[Federal Register Volume 70, Number 238 (Tuesday, December 13, 2005)]
[Proposed Rules]
[Pages 73652-73663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23986]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Chapter III

RIN 3064-AC98


Large-Bank Deposit Insurance Determination Modernization Proposal

AGENCY: Federal Deposit Insurance Corporation (``FDIC'').

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: In view of the significant industry consolidation in recent 
years, the FDIC is exploring new methods to modernize its deposit 
insurance determination process, whereby the insurance status of each 
depositor is determined in the event of failure. Procedures currently 
used by the FDIC to determine deposit insurance coverage may result in 
unacceptable delays if used for an FDIC-insured institution with a 
large number of deposit accounts. In developing a new system to 
determine insurance coverage, the FDIC's goals are to minimize 
disruption to depositors and communities, and maximize recoveries for 
the deposit insurance fund in the event one of the largest insured 
institutions should fail. The FDIC is seeking comment on the best means 
to accomplish these objectives, and is offering three possible options 
for comment. The focus of this Advance Notice of Proposed Rulemaking 
(``ANPR'') is on FDIC-insured institutions with the largest number of 
deposit accounts, currently expected to include only the 145

[[Page 73653]]

insured institutions with total number of deposit accounts over 250,000 
and total domestic deposits of at least $2 billion (``Covered 
institutions''). None of these options require that insured 
institutions transmit deposit data to the FDIC unless the institution 
is in danger of failing.

DATES: Comments must be submitted on or before March 13, 2006.

ADDRESSES: You may submit comments by any of the following methods:
     Agency Web site: http://www.FDIC.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments.
     E-mail: [email protected].
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivered/Courier: The guard station at the rear of 
the 550 17th Street Building (located on F Street), on business days 
between 7 a.m. and 5 p.m.
     Public Inspection: Comments may be inspected and 
photocopied in the FDIC Public Information Center, Room 100, 801 17th 
Street, NW., Washington, DC, between 9 a.m. and 4:30 p.m. on business 
days.
     Internet Posting: Comments received will be posted without 
change to http://www.FDIC.gov/regulations/laws/federal/propose.html, 
including any personal information provided.

FOR FURTHER INFORMATION CONTACT: James Marino, Project Manager, 
Division of Resolutions and Receiverships, (202) 898-7151 or 
[email protected] or Christopher Hencke, Counsel, Legal Division, (202) 
898-8839 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    The FDIC seeks comment on the best way to improve the deposit 
insurance determination process. Three options are presented for 
comment.
     Option 1 would require Covered institutions to have 
installed on their computer systems a routine that, in the event of 
failure, would automatically place a temporary hold on a portion of the 
balances in large deposit accounts. The percentage hold amount would be 
determined by the FDIC at the time of failure, depending mainly on 
estimated losses to uninsured depositors. These holds would be placed 
immediately prior to the institution reopening for business as a bridge 
bank, generally expected to be the next business day. The institution 
also would need to be able to automatically remove these holds and 
debit the account, if necessary, depending on the results of the FDIC's 
insurance determination. The insurance determination would be 
facilitated by the institution providing the FDIC, in the event of 
failure, with depositor data (name, address, tax identification number, 
etc.) in a standard format, including a unique identifier for each 
depositor and the insurance category of each account.
     Option 2 is similar to Option 1, except the standard data 
set would include only information the institution currently possesses. 
This option would not require a unique identity for each depositor or 
that the institution supply the insurance category for each account.
     Option 3 would require that, in addition to Option 1 or 
Option 2, the largest 10 or 20 Covered institutions (in terms of the 
number of deposit accounts) know the insurance status of their 
depositors at any given point in time and have the capability to 
automate the placement of hard holds and debit uninsured funds as 
specified by the FDIC upon failure.
    The FDIC is interested in improving its ability to make insurance 
determinations in the insured institutions with the largest number of 
deposit accounts, which currently would include insured institutions 
with over 250,000 deposit accounts and total domestic deposits over $2 
billion. As of June 30, 2005 that would include 145 institutions.
    Historically the FDIC has taken responsibility for making an 
insurance determination at the time of failure based on the failed 
institution's records. A precise deposit insurance determination 
requires a specialty system to analyze depositor data and apply the 
insurance rules. Under current law an insured depository institution is 
not required to calculate by depositor the amount of funds exceeding 
the $100,000 insurance limit (by depositor and insurance category).
    As part of its normal practice, the FDIC obtains depositor data 
only at the time an insured institution is in danger of failing. These 
data are received in the weeks or months prior to failure, and are 
obtained for the sole purpose of determining the insurance status of 
individual depositors and estimating the total amount of insured funds 
in the institution. The receipt of such depositor data is necessary for 
the FDIC to carry out its insurance function. The options provided in 
this ANPR do not alter the FDIC policy regarding the receipt of 
depositor information in preparation for the resolution of a failing 
insured institution. The FDIC is aware of the potential privacy issues 
surrounding the holding of depositor information and has in place 
strict safeguards to protect these data.
    The FDIC operates under a mandate when handling a failing 
institution to structure the least costly of all possible resolution 
transactions,\1\ except in the event of systemic risk \2\ and even in 
those cases the FDIC must conserve costs. Since the introduction of the 
systemic risk exception in 1991 no exceptions to the least-cost 
requirement have been granted. The FDIC's least-cost requirement was 
intended to reduce resolution cost and instill a greater degree of 
market discipline by requiring that losses be borne by uninsured 
depositors and non-deposit creditors. The FDIC's claims process clearly 
plays a central role in this area.
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    \1\ Section 13(c)(4)(A)(ii) of the Federal Deposit Insurance Act 
(``FDI Act''), 12 U.S.C. 1823(c)(4)(A)(ii).
    \2\ Section 13(c)(4)(G)(i) of the FDI Act, 12 U.S.C. 
1823(c)(4)(G)(i).
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    When an insured institution fails the FDIC may pay insured 
depositors up to the insurance limit (a ``pay-off'') or the FDIC may 
sell the failed institution to another FDIC-insured institution (a 
``purchase and assumption transaction''). Another option is to 
establish a bridge bank \3\ or a conservatorship and transfer deposits 
to that institution. Preservation of the deposit franchise of a failed 
institution is an important facet of minimizing resolution costs. As a 
consequence, the FDIC is most likely to use a bridge bank structure in 
the resolution of a Covered institution, although a pay-off or a 
purchase and assumption transaction remain possibilities. Establishing 
a bridge bank should contribute greatly to customer retention and 
minimize potential operational difficulties, which will enhance the 
sales premium when the bridge bank is privatized as part of the final 
resolution transaction.\4\
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    \3\ A bridge bank is a national bank chartered for the purpose 
of temporarily carrying on the banking operations of a failed 
institution until a permanent solution can be crafted. See 12 U.S.C. 
1821(n). The FDIC's bridge bank authority applies only to the 
failure of a bank. In the event of the failure of an insured savings 
association the FDIC could seek a federal thrift charter that would 
be operated as a conservatorship. As with a bridge bank, the new 
thrift institution would be a temporary mechanism to facilitate a 
permanent resolution structure.
    \4\ Bovenzi, John F., ``An FDIC Approach to Resolving a Large 
Bank,'' Financial Market Behavior and Appropriate Regulation Over 
the Business Cycle, Chicago: Federal Reserve Bank of Chicago, May 
2002, pages 56-61.
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    The FDIC also has a legal mandate to pay insured deposits ``as soon 
as possible'' \5\ after an institution's closure. Although the FDIC has 
no statutory requirement to provide access to insured deposits within a 
specified time

