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

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FDIC Federal Register Citations

July 19, 2003

Robert E. Feldman
Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Dear Mr. Feldman:

Thank you for this opportunity to comment on the proposed rules for insurance of living trust accounts. I would like to speak in favor of Alternative Two.

It is my opinion that Alternative Two would be the easier of the two alternatives to understand. By making a separate category of account coverage for living trusts, it would keep those accounts from getting confused with single, joint, or P.O.D. accounts and make in easier for financial institutions to show the amounts of insurance coverage to depositors. I agree that, when there are two grantors, the account should be insured to $200,000.00.

 I understand that Alternative Two will not change the insurance of any other category of accounts, meaning that P.O.D. accounts will continue to be insured as to qualifying beneficiaries as they have been for many years. I further understand that the living trust category would be a totally separate category and would not affect the single ownership or joint ownership eligibilities. If I am correct in my understanding of the Proposed Rules, I believe that Alternative Two would be the best solution.

 While Alternative One may offer advantages for customers, it places an added burden on financial institutions by requiring that the institutions determine the kinship of the beneficiaries to the grantor on all trust accounts. Living trust accounts already cause banks added administrative burdens because they are not uniform and each one must by scrutinized to determine beneficiaries and successor trustees. Besides, many grantors do not want to share any more than the bare minimums when it comes to the information contained in the trust.

 You have asked for comments on the requirement that the financial institution certify the existence of a living trust when a depositor opens the account. We think that such a requirement would not cause any material change in the way Fairfield Federal currently handles the opening of a trust account. We currently require that the customer give us a copy of three essential pages of the trust showing the title and grantors of the trust, the successor trustee, and the page showing the signatures of the grantors of the trust.

 Thank you for your consideration of my comments.

Judith M. Root
Vice President
Fairfield Federal
Lancaster, OH

Last Updated 08/12/2003

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