read the statute as not applying in these circumstances would be to render it a nullity in substantial part, and is therefore impermissible.

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