[[Page 73654]]

after failure it places a high priority on providing access to deposits 
promptly to:
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    \5\ Section 11(f)(1) of the FDI Act, 12 U.S.C. 1821(f)(1).
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     Maintain public confidence in the banking industry and the 
FDIC.
     Provide the best possible service to insured depositors by 
minimizing uncertainty about their status and avoiding costly 
disruptions such as returned checks and a limit on their ability to 
meet financial obligations.
     Mitigate the spillover effects of a failure, which may 
include risks to the payments system, problems stemming from depositor 
illiquidity and a substantial reduction in credit availability. For 
large failures the potential spillover effects can be magnified, 
underscoring the importance of a rapid resolution. Effectively 
addressing spillover effects minimizes the likelihood of systemic risk.
     Retain, where feasible, the franchise value of the failed 
institution (and thus minimize the FDIC's resolution costs).
    Historically, most insured institution closures have occurred on a 
Thursday or Friday. In recent years, the FDIC has made funds available 
to the majority of depositors by the next business day, usually the 
Monday following a Friday closing.
    All of the insured institution failures of the past 10 years have 
been of modest size, the largest being Superior Bank, FSB with total 
deposits at the time of closure of about $2 billion and roughly 90,000 
deposit accounts. This failure pattern does not overshadow the FDIC's 
mandate to handle the failure of an insured institution of any size. 
Continued industry consolidation has caused the FDIC to reexamine its 
approach to conducting a deposit insurance determination, including the 
adoption of new technologies and business processes that could greatly 
increase the efficiency and timeliness of resolving a failed 
institution and getting depositors access to their funds.
    Industry consolidation raises practical concerns about the FDIC's 
current business model for conducting a deposit insurance 
determination. Larger institutions--especially those initiating recent 
merger activity--are considerably more complex, have more deposit 
accounts, greater geographic dispersion, more diversity of systems and 
data consistency issues arising from mergers than has been the case 
historically. Implications of industry consolidation over the past 10 
years can be seen in the following table. Should such trends continue, 
deposits will become even more concentrated in the foreseeable future.

      Table 1.--Top Ten Institutions, by Number of Deposit Accounts
                              [In millions]
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               Rank                    1995         2000         2005
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1................................         11.0         36.4         47.8
2................................          6.5         10.9         29.1
3................................          3.8          9.0         22.7
4................................          3.6          7.9         17.4
5................................          3.5          7.8         16.3
6................................          3.3          7.2         10.3
7................................          3.3          6.5          9.0
8................................          3.2          5.5          8.7
9................................          3.1          5.1          6.1
10...............................          3.0          5.0          5.0
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    Total........................         44.3        101.3       172.5
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Source: FDIC.

    This ANPR discusses regulatory options for a new business model for 
insurance determinations where Covered institutions would be required 
to facilitate the calculation of the insurance coverage of deposit 
accounts. Prior to developing the options discussed below and as part 
of its ongoing work to improve the efficiency of the claims process, 
the FDIC held meetings with senior examiners from the FDIC and other 
Federal banking agencies. Further, the FDIC solicited advice and 
opinions from the staff of four large insured depository institutions 
and a deposit servicer of large institutions.
    After the basic options discussed in this ANPR were developed the 
FDIC held meetings with four large providers of deposit software or 
servicing to Covered institutions. During these meetings FDIC staff 
presented the options along with substantial background on its 
insurance determination process and the objectives of the current 
claims modernization process. The deposit software vendors/servicers 
were asked to consider the feasibility of the options, including 
potential costs. Each vendor expressed a strong preference among these 
options for Option 2 (described in more detail below). The FDIC's 
impression from these meetings was that Option 2 could be incorporated 
into the vendor's deposit systems. Based on discussions with these 
vendors, staff of the FDIC believes the costs for Option 2 likely would 
be fairly modest.
    These vendor visits were followed by meetings with the other 
Federal banking agencies: The Board of Governors of the Federal 
Reserve, the Office of the Comptroller of the Currency and the Office 
of Thrift Supervision. Visits also were made to several banking trade 
organizations to discuss the options and solicit feedback. Lastly, the 
options were presented for comment to the four large insured depository 
institutions visited earlier in the process.
    The options outlined here cannot be implemented without some 
regulatory and financial burden. The FDIC is seeking to minimize these 
costs while at the same time ensuring that it can effectively carry out 
its mandates to make insured funds available quickly to depositors and 
provide a least-cost resolution for Covered institutions. The FDIC 
would like comment on the potential industry costs and feasibility of 
implementing the options (described below in more detail). The FDIC 
also is interested in comments on whether there are other ways to 
accomplish its goals that might be more effective or less costly or 
burdensome. In other words, what approach or combination of approaches 
(which may include new alternatives) most effectively meets this cost/
benefit tradeoff?
    Implementation of these or similar options will require that the 
FDIC amend its regulations. If changes in the regulations are proposed, 
the FDIC will publish a Notice of Proposed

[[Page 73655]]

Rulemaking and afford the opportunity for additional public comment 
before any final decision is made.

II. Background

FDIC Insurance Coverage

    The basic insurance limit is $100,000 per depositor, per insured 
institution. Depositors eligible to receive insurance coverage include 
natural persons, legal entities such as corporations, partnerships and 
unincorporated associations, and public units. Insurance coverage is 
based on the concept of ownership rights and capacities. Deposits 
maintained by a person or entity in different ownership rights and 
capacities at one institution are separately insured up to the 
insurance limit. Deposits maintained in the same ownership rights and 
capacities are added together to determine the insurance coverage. The 
FDIC's rules and regulations for deposit insurance coverage describe 
the categories of ownership rights and capacities eligible for separate 
insurance coverage. FDIC refers to these as ``ownership categories'' 
(see Appendix A for a description of the primary ownership 
categories).\6\
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    \6\ See also Financial Institution Employee's Guide to Deposit 
Insurance, Federal Deposit Insurance Corporation, 2004. This 
publication as well as additional information on insurance coverage 
is available at http://www.fdic.gov/deposit/deposits/index.html.
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    All types of deposits (for example, checking accounts, savings 
accounts, certificates of deposit, interest checks and cashier's checks 
\7\) that a depositor has at an institution in the same ownership 
category are added together before the FDIC applies the insurance limit 
for that category. A depositor cannot increase insurance coverage by 
dividing funds into different accounts in the same ownership category 
at the same institution. Similarly, in the case of joint accounts, 
using different co-owner Social Security numbers on different accounts 
does not increase insurance coverage. In a deposit insurance 
determination, the FDIC relies upon the deposit account records of the 
failed institution to determine the ownership of an account and thus 
the amount of insurance coverage available.
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    \7\ Cashiers' checks, money orders, officers' checks, interest 
checks, loan checks or expense checks constitute official items. 
Official items are included in the deposit insurance determination 
only if they are drawn on the failed bank.
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Current Deposit Insurance Determination Process

