Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 146 / Tuesday, August 3, 2021 / Proposed Rules B. Background 1. Deposit Insurance and the FDICs Statutory and Regulatory Authority 2. Evolution of Insurance Coverage of Trust Deposits 3. Current Rules for Coverage of Trust Deposits 4. Part 370 and Recordkeeping at the Largest IDIs 5. Need for Further Rulemaking C. Description of Proposed Rule D. Examples Demonstrating Coverage Under Current and Proposed Rules E. Alternatives Considered F. Request for Comment II. Amendments to Mortgage Servicing Account Rule A. Policy Objectives B. Background and Need for Rulemaking C. Proposed Rule D. Request for Comment III. Regulatory Analysis A. Expected Effects 1. Simplification of Trust Rules 2. Amendments to Mortgage Servicing Account Rule B. Regulatory Flexibility Act 1. Simplification of Trust Rules 2. Amendments to Mortgage Servicing Account Rule C. Paperwork Reduction Act D. Riegle Community Development and Regulatory Improvement Act E. Treasury and General Government Appropriations Act, 1999Assessment of Federal Regulations and Policies on Families F. Plain Language
I. Simplification of Deposit Insurance Trust Rules
jbell on DSKJLSW7X2PROD with PROPOSALS

A. Policy Objectives The Federal Deposit Insurance Corporation FDIC is seeking comment on proposed amendments to its regulations governing deposit insurance coverage for deposits held in connection with trusts.1 The proposed amendments are intended to 1 provide depositors and bankers with a rule for trust account coverage that is easy to understand and 2 to facilitate the prompt payment of deposit insurance in accordance with the Federal Deposit Insurance Act FDI
Act, among other objectives.
Accomplishing these objectives also would further the FDICs mission in other respects, as discussed in greater detail below.
Clarifying Insurance Coverage for Trust Deposits The proposed amendments would clarify for depositors, bankers, and other interested parties the insurance rules and limits for trust accounts. The proposal both reduces the number of rules governing coverage for trust
accounts and establishes a straightforward calculation to determine coverage. The deposit insurance trust rules have evolved over time and can be difficult to apply in some circumstances. The proposed amendments are intended to alleviate some of the confusion that depositors and bankers may experience with respect to insurance coverage and limits. Under the current regulations, there are distinct and separate sets of rules applicable to deposits of revocable trusts and irrevocable trusts. Each set of rules has its own criteria for coverage and methods by which coverage is calculated. Despite the FDICs efforts to simplify the revocable trust rules in 2008,2 over the last 13 years FDIC
deposit insurance specialists have responded to approximately 20,000
complex insurance inquiries per year on average. More than 50 percent of inquiries pertain to deposit insurance coverage for trust accounts revocable or irrevocable. The consistently high volume of complex inquiries about trust accounts over an extended period of time suggests continued confusion about insurance limits. To help clarify insurance limits, the proposed amendments would further simplify insurance coverage of trust accounts revocable and irrevocable by harmonizing the coverage criteria for certain types of trust accounts and by establishing a simplified formula for calculating coverage that would apply to these deposits. The FDIC proposes using the calculation that the FDIC first adopted in 2008 for revocable trust accounts with five or fewer beneficiaries. This formula is straightforward and is already generally familiar to bankers and depositors.3
Prompt Payment of Deposit Insurance The FDI Act requires the FDIC to pay depositors as soon as possible after a bank failure. However, the insurance determination and subsequent payment for many trust deposits can be delayed when FDIC staff must review complex trust agreements and apply various rules for determining deposit insurance coverage. The proposed amendments are intended to facilitate more timely deposit insurance determinations for trust accounts by reducing the amount of time needed to review trust agreements and determine coverage.
These amendments should promote the FDICs ability to pay insurance to 2 See
73 FR 56706 Sep. 30, 2008.
2008, the FDIC adopted an insurance calculation for revocable trusts that have five or fewer beneficiaries. Under this rule, 12 CFR
330.10a, each trust grantor is insured up to $250,000 per beneficiary.
3 In
1 Trusts include informal revocable trusts commonly referred to as payable-on-death accounts, in-trust-for accounts, or Totten trusts, formal revocable trusts, and irrevocable trusts.

VerDate Sep<11>2014

16:59 Aug 02, 2021

Jkt 253001

PO 00000

Frm 00009

Fmt 4702

Sfmt 4702

41767

depositors promptly following the failure of an insured depository institution IDI, enabling depositors to meet their financial needs and obligations.
Facilitating Resolutions The proposed changes will also facilitate the resolution of failed IDIs.
The FDIC is routinely required to make deposit insurance determinations in connection with IDI failures. In many of these instances, however, deposit insurance coverage for trust deposits is based upon information that is not maintained in the failed IDIs deposit account records. As a result, FDIC staff work with depositors, trustees, and other parties to obtain trust documentation following an IDIs failure in order to complete deposit insurance determinations. The difficulties associated with completing such a determination are exacerbated by the substantial growth in the use of formal trusts in recent decades. The proposed amendments could reduce the time spent reviewing such information and provide greater flexibility to automate deposit insurance determinations, thereby reducing potential delays in the completion of deposit insurance determinations and payments. Timely payment of deposit insurance also helps to avoid reductions in the franchise value of failed IDIs, expanding resolution options and mitigating losses.
Effects on the Deposit Insurance Fund The FDIC is also mindful of the effect that the proposed changes to the deposit insurance regulations could have on deposit insurance coverage and generally on the Deposit Insurance Fund DIF, which is used to pay deposit insurance in the event of an IDIs failure. The FDIC manages the DIF
according to parameters established by Congress and continually evaluates the adequacy of the DIF to protect insured depositors. The FDICs general intent is that proposed amendments to the trust rules be neutral with respect to the DIF.
B. Background 1. Deposit Insurance and the FDICs Statutory and Regulatory Authority The FDIC is an independent agency that maintains stability and public confidence in the nations financial system by: Insuring deposits; examining and supervising IDIs for safety and soundness and compliance with consumer financial protection laws; and resolving IDIs, including large and complex financial institutions, and managing receiverships. The FDIC has helped to maintain public confidence in
E:FRFM03AUP1.SGM

03AUP1