[Federal Register Volume 75, Number 156 (Friday, August 13, 2010)]
[Rules and Regulations]
[Pages 49363-49365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-20008]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 328, 330, and 347

RIN 3064-AD61


Deposit Insurance Regulations; Permanent Increase in Standard 
Coverage Amount; Advertisement of Membership; International Banking; 
Foreign Banks

August 10, 2010.
AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: On July 21, 2010, the President signed into law the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (``Dodd-Frank'' Act). 
Section 335 of the Dodd-Frank Act made permanent the standard maximum 
deposit insurance (``SMDIA'') amount of $250,000. The FDIC is 
conforming its regulations to reflect this recent congressional action.

DATES: Effective Date: August 13, 2010.
    Mandatory Compliance Date for Revision to 12 CFR Part 328 (FDIC 
Official Sign): January 3, 2011.

FOR FURTHER INFORMATION CONTACT: Joseph A. DiNuzzo, Supervisory 
Counsel, Legal Division (202) 898-7349; Richard B. Foley, Counsel, 
Legal Division (202) 898-3784; Walter C. Siedentopf, Honors Attorney, 
Legal Division (703) 562-2744; or Martin W. Becker, Senior Consumer 
Affairs Specialist, Division of Supervision and Consumer Protection 
(202) 898-6644, Federal Deposit Insurance Corporation, Washington, DC 
20429.

SUPPLEMENTARY INFORMATION:

Overview

    In this final rule, the FDIC is making conforming changes to its 
insurance regulations (12 CFR part 330), international banking 
regulations (12 CFR part 347) and advertising regulations (12 CFR part 
328) to reflect Congress's action making permanent the increase in the 
SMDIA (from $100,000 to $250,000).

I. Background

    The Emergency Economic Stabilization Act of 2008 temporarily 
increased the SMDIA from $100,000 to $250,000, effective October 3, 
2008, through December 31, 2009.\1\ On October 17, 2008, the FDIC 
adopted an interim rule amending its deposit insurance regulations to 
reflect this temporary increase in the SMDIA.\2\ Subsequent to the 
issuance of this interim rule, on May 20, 2009, the President signed 
the Helping Families Save Their Homes Act of 2009 (``Helping Families 
Act''), which, among other provisions, extended the temporary increase 
in the SMDIA from December 31, 2009, to December 31, 2013.\3\ On 
September 17, 2009, the FDIC adopted a final rule amending its deposit 
insurance regulations to reflect this extension and to provide further 
guidance by updating its examples of deposit insurance coverage to 
incorporate the increased SMDIA.\4\ On July 21, 2010, the President 
signed the Dodd-Frank Act,\5\ which, among other provisions, made 
permanent \6\ the increase in the SMDIA from $100,000 to $250,000.\7\
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    \1\ Public Law 110-343 (Oct. 3, 2008).
    \2\ 73 FR 61658 (Oct. 17, 2008).
    \3\ Public Law 111-22 (May 20, 2009).
    \4\ 74 FR 47711 (Sept. 17, 2009).
    \5\ Public Law 111-203 (July 21, 2010).
    \6\ The SMDIA is still subject to an inflation adjustment 
pursuant to subparagraph (F) of section 11(a)(1) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(a)(1)(F)). However, this 
inflation adjustment will not affect the level of the SMDIA in the 
foreseeable future because it will not take effect until the value 
of $100,000, inflation adjusted since 2005, exceeds the current 
SMDIA.
    \7\ The effective date of the Dodd-Frank Act is July 22, 2010, 
one day after the enactment of the act.
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    As implemented by part 328 of the FDIC's regulations (12 CFR part 
328), section 18(a) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(a)) requires that insured depository institutions display an 
official FDIC sign, which informs depositors of their minimum amount of 
deposit insurance coverage and states that this insurance is backed by 
the full faith and credit of the United States Government. As a result 
of the Helping Families Act's extension of the temporary increase in 
the SMDIA to $250,000, on May 22, 2009, the FDIC issued a Financial 
Institution Letter, FIL-22-2009, encouraging institutions to post 
notices of the temporary increase in the deposit insurance limit 
through December 31, 2013. At that time, the FDIC provided an optional 
sign reflecting the temporary increase in deposit insurance coverage.