    Background. The deposit insurance determination process has several 
steps. Each step varies in time and complexity, depending on the 
institution's characteristics (primarily the number of deposit accounts 
and deposit systems).
    Closing out the day's business. Generally, on the day of an 
institution's failure, all of the day's check processing and deposit 
transactions are completed (not including the overdraft decision-making 
process that occurs the following morning). The length of this process 
can vary across institutions. For larger institutions this process can 
run into the early morning hours possibly ending at 4 a.m. or later.
    Obtain deposit data. A data file is obtained from the institution 
or its servicer. Obtaining usable requisite data from the institution 
or its servicer frequently is a time-consuming process. The FDIC will 
provide the institution or its servicer with a standard data request. 
The standard data request requires the institution to provide 
approximately 45 data fields for each deposit account along with 
electronic copies of trial balances and deposit application 
reconciliations. FDIC technical staff works with the insured 
institution until the standard data set requirements are met and the 
files transmitted to the FDIC can be processed properly.
    Generally, the FDIC has at least 30 days advance warning to plan 
and prepare for failures. Data are requested in advance to ensure 
delivery capabilities, prove the balancing and reconciliation processes 
and make certain all required fields have been included. In instances 
in the past, where a large depository institution experienced financial 
difficulties, liquidity pressures forced the closing of the institution 
before it became capital insolvent. As a consequence, the FDIC is 
concerned that lengthy advanced warning and early access may not be 
possible or practical for a Covered institution that becomes 
financially troubled. More limited access combined with complexities 
inherent in large-institution deposit systems--including multiple 
deposit systems and significant data volumes--could materially delay 
the process of obtaining data necessary to conduct a deposit insurance 
determination.
    Process deposit data. Data are received and validated (including 
reconciliation to the actual trial balance). Using its Receivership 
Liability System (``RLS'') the FDIC determines which accounts are fully 
insured, which are definitely uninsured and which are possibly 
uninsured (pending the collection of further information). The RLS 
automatically groups accounts based on the estimated ownership category 
and the name(s), address, and tax identification number for each 
account. This process is part of the insurance determination performed 
on the depositor data received from a failed institution.
    FDIC holds/debits based on insurance determination results. 
Accounts definitely uninsured are debited for the uninsured amount. 
Holds are placed on accounts that are deemed potentially uninsured for 
amounts over the insurance limit and the account owner is contacted. If 
additional information is required from the depositor, a meeting is 
scheduled. These meetings afford the opportunity to collect information 
necessary to finalize the insurance determination on the possibly 
uninsured depositors.
    The typical institution resolved by the FDIC does not have the 
capability to post a large volume of holds electronically by batch. In 
these cases holds are placed manually usually through the on-line 
system. In two failures in the recent past the FDIC has had the ability 
to work with programmers prior to the closing to create an automated 
method. This required a significant amount of time and availability of 
staff prior to the failure. Automatically processing a large number of 
holds at closing without pre-failure preparations and testing may 
result in significant operational difficulties during and after opening 
the new institution for business. In one instance the FDIC discovered 
after the fact that the programmed holds could not be removed by 
tellers under the direction of FDIC staff. These holds could only be 
removed by another program that ran in batch mode. This caused a delay 
in releasing funds to insured customers.

FDIC System Upgrades

    As part of its claims process review, the FDIC will streamline the 
business processes it uses to facilitate a deposit insurance 
determination. This will involve developing a new deposit insurance 
claims processing system incorporating more advanced technologies to 
enhance automation. These changes will improve the FDIC's ability to 
process efficiently a large number of accounts and provide timely 
customer support to uninsured depositors. In the case of a Covered 
institution that is in danger of failing, enhancements to the FDIC's 
claims system would be complemented by the options proposed in this 
ANPR. In particular, the FDIC is focusing on the collection and 
validation of deposit data and the capability of automatically debiting 
or placing holds on uninsured or potentially uninsured accounts.

[[Page 73656]]

The Banking Landscape From the Claims Perspective

    Industry segmentation. Insured depository institutions can be 
divided into two general categories, depending on the unique issues 
posed during a potential resolution. The single most important facet 
determining the complexity of the claims process is the number of 
deposit accounts, although the volume of daily transactions also can be 
important. For the purpose of claims process planning the FDIC has 
divided the industry into two segments as shown in Table 2.
    This segmentation does not result in two homogenous groups. There 
are profound differences among institutions in each group. From the 
deposit claims perspective the varying characteristics of Covered and 
Excluded institutions suggest the need for different claims approaches 
and methodologies.
    Complexity: Large institutions typically have more accounts and 
more complex deposit systems. With Covered institutions the speed of 
the claims process could be greatly enhanced by the FDIC obtaining a 
timely data download and improving the capability to automatically post 
holds or debit uninsured funds.

                                        Table 2.--Industry Segmentation.
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                                                                                           Total
                                                                            Percent of    domestic    Percent of
               Segment                      Definition           Number       total       deposit       total
                                                                                         (billions)
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Covered.............................  Total number of                 145          1.6       $3,982         67.1
                                       deposit accounts over
                                       250,000 and total
                                       domestic deposits
                                       over $2 billion.
      Excluded......................  All insured                   8,735         98.4        1,950         32.9
                                       institutions not
                                       covered.
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    Total...........................  ......................        8,880        100.0        5,932       100.0
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Source: FDIC.
Note: Data are as of June 30, 2005.

    Resolution structure: The resolution of a Covered institution is 
likely to unfold differently compared to one of smaller size. These 
differences generally relate to the expected nature of the failure. In 
today's environment a critically undercapitalized institution will 
receive a supervisory letter indicating it has 90 days to improve its 
capital position, otherwise it will be closed (capital insolvency). If 
the institution's capital level is not improved during this time, a 
failure will occur, typically on a Friday. This process affords the 
FDIC substantial advance warning and the opportunity to prepare by 
obtaining deposit data up to 90 days in advance of failure and by 
having the opportunity to work with the failing institution's 
information technology staff.
    Covered institutions are more likely to fail due to liquidity 
reasons prior to becoming critically undercapitalized (liquidity 
insolvency). Most likely, this will be a less orderly event. 
Institutions more susceptible to a liquidity insolvency pose greater 
problems for the FDIC. Such institutions have a less predictable 
failure date; the failure could occur on any day of the week; and pre-
failure access to the institution may be limited because the 
institution's insolvency is difficult to anticipate.
    Covered insured depository institutions present unique challenges 
in the event of failure. For the smaller, less-complex Covered 
institutions these challenges may be only modest; for the larger, more 
complex members of the group they are more severe. The FDIC is 
concerned about both the size and complexity of the deposit operations 
of Covered institutions and the speed at which a claims process must be 
conducted to make funds available quickly to depositors and maximize 
the institution's franchise value.

