The FDIC Board of Directors today proposed changes that would
clarify and simplify the agency's deposit insurance rules for the benefit of
consumers and bankers. The proposal is part of the FDIC's ongoing review
of policies and regulations to make them less burdensome and more
efficient. It also reflects the FDIC's efforts to help consumers and bankers
better understand the deposit insurance rules.
The most notable of the proposed changes would insert into the
rules a variety of straight-forward, easy-to-understand examples illustrating
how particular provisions affect basic types of accounts owned by
consumers. With these examples, the FDIC is considering a new way to
enable the average depositor to read the rules and quickly understand what
insurance coverage he or she has (or would have) at an FDIC-insured bank
In addition, three substantive revisions to the insurance rules were
proposed. They would:
Give the FDIC more flexibility to insure third-party
deposits made by law firms, real estate agents, title
companies and other businesses on behalf of their
Provide a six-month grace period after a depositor's death
for beneficiaries to rearrange inherited accounts if
necessary to avoid going over the $100,000 insurance
Clarify the insurance coverage of "living trust accounts," a
type of trust account that an owner can cancel or change
during his or her lifetime.
The examples included in the proposed rules illustrate how deposit
insurance currently applies to individual deposit accounts (those owned
only by one person, including a sole proprietor of a business), joint
accounts (those owned by two or more people and where all parties have
equal rights to withdraw money); and payable-on-death accounts (where
the owner indicates that upon his or her death the funds will pass to his or
her spouse, child or grandchild).
The Board also instructed the agency's staff to study whether
deposit insurance coverage would be significantly expanded if the rules
governing joint accounts and payable-on-death accounts were further
simplified. The Board is not proposing further simplification at this time.
Written comments on the proposed changes are due within 90 days
of their publication in the Federal Register.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore
public confidence in the nation's banking system. The FDIC insures deposits
at the nation's 11,452 banks and savings associations and it promotes the
safety and soundness of these institutions by identifying, monitoring and
addressing risks to which they are exposed.
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the FDIC's Public Information Center (801 17th Street, NW, Washington, DC
20434, telephone 800-276-6003 or (703) 562-2200).