II. The Final Rule

A. Section 330.1 Definitions

    The final rule revises the FDIC's deposit insurance rules (12 CFR 
Part 330) to define the SMDIA as $250,000 and to remove provisions 
indicating that the SMDIA will return to $100,000. This change is made 
in response to the Dodd-Frank Act, which, among other provisions, made 
permanent the increase in the SMDIA from $100,000 to $250,000. The 
Dodd-Frank Act also

[[Page 49364]]

made the increase in the SMDIA to $250,000 retroactive to January 1, 
2008. This retroactivity provision only applies to a limited number of 
failed depository institutions, those that closed between January 1, 
2008, and October 3, 2008. The FDIC will implement the retroactive 
application of the $250,000 SMDIA without rulemaking.

B. Section 347.202 Definitions

    The final rule revises the FDIC's international banking rules (12 
CFR Part 347) to define the SMDIA as $250,000 and to remove provisions 
indicating that the SMDIA will return to $100,000. This change is made 
in response to the Dodd-Frank Act, as discussed above.

C. Section 328.1 Official Sign

    The final rule revises the official FDIC sign (12 CFR Part 328) to 
reflect the permanent increase in the SMDIA. The official sign will 
continue to have the same size, colors, and design. The only change is 
the replacement of ``$100,000'' with ``$250,000,'' so that the new 
official sign will read ``Each depositor insured to at least 
$250,000,'' instead of ``Each depositor insured to at least $100,000.'' 
This change is also made in response to the Dodd-Frank Act, as 
discussed above.
    As noted, under the Dodd-Frank Act, the $250,000 SMDIA became 
permanent on July 22, 2010. To ensure that depositors are accurately 
informed of the permanent SMDIA of $250,000, insured depository 
institutions should promptly obtain the new official signs and, upon 
receipt, display them without delay--in any event not later than 
January 3, 2011, the date for mandatory compliance with the final rule.
    The FDIC has made hard copies and an electronic file of the new 
official sign available free of charge to insured depository 
institutions. This will facilitate prompt implementation of the new 
sign by all insured depository institutions, including the limited 
number of institutions that continue to display the $100,000 limit, 
which is potentially misleading to depositors. The FDIC expects that 
these institutions, in particular, will act expeditiously to obtain and 
display the new official signs.

III. Administrative Procedure Act

    The FDIC believes that good cause exists for issuing the final rule 
without providing an opportunity for comment, pursuant to section 
553(b)(B) of the Administrative Procedure Act (``APA''), because 
seeking public comment under these circumstances is ``unnecessary,'' 
``impracticable,'' and ``contrary to the public interest.'' \8\ The 
FDIC also finds good cause for issuing the final rule without a 30-day 
delayed effective date, pursuant to section 553(d)(3) of the APA.
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    \8\ 5 U.S.C. 553(b)(B).
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    The Dodd-Frank Act amends section 11(a)(1)(E) of the Federal 
Deposit Insurance Act \9\ to permanently increase the SMDIA to 
$250,000. The final rule makes conforming amendments to the FDIC's 
regulations to reflect this statutory change. None of the other 
regulations affecting the calculation of deposit insurance are affected 
by the final rule.
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    \9\ 12 U.S.C. 1821(a)(1)(E).
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    The final rule merely conforms the FDIC's definition of the SMDIA 
to the language of the revised statute and conforms the official FDIC 
sign to reflect this permanent increase in deposit insurance coverage. 
There is no agency discretion that could be informed by the APA's 
notice and comment process. Therefore, the FDIC finds that notice and 
comment procedures are ``unnecessary'' and that the ``good cause'' 
exception to the APA's notice-and comment requirement applies. See, 
e.g., Gray Panthers Advocacy Comm. v. Sullivan, 936 F.2d 1284, 1290-92 
(DC Cir. 1991) (regulations that ``either restate or paraphrase the 
detailed requirements'' of a self-executing statute do not require 
notice and comment); Nat'l Customs Brokers & Forwarders Ass'n v. United 
States, 59 F.3d 1219, 1223-24 (Fed. Cir. 1995) (notice and comment 
unnecessary where Congress directed agency to change regulations and 
public would benefit from amendments).
    Additionally, a finding of good cause is warranted because it would 
be ``impracticable'' and ``contrary to the public interest'' to delay 
printing and distribution of a revised official sign in order to seek 
public comment on the revision. Because the revision to the SMDIA was 
effective one day after enactment of the Dodd-Frank Act, it is in the 
public interest for the Corporation to take immediate steps to make 
depositors aware of this permanent increase in deposit insurance 
coverage. A delay in distribution of signs advertising the new deposit 
insurance limit would be detrimental to this goal, and therefore, 
complying with formal notice and comment procedures is 
``impracticable'' and ``contrary to the public interest.''
    Finally, a finding of good cause for waiving the requirement of a 
30-day delayed effective date is warranted because of the need for 
immediate guidance to depositors, which implementation and distribution 
of the new official sign will provide. Also, a delayed effective date 
is unnecessary because the only provision of the final rule requiring 
institutions to take certain actions--i.e., the change in the official 
sign--would not be enforced until January 3, 2011.