III. Proposed Deposit Insurance Determination Timeline

General Process

    This ANPR presents three options for discussion. Each of these 
options would require modifications to the deposit systems of Covered 
institutions to facilitate the insurance determination process. The 
third option would require the larger Covered institutions to determine 
the insurance status of each depositor. In this case the FDIC would 
rely upon institution-generated results in the event of failure. 
Alternatively, the first two options imply a process similar to that 
currently undertaken by the FDIC, but with important distinctions. The 
general timeline of the insurance determination process under Options 1 
and 2 is outlined below.
    Step 1. The institution is closed, typically at the end of the 
business day.
    Step 2. The institution's nightly deposit cycle is completed, a 
process which may run into the early morning hours. This process posts 
the day's deposit transactions, ending with the account balance used 
for deposit insurance purposes.
    Step 3. After the nightly deposit cycle is processed and the ending 
balance obtained for each account, the insured institution's deposit 
system would post what the FDIC is calling a ``provisional hold'' on 
certain large deposit accounts. The capability to post provisional 
holds is not a current feature of deposit processing systems and would 
have to be specifically created for this purpose. The provisional hold 
is a calculated amount based on the account type and balance. Accounts 
below a certain threshold (for example, $50,000) would be exempt from a 
provisional hold. Based upon an initial analysis of potential losses 
from the failed institution, a specified percent (for example, 10 
percent) of each account above this size threshold would be subject to 
a provisional hold. The actual threshold account size and hold 
percentage would be provided by the FDIC the night the institution is 
closed, based primarily on estimated institution losses. The threshold 
size and hold percentage may vary by account type (for example, demand 
and NOW accounts, savings deposits, time deposits and IRAs). Once the 
financial institution calculates the provisional hold amounts, holds 
must be placed on each affected account. The Hold Code legend should 
read ``FDIC Provisional Hold.'' The provisional holds would remain in 
place until the insurance determination results are determined by the 
FDIC. The FDIC provisional holds would be removed en masse once 
insurance determinations have been made by the FDIC. The FDIC will 
direct the institution's Operations/IT staff to reverse all provisional 
holds. It is anticipated this will be done by using the original 
provisional holds file and

[[Page 73657]]

changing it to reverse the provisional holds. The FDIC provisional 
holds should be of a nature that they can be overridden only by IT 
personnel at the direction of the FDIC if the need arises that 
individual provisional holds must be removed prior to the en masse 
removal.
    Step 4. After the provisional holds are in place the institution 
(most likely a bridge bank) is ready to open for business. Posting of 
provisional holds must occur prior to the start of the business day 
following failure and appear on hold reports and the on-line system. 
The ``available balance'' must show the customer balance after the 
provisional hold has been posted.
    Step 5. The Covered institution also must have the capability to 
generate a standard data set of deposit account fields necessary for 
the FDIC to conduct the deposit insurance determination. Except as 
discussed below for Option 1, the standard data set would be comprised 
of information the bank already has on hand. Principal balances, 
accrued interest, and record counts captured as part of this process 
must be reconciled to the institution's actual trial balance reports or 
summary totals reports. A mechanism would need to be in place to 
transmit these data quickly to the FDIC or its designated processing 
vendor.
    Step 6. Upon receipt of the institution's standard data set the 
FDIC will process the information to determine the insurance status of 
each account. The FDIC will generate one of three possible outcomes for 
each account.
    1. Account is fully insured: remove the provisional hold. No 
further action is required.
    2. Account is definitely uninsured: remove the provisional hold and 
debit the account in the amount specified by the FDIC.
    3. Account is possibly uninsured but further information is 
required by the FDIC to make the final determination: remove the 
provisional hold and place a regular bank hold \8\ in the amount 
specified by the FDIC.\9\
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    \8\ Bank holds should have a legend stating ``FDIC Hold'' and 
are placed for an unlimited number of days.
    \9\ Certain trust accounts and accounts eligible for pass-
through coverage will require additional information to determine 
insurance status. The FDIC must obtain this information from the 
depositor. This process may take several weeks in the case of a 
relatively large Covered institution. The bank hold with the ``FDIC 
Hold'' legend will remain in place until results are obtained. The 
results of the insurance determination on these accounts will be 
passed to the institution (bridge bank or assuming institution) as 
they become available. When these accounts are processed, the 
deposit insurance determination will be complete.
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    The FDIC intends to forward insurance results to be incorporated 
into the institution's deposit systems as soon as possible, perhaps as 
quickly as the day following the receipt of the standard data set. The 
results will dictate debits and holds to be placed by batch in an 
automated fashion on deposit accounts. The processing stream would be 
as follows: FDIC will notify Operations/IT that results are available. 
This notification will trigger a process whereby all provisional holds 
are removed en masse using the original file to create the removal 
transactions. After provisional holds have been removed debit 
transactions and bank holds will be placed on accounts as determined in 
the process described above in items 1 through 3.

Provisional Holds

    The steps described above would require new features for the 
deposit systems of Covered institutions. These features are: (1) The 
creation of a standard data set reconciled to the institution's actual 
trial balance; (2) the calculation of provisional holds on the basis of 
FDIC-specified criteria and placement of provisional holds after the 
regular deposit processing is complete for the day; (3) the capability 
to remove the provisional holds en masse and (4) the ability to place 
bank holds by batch, electronically.
    Since provisional holds enhance the FDIC's ability to open a bridge 
bank quickly, it substantially increases the potential resale value of 
the institution. These holds are necessary to stop the potential 
outflow of uninsured funds subject to risk during the first business 
day(s) of the bridge bank's operations. At the same time depositors are 
provided access to the majority of their funds.
    Potential difficulties could arise from provisional holds, 
including acceleration in the number of returned items. There is a 
tradeoff between holding uninsured funds potentially subject to loss 
and quickly making funds available to depositors. The FDIC must strike 
a balance in this decision-making process. As a part of this balance, 
the FDIC could require that the percentage of the provisional hold 
differ between account type.
    Historically losses on large insured institutions have been lower 
as a percent of assets compared to the smaller, more typical failure. 
Large institutions also tend to hold more subordinated debt and other 
general creditor claims compared to smaller institutions. These facts 
suggest the possibility that the provisional hold percentage will be 
fairly modest in the failure of most Covered institutions.

IV. Options

    The FDIC has preliminarily identified three options, each of which 
is discussed below. The FDIC invites comments on these options, as well 
as other suggestions to achieve the objectives identified in this 
document. In addition, the FDIC seeks comments on several related 
issues. These options are being considered only for Covered 
institutions.
    The definition of a Covered institution is being actively 
considered. At this point the definition includes insured institutions 
with at least 250,000 deposit accounts and more than $2 billion in 
domestic deposits. These thresholds are subject to further research and 
consideration. A limited number of large insured institutions (total 
assets over $20 billion) would not fall under this definition because 
they have fewer than 250,000 deposit accounts. Inclusion of these 
institutions in the definition of ``Covered'' is being considered. 
Further, a multi-bank holding company could have at least one Covered 
institution while other members do not meet the definition. 
Consideration is being given to defining as Covered other members of a 
multi-bank holding company as long as at least one of its members meets 
the size thresholds listed above.\10\
---------------------------------------------------------------------------

    \10\ Some members of a multi-bank holding company hold only a 
limited number of deposit accounts, perhaps dictating exclusion from 
the definition of covered.
---------------------------------------------------------------------------

Option 1

    Option 1 would require each Covered institution (except those to 
which Option 3 would apply) to have in place on an ongoing basis the 
ability to:
     Identify the owner(s) of each account by using a unique 
identifier.
     Identify the deposit insurance ownership category of each 
deposit account.
     Supply to the FDIC a standard data set mapped and 
formatted to FDIC specifications and reconciled to the institution's 
actual trial balance. (See Appendix B for a preliminary list of data to 
be included in the standard data set.)
     Calculate and place provisional holds automatically 
according to the FDIC's specifications at the end of processing on any 
given business day.
     Remove provisional holds automatically according to the 
FDIC's specifications at the end of processing on any given business 
day.

