Quiero saber acerca de...

41768

Federal Register / Vol. 86, No. 146 / Tuesday, August 3, 2021 / Proposed Rules
times of financial turmoil, including the period from 2008 to 2013, when the United States experienced a severe financial crisis, and more recently in 2020 during the financial stress associated with the COVID19
pandemic. During the more than 88
years since the FDIC was established, no depositor has lost a penny of FDICinsured funds.
The FDI Act establishes the key parameters of deposit insurance coverage, including the standard maximum deposit insurance amount SMDIA, currently $250,000.4 In addition to providing deposit insurance coverage up to the SMDIA at each IDI
where a depositor maintains deposits, the FDI Act also provides separate insurance coverage for deposits that a depositor maintains in different rights and capacities also known as insurance categories at the same IDI.5 For example, deposits in the single ownership category are separately insured from deposits in the joint ownership category at the same IDI.
The FDICs deposit insurance categories have been defined through both statute and regulation. Certain categories, such as the government deposit category, have been expressly defined by Congress.6 Other categories, such as joint deposits and corporate deposits, have been based on statutory interpretation and recognized through regulations issued in 12 CFR part 330
pursuant to the FDICs rulemaking authority. In addition to defining the insurance categories, the deposit insurance regulations in part 330
provide the criteria used to determine insurance coverage for deposits in each category.

jbell on DSKJLSW7X2PROD with PROPOSALS

2. Evolution of Insurance Coverage of Trust Deposits Over the years, deposit insurance coverage has evolved to reflect both the FDICs experience and changes in the banking industry. The FDI Act includes provisions defining the coverage for certain trust deposits,7 while coverage for other trust deposits has been defined by regulation.8 The following review of historical coverage for trust deposits provides context for the FDICs proposed amendments to the trust rules.
In the FDICs earliest years, deposit insurance coverage for trust deposits depended upon whether the 4 See
12 U.S.C. 1821a1E.
12 U.S.C. 1821a1C deposits maintained by a depositor in the same capacity and the same right at the same IDI are aggregated for purposes of the deposit insurance limit.
6 12 U.S.C. 1821a2.
7 See 12 U.S.C. 1817i, 1821a.
8 See 12 CFR 330.10, 330.13.
5 See
VerDate Sep<11>2014

16:59 Aug 02, 2021

Jkt 253001

beneficiaries of the trust were named in the banks records. If the beneficiaries were named in the banks records, the trust deposit was insured according to the beneficiaries respective interests because the deposit was held in trust for the beneficiaries. If beneficiaries were not named in the banks records, the grantor trustee was treated as the depositor instead and insured to the applicable limit then $5,000; however, the trust deposit was insured separately from the trustees other deposits, if any, at the same bank.9 If the bank itself was designated as trustee of the trust, deposits of the trust were insured up to the $5,000 limit for each trust estate pursuant to statute.10
Over time, some states began recognizing the existence of a trust based on a designation in the banks records that a deposit was held in trust for another personeven in the absence of a written trust agreement. In 1955, the FDICs then-General Counsel concluded that if relevant state law recognized these Totten trusts 11 and the depositor complied with the law in establishing the trust, the FDIC would insure these deposits separately from the depositors other deposit accounts.12
This was the first time the FDIC insured informal trusts as trust deposits.
The FDIC further clarified insurance coverage for trust deposits in 1967 when it issued rules defining the deposit insurance categories that the FDIC had recognized.13 These rules defined a testamentary accounts category that included revocable trust accounts, tentative or Totten trust accounts, and payable-on-death accounts and similar accounts evidencing an intention that the funds shall belong to another person upon the depositors death.
Testamentary deposits were insured up to the applicable limit which Congress had raised to $15,000 for each named beneficiary who was the depositors spouse, child, or grandchild. If the 9 See
1934 FDIC Annual Report at 143.
Banking Act of 1935, Public Law 74305
Aug. 23, 1935, section 101 Trust funds held by an insured bank in a fiduciary capacity whether held in its trust or deposited in any other department or in another bank shall be insured in an amount not to exceed $5,000 for each trust estate, and when deposited by the fiduciary bank in another insured bank such trust funds shall be similarly insured to the fiduciary bank according to the trust estates represented..
11 The name Totten trust is derived from an early New York court decision recognizing this form of trust, Matter of Totten, 179 N.Y. 112 N.Y.
1904. Many other states have recognized similar types of accounts, commonly known as payableon-death accounts or tentative trust accounts.
12 Separate Insurability of Totten Trust Accounts June 1, 1955, Federal Banking Law Reporter 92,583.
13 32 FR 10408 July 14, 1967.
10 See
PO 00000

Frm 00010

Fmt 4702

Sfmt 4702

named beneficiary did not satisfy this kinship requirement, the deposit was aggregated with the depositors individual accounts for purposes of deposit insurance coverage. The rules also included a separate trust accounts category for irrevocable trusts with coverage of up to $15,000 for each beneficiarys trust interests in deposit accounts established by the same grantor pursuant to a trust agreement.
Irrevocable trust accounts were insured separately from other deposit accounts of the trustee, grantor, or beneficiary, including testamentary accounts.
In 1989, Congress transferred responsibility for insuring deposits of savings associations from the Federal Savings and Loan Insurance Corporation FSLIC to the FDIC. As part of this transition, the FDIC issued uniform deposit insurance rules for the deposits of banks and savings associations, reconciling the differences between the FDIC and FSLIC insurance rules.14
These uniform rules redesignated the testamentary accounts category as revocable trust accounts, and continued to require beneficiaries for revocable trust deposits to be named, but added the requirement that these beneficiaries be named in the failed IDIs deposit account records in order for per-beneficiary coverage to apply. In the notice of proposed rulemaking discussing this change, the FDIC
explained that the change was expected to simplify the deposit insurance determination process for revocable trust deposits and expedite the payment of deposit insurance.15 These rules also redesignated the trust accounts category as irrevocable trust accounts and introduced a distinction between contingent interests and non-contingent interests in irrevocable trusts that would affect deposit insurance coverage. Noncontingent interests were each insured up to the applicable limit then $100,000, while contingent interests were aggregated and insured up to $100,000 in total.16
As revocable trusts increased in popularity during the late 1980s and early 1990s as an estate planning tool, the FDIC began receiving more inquiries about the revocable trust rules. Many of these inquiries were prompted by complex trust agreements that included numerous conditions prescribing whether, when, or how a named beneficiary would receive trust assets.
FDIC staff generally interpreted the revocable trust rules to require 14 55

FR 20111 May 15, 1990.
FR 52399, 52408 Dec. 21, 1989 notice of proposed rulemaking.
16 55 FR 20126 May 15, 1990.
15 54

E:FRFM03AUP1.SGM

03AUP1