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Federal Deposit
Insurance Corporation

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

FDIC-88-28

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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