[[Page 73658]]

     Add and remove automatically the FDIC-supplied holds/
debits on an as-needed basis.
    To ensure compliance the FDIC would test periodically a Covered 
institution's ability to produce the required processes.\11\ The 
testing process would focus on data quality and accuracy, the ability 
to produce quickly a standard data set meeting the FDIC's criteria, the 
ability to effectively submit data and the viability of the hold 
processes. The FDIC recognizes the sensitivity of depositor data and 
the privacy issues that may arise. The FDIC believes it is possible to 
conduct an effective testing process while on-site, without the need 
for sensitive depositor data to leave the institution's premises.
---------------------------------------------------------------------------

    \11\ Options 2 and 3 also would involve a testing process to 
determine the overall quality of the results.
---------------------------------------------------------------------------

    As each covered institution's system would be tested periodically, 
the FDIC should be able to rely upon the unique owner identifier and 
the insurance category of each account. Reliance upon these data would 
accelerate the insurance determination process. Without these data the 
FDIC would have to identify account owners and each account's insurance 
category based primarily on the name and address fields and tax 
identification numbers, as is the case with the current process.
    The FDIC would require certain fields from the customer information 
file (``CIF'') system such as CIF number, name, address, taxpayer 
identification number and certain fields from the deposit system such 
as account number, account name, address, and principal balance. The 
data from the CIF file and the deposit systems must be linked. These 
data elements will be used to determine account owners and to perform 
insurance determinations. It is proposed that Covered institutions have 
the data elements mapped and formatted to the FDIC specifications and 
available to run on short notice. Further, the Covered institutions 
would have available a method to reconcile the file to actual trial 
balances to ensure all deposit accounts were captured. Proof of 
reconciliation would be required.
    One of the elements of the standard data set (as set forth in 
Appendix B) is ``product type.'' In connection with this element, an 
insured depository institution must identify ``accounts owned by bank'' 
or ``bank-owned accounts.'' This term means an account that does not 
qualify as a ``deposit'' account as defined in the Federal Deposit 
Insurance Act. See 12 U.S.C. 1813(l). For example, a depository 
institution might establish an account reflecting the collection of 
loan payments from borrowers. These collected funds represent income. 
They do not represent insured ``deposits'' because the depository 
institution is not obligated to make repayment. All such ``bank-owned 
accounts'' must be identified in the standard data set.
    The volume of data to be provided in deposit/CIF files of Covered 
institutions can create time delays. In the event a Covered institution 
is viewed as in danger of failing, the institution would be required to 
quickly send or transmit data to secure FDIC sites.
    Questions. What would be the overall cost to a Covered institution 
for developing the capability to automatically post provisional holds, 
remove provisional holds and automatically process account debits and 
holds based on the insurance determination results? What would be the 
overall cost to a Covered institution for developing the capability to 
produce a formatted standard data file, link CIF files to deposit files 
and prepare balancing and reconciliation schedules? How expensive would 
it be for Covered institutions to supply a unique identifier for each 
depositor? What would be the cost of supplying the insurance category 
for each account? How reliable would be the data identifying each 
depositor and account insurance category? Would Covered institutions 
have difficulty supplying reliable data for any of the items listed in 
Appendix B, such as for bank owned accounts? If so, which ones? Are 
Covered institutions able to identify account owners (as opposed to 
trustees, managers, beneficiaries, etc.) from their files?
    The deposit systems on many Covered institutions use software 
purchased from a small group of vendors. To what extent would vendor-
based software changes help mitigate the overall implementation costs 
of this program? Could a vendor develop the standard data set and 
program to pull the data into the specified format for multiple 
institutions or does each institution have unique details that would 
prevent this from occurring?
    Some Covered institutions may use a servicer to process deposit 
accounts, and some Covered institutions may share the same deposit 
servicer. To what extent would implementation changes made by the 
servicer mitigate the costs of this program?
    To meet the proposed standard data set requirement, institutions 
may have to link records from the CIF and the deposit systems or 
provide the key or linking elements so data from the CIF can be linked 
to individual account owners. This would be more complex than a 
standard data set that only included items from the deposit systems, 
but it would yield substantial benefits to the FDIC. Once the systems 
had been developed and tested, how much longer would it take for an 
institution to prepare a standard data set that included CIF and 
deposit system items, compared to one that included only deposit system 
items?
    The FDIC would require transmitted deposit balances to reconcile to 
the actual trial balance, both balance dollar amounts and the record 
count. How does reconciliation affect timeliness? Can the process be 
developed in advance and automated?
    What is the most effective way of transmitting data to the FDIC?

Option 2

    Option 2 would require each Covered institution to have in place on 
an ongoing basis the ability to:
     Supply to the FDIC a standard data set mapped and 
formatted to FDIC specifications and reconciled to the institution's 
actual trial balance. (See Appendix B for a preliminary list of data to 
be included in the standard data set.)
     Calculate and place provisional holds automatically 
according to the FDIC's specifications at the end of processing on any 
given business day.
     Remove provisional holds automatically according to the 
FDIC's specifications at the end of processing on any given business 
day.
     Add and remove automatically the FDIC-supplied holds/
debits on an as-needed basis.
    The primary difference between Options 1 and 2 rests with the 
omission in Option 2 of the requirements to supply a unique identifier 
for each depositor and identify the insurance category of each deposit 
account. The data elements included in the standard data set also may 
vary somewhat from those in Appendix B.
    Question: What is the likely cost of Option 2? What are the 
potential cost savings to Covered institutions from Option 2 compared 
to Option 1? Are there any likely operational difficulties in 
implementing Option 2?

Option 3

    Option 3 would require the very largest of the Covered institutions 
to know the insurance status of deposit accounts at any given point in 
time.\12\

[[Page 73659]]

Upon failure, the institution must be able to place debits/holds 
automatically for uninsured deposits in an amount specified by the 
FDIC, so that the institution can be operational the following business 
day. The FDIC is considering this option only for the largest 10 or 20 
Covered institutions while, if used, the remaining Covered institutions 
would meet requirements similar to those outlined under Options 1 or 2. 
Limiting the scope of this option to the largest Covered institutions 
would help mitigate implementation costs as well as speed the insurance 
determination process for the largest, most complex of the Covered 
institutions.
---------------------------------------------------------------------------

    \12\ This requirement would not include deposit accounts for 
which the Covered institution does not ordinarily possess the 
information to make the determination, such as accounts with pass-
through coverage (brokered deposit accounts and trust accounts, for 
example) and certain informal trust accounts (also referred to as 
either ``payable-on-death'' or ``in-trust-for'' accounts) where 
information on beneficiaries may be necessary for the determination.
---------------------------------------------------------------------------

    This option would be more expensive for Covered institutions than 
Options 1 or 2, but it could yield additional benefits. Depositors 
could benefit from the institutions' ability to provide information 
about insurance status. If an institution were to fail, this option 
provides that the insurance status of most depositors would be known at 
the point of failure. As a consequence, some depositors could receive a 
larger portion of their funds more quickly under this option compared 
to the provisional hold process contemplated in Options 1 and 2.
    As with Options 1 and 2, the FDIC would test the accuracy of 
systems put in place if this Option is adopted. Under these 
circumstances the FDIC should be able to rely upon the results 
generated by the insured institution for the initial deposit insurance 
determination.
    Questions. How expensive would this option be compared to Options 1 
or 2? Do the additional benefits merit the additional cost? Are there 
other reasons why this approach should be preferred or rejected? How 
extensive would the FDIC audit have to be to determine whether 
institutions are correctly calculating insurance coverage?

