Quiero saber acerca de...

Federal Register / Vol. 86, No. 146 / Tuesday, August 3, 2021 / Proposed Rules on the time necessary to attain compliance with part 370 if the proposed rule is adopted.
Other Potential Effects Although the FDIC expects that coverage for most trust depositors would be unchanged under the proposal, and that the proposed changes simplify the FDICs insurance rules for trust accounts, the proposal may have other potential effects. For example, the institutions affected by the proposal may rely on third-party IT service providers to perform insurance coverage estimates for their trust depositors. The proposal may lead such IT service providers to revise their systems to account for the proposals changes.

jbell on DSKJLSW7X2PROD with PROPOSALS

2. Amendments to Mortgage Servicing Account Rule The proposed rule would affect the deposit insurance coverage for certain principal and interest payments within MSA deposits maintained at IDIs by mortgage servicers. According to the March 31, 2021 Call Report data, the FDIC insures 4,987 IDIs.77 Of the 4,987
IDIs, 1,167 IDIs 23.4 percent report holding mortgage servicing assets, which indicates that they service mortgage loans and could thus be affected by the proposed rule. In addition, mortgage servicing accounts may be maintained at IDIs that do not themselves service mortgage loans. The FDIC does not know how many IDIs are recipients of mortgage servicing account deposits, but believes that most IDIs are not. Therefore, the FDIC estimates that the number of IDIs potentially affected by the proposed rule, if adopted, would be greater than 1,167 and substantially less than 4,987.
The FDIC does not have detailed data on MSAs that would allow the FDIC to reliably estimate the number of MSAs maintained at IDIs that would be affected by the proposed rule, or any potential change in the total amount of insured deposits. Thus, the potential effects of the proposed amendments regarding governing deposit insurance coverage for MSAs are outlined qualitatively below.
The proposed rule would directly affect the level of deposit insurance coverage provided for some MSAs.
Under the proposed rule, the composition of an MSA attributable to mortgage servicers advances of principal and interest funds on behalf of delinquent borrowers and collections such as foreclosure proceeds would be 77 The count of institutions includes FDICinsured U.S. branches of institutions headquartered in foreign countries.

VerDate Sep<11>2014

16:59 Aug 02, 2021

Jkt 253001

insured up to the SMDIA per mortgagor, consistent with the coverage for payments of principal and interest collected directly from borrowers.
Under the current rules, principal and interest funds advanced by a servicer to cover delinquencies, and foreclosure proceeds collected by servicers, are not be insured under the rules for MSA
deposits, but instead are insured to the servicer as corporate funds up to the SMDIA. Therefore, the proposed rule would expand deposit insurance coverage in instances where an account maintained by a mortgage servicer contains principal and interest funds advanced by the servicer in order to satisfy the obligations of delinquent borrowers to the lender, or foreclosure proceeds collected by the servicers; and where the funds in such instances exceed the mortgage servicers SMDIA.
If enacted, the proposed rule is likely to benefit a servicer compelled by the terms of a pooling and servicing agreement to advance principal and interest funds to note holders when a borrower is delinquent, and therefore the servicer has not received such funds from the borrower. In the event that the IDI hosting the MSA for the servicer fails, the proposal reduces the likelihood that the funds advanced by the servicer are uninsured, and thereby facilitates access to, and helps avoids losses of, those funds. As previously discussed, the FDIC does not have detailed data on MSAs held at IDIs, pooling and servicing agreements for outstanding mortgage loans, or servicer payments into MSAs that would allow the FDIC to reliably estimate the number of, and volume of funds within, MSAs maintained at IDIs that would be affected by the proposed rule.
Further, the proposed rule is likely to benefit an IDI who is hosting an MSA
for a servicer that is compelled by the terms of a pooling and servicing agreement to advance principal and interest funds to note holders on behalf of delinquent borrowers by increasing the volume of insured funds. In the event that the IDI enters into a troubled condition, the proposed rule could marginally increase the stability of MSA
deposits from such servicers, thereby increasing the general stability of funding.
Finally, the FDIC believes that the proposed rule, if enacted, would pose general benefits to parties that provide or utilize financial services related to mortgage products by amending an inconsistency in the deposit insurance treatment for principal and interest payments made by the borrower and such payments made by the servicer on behalf of the borrower.

PO 00000

Frm 00023

Fmt 4702

Sfmt 4702

41781

Effects on Part 370 Covered Institutions Institutions subject to the enhanced requirements of part 370 may bear some costs in recognizing the expanded coverage for servicer advances and foreclosure proceeds. However, institutions subject to the requirements of part 370 already are responsible for determining coverage for MSA accounts based on each borrowers payments.
Therefore, the FDIC does not believe the impact of the proposal on part 370
covered IDIs will be significant.
B. Regulatory Flexibility Act The Regulatory Flexibility Act RFA, requires that, in connection with a notice of proposed rulemaking, an agency prepare and make available for public comment an initial regulatory flexibility analysis that describes the impact of the proposed rule on small entities.78 However, a regulatory flexibility analysis is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities and publishes its certification and a short explanatory statement in the Federal Register together with the rule.
The Small Business Administration SBA has defined small entities to include banking organizations with total assets of less than or equal to $600
million.79 Generally, the FDIC considers a significant effect to be a quantified effect in excess of 5 percent of total annual salaries and benefits per institution, or 2.5 percent of total noninterest expenses. The FDIC believes that effects in excess of these thresholds typically represent significant effects for small entities. The FDIC does not believe that the proposed rule, if adopted, will have a significant economic effect on a substantial number of small entities. However, some expected effects of the proposed rule are difficult to assess or accurately quantify given current information, therefore the FDIC has included an Initial Regulatory Flexibility Act Analysis in this section.
78 5

U.S.C. 601 et seq.
SBA defines a small banking organization as having $600 million or less in assets, where a financial institutions assets are determined by averaging the assets reported on its four quarterly financial statements for the preceding year. See 13
CFR 121.201 as amended by 84 FR 34261, effective August 19, 2019. SBA counts the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates. See 13 CFR 121.103. Following these regulations, the FDIC uses a covered entitys affiliated and acquired assets, averaged over the preceding four quarters, to determine whether the FDIC-supervised institution is small for the purposes of RFA.
79 The
E:FRFM03AUP1.SGM

03AUP1