IV. Paperwork Reduction Act

    The final rule will revise the FDIC's deposit insurance 
regulations. It will not involve any new collections of information 
pursuant to the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). 
Consequently, no information collection has been submitted to the 
Office of Management and Budget for review.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act requires an agency that is issuing a 
final rule to prepare and make available a regulatory flexibility 
analysis that describes the impact of the final rule on small entities. 
5 U.S.C. 603(a). The Regulatory Flexibility Act provides that an agency 
is not required to prepare and publish a regulatory flexibility 
analysis if the agency certifies that the final rule will not have a 
significant impact on a substantial number of small entities.
    The final rule implements the permanent increase in the SMDIA by 
the Dodd-Frank Act; the FDIC has no discretion in setting the SMDIA. 
Display of the official sign is required by section 18(a) of FDI Act. 
There would not be any compliance costs with displaying the official 
sign, because it would be provided by the FDIC free of charge. Insured 
banks have complied with similar advertising requirements for over 
seventy years without significant expense. Accordingly, pursuant to 
section 605(b) of the Regulatory Flexibility Act, the FDIC Board of 
Directors certifies that the final rule would not have a significant 
economic impact on a substantial number of small entities.

VI. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

[[Page 49365]]

VII. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the final 
rule is not a ``major rule'' within the meaning of the relevant 
sections of the Small Business Regulatory Enforcement Act of 1996 
(``SBREFA'') (5 U.S.C. 801 et seq.). As required by SBREFA, the FDIC 
will file the appropriate reports with Congress and the General 
Accounting Office so that the final rule may be reviewed.

VIII. Plain Language

    Section 722 of the Gramm-Leach-Blilely Act (Pub. L. 106-102, 113 
Stat. 1338, 1471), requires the Federal banking agencies to use plain 
language in all proposed and final rules published after January 1, 
2000. The FDIC has sought to present the final rule in a simple and 
straightforward manner.

List of Subjects

12 CFR Part 328

    Advertising, Bank deposit insurance, Savings associations, Signs 
and symbols.

12 CFR Part 330

    Bank deposit insurance, Banks, Banking, Reporting and recordkeeping 
requirements, Savings and loan associations, Trusts and trustees.

12 CFR Part 347

    Bank deposit insurance, Banks, Banking, International banking; 
Foreign banks.

0
For the reasons stated above, the Board of Directors of the Federal 
Deposit Insurance Corporation hereby amends parts 328, 330, and 347 of 
title 12 of the Code of Federal Regulations as follows:

PART 328--ADVERTISEMENT OF MEMBERSHIP

0
1. The authority citation for part 328 continues to read as follows:

    Authority: 12 U.S.C. 1818(a), 1813(m), 1819 (Tenth), 1828(a).


0
2. In Sec.  328.1, paragraph (a) is amended by revising the graphic 
image of the official sign to appear as follows:
    (a) * * *
    [GRAPHIC] [TIFF OMITTED] TR13AU10.000
    
* * * * *

PART 330--DEPOSIT INSURANCE COVERAGE

0
3. The authority citation for part 330 continues to read as follows:

    Authority: 12 U.S.C. 1813(1), 1813(m), 1817(i), 1818(q), 1819 
(Tenth), 1820(f), 1821(a), 1822(c).


0
4. In Sec.  330.1, paragraph (n) is revised to read as follows:


Sec.  330.1  Definitions.

* * * * *
    (n) Standard maximum deposit insurance amount, referred to as the 
``SMDIA'' hereafter, means $250,000 adjusted pursuant to subparagraph 
(F) of section 11(a)(1) of the FDI Act (12 U.S.C. 1821(a)(1)(F)).
* * * * *

PART 347--INTERNATIONAL BANKING

0
5. The authority citation for part 347 continues to read as follows:

    Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103, 
3104, 3105, 3108, 3109; Title IX, Pub. L. 98-181, 97 Stat. 1153.


0
6. In Sec.  347.202, paragraph (v) is revised to read as follows:


Sec.  347.202  Definitions.

* * * * *
    (v) Standard maximum deposit insurance amount, referred to as the 
``SMDIA'' hereafter, means $250,000 adjusted pursuant to subparagraph 
(F) of section 11(a)(1) of the FDI Act (12 U.S.C. 1821(a)(1)(F)).
* * * * *

    Dated at Washington DC, this 10th day of August 2010.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2010-20008 Filed 8-12-10; 8:45 am]
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