Other Potential Options

    The FDIC invites comments on all aspects of this proposal. In 
addition, the FDIC solicits suggestions on alternative means of meeting 
the objective of conducting a timely insurance determination on Covered 
insured institutions.
    Question. Is there a different approach that would accomplish the 
same objective at a lower financial and regulatory cost?

         Appendix A.--Primary FDIC Deposit Insurance Categories
------------------------------------------------------------------------
      Insurance category                      Description
------------------------------------------------------------------------
1. Single Ownership..........  Funds owned by a natural person including
                                those held by an agent or custodian,
                                sole proprietorship accounts and
                                accounts that fail to qualify in any
                                other category below. Coverage extends
                                to $100,000 per depositor.
2. Joint Ownership...........  Accounts jointly owned as joint tenants
                                with the right of survivorship, as
                                tenants in common or as tenants by the
                                entirety. Coverage extends to $100,000
                                per co-owner.
                                The account title generally must
                                be in the form of a joint account
                                (``Jane Smith & John Smith'').
                                Each of the co-owners must sign
                                the account signature card. (This
                                requirement has exceptions, including
                                certificates of deposit.)
                                The withdrawal rights of the co-
                                owners must be equal.
3. Revocable Trust...........  Accounts whereby the owner evidences an
                                intention that upon his or her death the
                                funds shall belong to one or more
                                qualifying beneficiaries. For each
                                owner, coverage extends to $100,000 per
                                beneficiary.
                                The title of the account must
                                include ``POD'' (payable-on-death) or
                                ``trust'' or some similar term.
                                The beneficiaries must be
                                specifically named in the account
                                records. (This requirement applies to
                                informal ``POD'' accounts but does not
                                apply to formal ``living trust''
                                accounts.)
                                The beneficiaries must be the
                                owner's spouse, children, grandchildren,
                                parents or siblings.
4. Irrevocable Trust.........  Accounts established pursuant to an
                                irrevocable trust agreement. Coverage
                                extends to $100,000 per beneficiary.
                                The account records must
                                indicate that the funds are held by the
                                trustee pursuant to a fiduciary
                                relationship.
                                The account must be supported by
                                a valid irrevocable trust agreement.
                                Under the trust agreement, the
                                grantor of the trust must retain no
                                interest in the trust funds.
                                For ``per beneficiary''
                                coverage, the interest of the
                                beneficiary must be ``non-contingent.''
5. Self-Directed Retirement..  Individual retirement accounts under 26
                                U.S.C. Sec.   Retirement 408(a),
                                eligible deferred compensation plans
                                under 26 U.S.C. Sec.   457, self-
                                directed individual account plans under
                                29 U.S.C. Sec.   1002 and self-directed
                                Keogh plans under 26 U.S.C. Sec.
                                401(d). Coverage extends to $100,000 per
                                owner or participant.
                                The account records must
                                indicate that the account is a
                                retirement account.
                                The account must be an actual
                                retirement account under the cited
                                sections of the Tax Code.
6. Corporation, Partnership    Accounts of a corporation, partnership or
 or Unincorporated              unincorporated association. Coverage
 Association.                   extends to Unincorporated $100,000 per
                                entity.
                                The account records must
                                indicate that the entity is the owner of
                                the funds or that the nominal
                                accountholder is merely an agent or
                                custodian (with the entity's ownership
                                interest reflected by the custodian's
                                records).
                                The entity must be engaged in an
                                ``independent activity.''
                                The entity must not be a sole
                                proprietorship (which is treated as a
                                single ownership account).
7. Employee Benefit Plan.....  Deposits of an employee benefit plan as
                                defined at 29 U.S.C. 1002, including any
                                plan described at 26 U.S.C. 401(d), and
                                also deposits of an eligible deferred
                                compensation plan described at 26 U.S.C.
                                457. Coverage extends to $100,000 per
                                participant.
                                The account records must
                                indicate that the funds are held by the
                                plan administrator pursuant to a
                                fiduciary relationship.
                                The account must be supported by
                                a valid employee benefit plan agreement.
                                For ``per participant''
                                coverage:
                               [cir] The interests of the participants
                                must be ascertainable and non-
                                contingent.
                               [cir] The institution must have been well
                                capitalized (or adequately capitalized
                                in some cases) when the initial and
                                subsequent deposits were made.

[[Page 73660]]

 
8. Public Unit...............  Funds of ``public units'' or ``political
                                subdivisions'' thereof. Coverage extends
                                to $100,000 for interest bearing
                                deposits and $100,000 for non interest
                                bearing deposits for each official
                                custodian of the public unit or
                                subdivision.
                                For separate coverage for the
                                non interest bearing deposits, the
                                insured financial institution must be
                                located (including branch locations) in
                                the same state as the public unit.
                                The account records must
                                indicate that the funds are held by the
                                custodian in a custodial capacity.
                                For ``per custodian'' coverage,
                                the custodian must be a separate
                                ``official custodian.''
                                For ``per subdivision''
                                coverage, the governmental entity must
                                be a separate ``political subdivision.''
------------------------------------------------------------------------

Appendix B. Data Elements Included in the Standard Data Set

    This appendix presents a standard data request containing proposed 
data fields to be used by the FDIC to determine the insured status of 
each account. The proposed file is divided into four record types: 
Header, Deposit, Hold, and Customer. It would be preferred that all 
data are included in one file but, if necessary due to system 
constraints, multiple files might be used. For identification purposes 
the Header record in each file must be created. If data or information 
are not maintained or do not apply, a null value in the appropriate 
field should be indicated.
    The following is a list of the data fields proposed to be included 
in the file with explanations of the data being requested. The fields 
are listed in the order they would appear in the file.

Header Record

    The Header Record provides information specific to the institution, 
the effective date of the data and the date and time the file was 
created. The Header Record must be at the beginning of each file if 
multiple files are submitted.

------------------------------------------------------------------------
          Field name                     FDIC field description
------------------------------------------------------------------------
1. HD--Record--ID............  Record ID Enter ``1'' in this field.
1. HD--Acct--Numb............  Header Account Number Enter
                                ``0000000000000000'' in this field.
1. HD--File--Date............  File Date--This field identifies the ``as-
                                of-date'' of the file. Enter the
                                effective date of the data being
                                supplied in this request. Must be
                                entered in MMDDYYYY format.
1. HD--FI--Name..............  Financial Institution Name--Enter the
                                institution's name as it appears on the
                                FDIC Certificate.
1. HD--FI--Number............  Financial Institution Number--Enter the
                                institution's FDIC certificate/
                                institution number.
1. HD--Dt--Created...........  Date & Time Created--Enter the date and
                                time in MMDDYYYYHHmmSS format.
------------------------------------------------------------------------

Deposit Record

    The Deposit Record provides information specific to deposit account 
balances and account data. Fields 14-27 relate to the account name and 
address information. Some systems provide for separate fields for 
account title/name, address, city, state, ZIP, and country, all of 
which are parsed out. Other systems may simply provide multiple lines 
for name, address, city, state, ZIP, with no distinction. Populate 
fields that best fit system data--either fields 14-21 or fields 22-27.

------------------------------------------------------------------------
          Field name                     FDIC field description
------------------------------------------------------------------------
0. DP--Record--ID............  Record ID--Enter ``2'' in this field.
0. DP--Acct--Numb............  Account Number--The unique number
                                assigned by the institution to this
                                account.
0. DP--Acct-- Numb--ID.......  Account Number ID--Account number field
                                that further identifies the account. May
                                be used to identify separate deposits
                                tied to this account where there are
                                different processing parameters, i.e.
                                interest rates, maturity dates, but all
                                owners are the same.
0. DP--Tax--ID...............  Tax ID--Provide the tax ID number
                                maintained on the account. For consumer
                                accounts, typically, this would be the
                                primary account holder's Social Security
                                number. For business accounts it would
                                be the Federal tax identification
                                number.
0. DP--Tax-- Code............  Tax ID Code--This field should identify
                                the type of the tax ID number. Valid
                                values are:
                                S = Social Security number.
                                T = Federal tax identification
                                number.
                                O = Other.
0. DP--Branch................  Branch--This field should identify the
                                branch associated with the account. It
                                may be where the account was originally
                                opened.
0. DP--Cost --Center.........  Cost Center--Identifier used for
                                organization reporting or ownership of
                                the account. It may be the same as the
                                Branch number.
0. DP--Owner --Ind...........  Customer Owner Indicator--This field is
                                used to identify the type of ownership.
                                This information will assist the FDIC to
                                further categorize the account into the
                                FDIC insurance categories. Valid values
                                are:
                                S = Single or primary owner
                                J = Joint or secondary owner
                                (also include DBA's in this code)
                                T = Trust account
                                P = Partnership account
                                C = Corporation.
                                B = Brokered deposits
                                O = Other

[[Page 73661]]

 
0. DP--Prod --Type...........  Product Type--This field is used to
                                identify the type of the product from a
                                customer perspective. This information
                                will assist the FDIC to properly
                                categorize the account into the FDIC
                                insurance categories. Valid values in
                                the field are:
                                CON = Personal or consumer
                                accounts.
                                BUS = Business.
                                NPR = Non-profit accounts.
                                GOV = Accounts held by
                                government entities (city, state,
                                political subdivisions).
                                FIN = Accounts held by other
                                financial institutions.
                                INT = Internal accounts or bank-
                                owned accounts.
                                OTH = Other.
0. DP--Prod--Cat.............  Product Category--This is a broad
                                classification of products and accounts.
                                Valid values in the field are:
                                DDA = Non-interest bearing
                                checking accounts.
                                NOW = Interest bearing checking
                                accounts.
                                MMA = Money market accounts.
                                SAV = Savings accounts and money
                                market savings accounts. This includes
                                any interest bearing accounts with
                                regulated withdrawal requirements.
                                CDS = Time deposit accounts and
                                certificate of deposit accounts. Include
                                any accounts with specified maturity
                                dates that may or may not be renewable.
                                REP = Repurchase agreements.
                                Include any accounts supported by an
                                agreement to repurchase the deposit at a
                                specified date and interest rate, and is
                                secured by designated securities owned
                                by the institution.
                                IRA = Individual retirement
                                accounts.
                                OTH = Other.
0. DP--Ret --Ind.............  Retirement Indicator--This field is used
                                to identify whether the account is
                                considered any type of retirement
                                product. Valid values are:
                                Y = Yes, the account is a
                                retirement account.
                                N = No, the account is not a
                                retirement account.
0. DP--Stat--Code............  Status Code--Include only the following
                                status or condition of the account.
                                Valid values are:
                                O = Open.
                                C = Closed.
                                D = Dormant.
                                I = Inactive
0. DP--Short--Name...........  Short Name--This field will assist in
                                creating an alpha list of accounts. The
                                format preference for personal accounts
                                is last name or partial last name
                                followed by first name. For business
                                accounts enter the name of the account.
                                Variances to this should be explained in
                                a Mapping document. If a similar field
                                does not exist, create a ``Short Name''
                                by concatenating data using related
                                fields.
0.DP--Acct--Title--1.........  Account Title Line 1--Two lines (fields
                                14 & 15) are provided to enter account
                                styling or titling of the account. These
                                data will be used to identify the owners
                                of the account.
0. DP--Acct --Title--2.......  Account Title Line 2--Additional account
                                title line.
0. DP--Address-- Line--1.....  Address Line 1--Two lines (fields 16 &
                                17) are provided to enter the street, PO
                                box, suite number, etc. of the address.
0. DP--Address-- Line--1.....  Address Line 2--Additional address line.
0. DP--City..................  City--Enter the city associated with the
                                mailing address.
0. DP--State.................  State--Enter the state abbreviation
                                associated with the mailing address.
0. DP--ZIP...................  ZIP--This field allows for the ZIP+4 code
                                associated with the mailing address.
0. DP--Country...............  Country--This field should identify the
                                country associated with the mailing
                                address. Provide the name of the country
                                or the standard country code.
0. DP--NA-- Line--1..........  Name or Address Line 1--Six lines (fields
                                22-27) are provided to enter the name
                                and/or the account mailing address if
                                your system does not distinguish
                                particular address lines.
0. DP--NA-- Line--2..........  Name & Address Line 2--Additional name
                                and/or address line.
0. DP--NA--Line --3..........  Name & Address Line 3--Additional address
                                line.
0. DP--NA--Line --4..........  Name & Address Line 4--Additional address
                                line.
0. DP--NA--Line --5..........  Name & Address Line 5--Additional address
                                line.
0. DP--NA--Line --6..........  Name & Address Line 6--Additional address
                                line.
0. DP--Cur--Bal..............  Current Balance--This amount represents
                                the current balance in the account at
                                the end of business on the effective
                                date of this file. This balance should
                                not be reduced by float or holds. For
                                CDs and time deposits, it should reflect
                                the principal balance plus any interest
                                paid and available for withdrawal that
                                is not already included in the
                                principal. The total of all Current
                                Balances in this file should reconcile
                                to the total liabilities on the
                                financial institutions general ledger.
0. DP--Int--Rate.............  Interest Rate--The current interest rate
                                in effect for interest bearing accounts.
0. DP--Bas--Days.............  Basis Days--Indicates the basis on which
                                interest is to be paid. Valid values
                                are:
                                1 = 30/360.
                                2 = 30/365.
                                3 = 365/365 (actual/actual).
0. DP--Int--Type.............  Interest Type--Indicates the type of
                                interest to be paid. Valid values are:
                                S = Simple.
                                D = Daily compounding.
                                C = Continuous compounding.
                                O = Other.
0. DP--Int--Factor...........  Interest Rate Daily Factor--This field
                                should reflect the daily interest rate
                                factor for generating interest.
0. DP--Acc--Int..............  Accrued Interest--This amount should
                                reflect the amount of interest that has
                                been earned but not yet paid to the
                                account as of the date of the file.
0. DP--Lst--Int--Pd..........  Date Last Interest Paid--This should
                                indicate the date thru which interest
                                was last paid to the account. Must be
                                entered in MMDDYYYY format.

[[Page 73662]]

 
0. DP--Int-- Pd--YTD.........  Interest Paid YTD--The amount of interest
                                that has been paid to the account this
                                year. Must be entered in MMDDYYYY
                                format.
0. DP--Nxt --Mat.............  Date Next Maturity--For CD and time
                                deposit accounts, this is the next date
                                the account is to mature. For non-
                                renewing CDs that have matured and are
                                waiting to be redeemed this date may be
                                in the past. Must be entered in MMDDYYYY
                                format.
0. DP--Res --Acct--Ind.......  Reserve Account Indicator--Identifies
                                accounts with a reserve or overdraft
                                protection feature tied to this account
                                and is not identified by another account
                                number or identifier. It is not an
                                Overdraft Limit that allows the deposit
                                account to be overdrawn. Rather, it is
                                considered a ``loan'' to be advanced to
                                the account in the event of an
                                overdraft.
0. DP--Res-- Out--Bal........  Reserve Account Outstanding Balance--
                                Provide the outstanding balance of a
                                reserve or overdraft protection feature.
                                This balance is not reflected in the
                                accounts deposit current balance. This
                                is not an Overdraft Limit. Rather, in
                                the event that proceeds are advanced to
                                cover an overdraft, the balance that
                                remains outstanding to be paid back to
                                the account. This balance may include a
                                finance charge.
0. DP--Lst--Deposit..........  Date Last Deposit--This date should
                                reflect the last deposit transaction
                                posted to the account. For example, a
                                deposit that included checks and/or
                                cash. Must be entered in MMDDYYYY
                                format.
0. DP--Open--Dt..............  Account Open Date--This date should
                                reflect the date the account was opened.
                                If the account had previously been
                                closed and re-opened, this should
                                reflect the most recent re-opened date.
                                Must be entered in MMDDYYYY format.
------------------------------------------------------------------------

Hold Record

    The Hold Record provides information related to any holds on an 
account. If an account has more than one hold, additional Hold Records 
may be provided.

------------------------------------------------------------------------
          Field name                     FDIC field description
------------------------------------------------------------------------
2. HD--Record--ID............  Record ID--Enter ``3'' in this field.
2. HD--Acct--Numb............  Account Number--The account number
                                associated with the hold. This should be
                                the same as the account number in
                                Deposit Record field 2.
2. HD--Hold--Amt.............  Hold Amount--Dollar amount of the hold.
2. HD--Hold--Reason..........  Hold Reason--Reason for the hold. Valid
                                values are:
                               LN = Loan collateral hold.
                               UC = Uncollected funds hold.
                               OT = Other--bank defined.
2. HD--Hold--Desc............  Hold Description--Description of the hold
                                available on the system.
2. HD--Hold--Days............  Hold Days--The Number of days the hold
                                was/is intended. May be used instead of
                                an expiration date.
2. HD--Hold--Start--Dt.......  Hold Start Date--The date the hold was
                                initiated. Must be entered in MMDDYYYY
                                format.
8. HD--Hold--Exp--Dt.........  Hold Expiration Date--The date the hold
                                is to expire. Must be entered in
                                MMDDYYYY format. May be used instead of
                                number of hold days.
------------------------------------------------------------------------

Customer Record

    The Customer Record provides information related to each customer 
associated with an account. Therefore, multiple customer records 
associated with each deposit account number found in the Deposit Record 
should be indicated.
    Fields 8-11 relate to the customer name. Some systems provide for 
separate fields for account name: ``last name'' and ``first name'' for 
personal accounts or ``company name'' for business accounts, all of 
which are parsed out. Other systems simply provide one line for a name. 
Populate fields that best fit system data.
    Fields 12-17 relate to customer address information. Some systems 
provide for separate fields for address, city, state, ZIP, and country, 
all of which are parsed out. Other systems may simply provide multiple 
lines for name, address, city, state, ZIP, with no distinction. Fields 
14-18 are provided if your systems do not distinguish between the 
different elements associated with a name and address. Populate fields 
that best fit system data--either fields 12-17 or fields 14-18.

------------------------------------------------------------------------
          Field name                     FDIC field description
------------------------------------------------------------------------
1. CS--Record--ID............  Record ID--Enter ``4'' in this field.
2. CS--Acct--Numb............  Account Number--The deposit account
                                number. Should be the same as the
                                account number in Deposit Record field
                                2.
3. CS--Cust--Numb............  Customer Number--The number assigned to
                                the customer in the customer information
                                system.
4. CS--Tax--ID...............  Customer Tax ID Number--Provide the tax
                                ID number on record for the customer.
5. CS--Tax--Code.............  Customer Tax ID Code--This field should
                                identify the type of the tax ID number
                                of the customer. Valid values are:
                                S = Social Security number.
                                T = Federal tax identification
                                number.
                                F = Foreign accounts.
                                O = Other.

[[Page 73663]]

 
6. CS--Rel--Code.............  Relationship Code--This code indicates
                                how the customer is related to the
                                account. Valid values are:
                                P = Primary owner.
                                S = Secondary owner.
                                B = Beneficiary.
                                T = Trustee.
                                O = Other.
                                U = Unknown.
7. CS--Bene--Code............  Beneficiary Type Code--If the customer is
                                considered a beneficiary, enter the type
                                of account associated with this
                                customer. This includes beneficiaries on
                                retirement accounts, trust accounts,
                                minor accounts, and payable-on-death
                                accounts. Valid values are:
                                I = IRA.
                                T = Trust--irrevocable.
                                R = Trust--revocable.
                                M = Uniform gift to minor.
                                P = Payable on death.
                                O = Other.
8. CS--Name..................  Customer Name--The name of the customer.
                                Provide in the Mapping document the
                                typical format the bank practices for
                                business customers and personal/
                                individual customers; i.e., last name
                                first, first name last.
9. CS--Last--Name............  Customer Last Name--The last name of the
                                individual/personal customer.
10. CS--First--Name..........  Customer First Name--The first name of
                                the individual/personal customer.
11. CS--Comp--Name...........  Customer Company Name--The company name
                                of the business customer.
0. CS--Address--1............  Address Line 1--Two lines (fields 10 &
                                11) are provided to enter the street,
                                P.O. box, suite number, etc. of the
                                address.
0. CS--Address--2............  Address Line 2--Additional address field.
0. CS--City..................  City--Enter the city associated with the
                                mailing address of the customer.
0. CS--State.................  State--Enter the state abbreviation
                                associated with the mailing address of
                                the customer.
0. CS--ZIP...................  ZIP--This field allows for the ZIP+4 code
                                associated with the mailing address of
                                the customer.
0. CS--Country...............  Country--This field should identify the
                                country associated with the mailing
                                address. Provide the name of the country
                                or the standard country code.
0. CS--NA--Line--1...........  Customer Name & Address Line 1--The name
                                and/or address of the customer.
0. CS--NA--Line--2...........  Customer Name & Address Line 2--
                                Additional name and/or address line.
0. CS--NA--Line--3...........  Customer Name & Address Line 3--
                                Additional address line.
0. CS--NA--Line--4...........  Customer Name & Address Line 4--
                                Additional address line.
0. CS--NA--Line--5...........  Customer Name & Address Line 5--
                                Additional address line.
0. CS--Birth--Dt.............  Customer Birth Date--The birth date on
                                record for the customer. Must be entered
                                in MMDDYYYY format.
0. CS--Telephone Customer....  Telephone Number--The telephone number on
                                record for the customer.
0. CS--Email.................  Customer Email Address--The email address
                                on record for the customer.
------------------------------------------------------------------------

* * * * *

    Dated at Washington, DC, this 5th day of December, 2005.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 05-23986 Filed 12-12-05; 8:45 am]
BILLING CODE 6714-01-P