[Federal Register Volume 76, Number 29 (Friday, February 11, 2011)]
[Proposed Rules]
[Pages 7740-7743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-3085]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 330

RIN 3064-AD37


Amendments to Deposit Insurance Regulations: Deposit Insurance 
Coverage Training; SMDIA Notification

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice of proposed rulemaking with request for comments.

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SUMMARY: The FDIC is proposing a rule that would promote public 
confidence in Federal deposit insurance by providing depositors with 
improved access to accurate information about FDIC insurance coverage 
of their accounts at insured depository institutions (IDIs). The 
proposed rule would accomplish this goal in three ways. First, it would 
require certain IDI personnel to complete FDIC-provided training on the 
fundamentals of FDIC deposit insurance coverage. These IDI personnel 
would include any employee with authority to open deposit accounts and/
or respond to customer questions about FDIC insurance coverage 
(hereafter ``employees''). Second, the proposed rule would require IDIs 
to implement procedures so that employees, when opening a new deposit 
account, inquire whether the customer has an ownership interest in any 
other account at the IDI and, if so, whether the customer's aggregate 
ownership interest in deposit accounts, including the new account, 
exceeds the Standard Maximum Deposit Insurance Amount (``SMDIA''). If 
this is the case, then the IDI employee would be required to provide 
the customer with a copy of the FDIC's publication, Deposit Insurance 
Summary. The proposed rule would apply to deposit accounts opened in 
person at the IDI, by telephone, mail, and via the Internet or other 
technology. Third, the rule would require IDIs to provide a link to the 
FDIC's Electronic Deposit Insurance Estimator (``EDIE'') on any Web 
site the IDI maintains for use by deposit customers.

DATES: Written comments must be received by the FDIC no later than 
April 12, 2011.

ADDRESSES: Interested parties are invited to submit written comments to 
the FDIC by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments.
     E-mail: [email protected]. Include RIN  3064-AD37 
in the subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.
     Hand Delivery/Courier: Comments may be hand-delivered to 
the guard station located at the rear of the FDIC's 550 17th Street 
building (accessible from F Street) on business days between 7 a.m. and 
5 p.m.
    Instructions: All submissions must include the agency name and use 
the title ``Part 330--Deposit Insurance Education.'' All comments 
received will be posted generally without change to http://www.fdic.gov/regulations/laws/federal/propose.html, including any 
personal information provided. Paper copies of public comments may be 
ordered from the Public Information Center by telephone at (877) 275-
3342 or (703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Martin W. Becker, Senior Consumer 
Affairs Specialist, Deposit Insurance Section, Division of Supervision 
and Consumer Protection, (202) 898-6644, [email protected]; or Catherine 
A.

[[Page 7741]]

Ribnick, Counsel, Legal Division, (202) 898-6803, [email protected]; 
Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Insured Depository Institution Employee Education on Deposit 
Insurance

    FDIC regulations currently do not require employees at IDIs to be 
trained in the basic principles of FDIC deposit insurance coverage or 
to assist customers in ascertaining whether their deposits are fully 
covered by Federal deposit insurance. The FDIC receives tens of 
thousands of telephone calls, e-mails and correspondence annually from 
depositors and IDI employees seeking information and advice about FDIC 
deposit insurance coverage. These inquiries reveal that many depositors 
do not know whether their deposits are fully insured and that bank 
employees often are unfamiliar with the scope of deposit insurance 
coverage. In addition, the FDIC regularly receives complaints from IDI 
customers, asserting that their banks were unable to answer their 
deposit insurance questions or, in some cases, may have provided 
inaccurate deposit insurance guidance. The FDIC is concerned that these 
situations could cause financial harm to depositors and have the 
potential to undermine customer confidence in depository institutions 
and the Federal deposit insurance system.
    To address the issues described above, the FDIC is proposing to add 
a new section to its insurance regulations, which appear at 12 CFR Part 
330. This new section would establish three new requirements for IDIs.
    First, IDIs would be required to have employees with the authority 
to open deposit accounts and/or respond to customer questions about 
FDIC deposit insurance coverage complete a computer-based instructional 
(``CBI'') program provided to IDIs by the FDIC. This program would 
provide users with an introduction to FDIC deposit insurance coverage, 
with specific focus on the general principles of insurance coverage and 
the rules and requirements for the account ownership categories. It 
would also introduce users to the information resources available from 
the FDIC, including EDIE, deposit insurance guides and on-demand 
videos. Further, this self-paced training module would include frequent 
knowledge checks to help the user evaluate his or her understanding of 
the information presented.
    This self-administered training program would require less than two 
hours for most employees to complete. All employees would be required 
to complete the training once in every 12-month period. Each new 
employee with the duties previously described would be required to take 
the training within 30 days of commencing employment. Current employees 
at the time of the effective date of the final rule would be required 
to take the training within 60 days of the effective date.
    Further, IDIs are encouraged to provide additional training, using 
a range of media, to help employees understand the FDIC's deposit 
insurance rules. The FDIC provides multiple, cost-free training 
resources on the deposit insurance rules to the industry, for use on a 
voluntary basis, including in-person training sessions, written 
materials, videos, EDIE and telephone seminars presented by FDIC 
personnel.
    Second, IDIs would be required to institute procedures ensuring 
that, regardless of the manner in which a customer opens a new account, 
the employee opening the account must inquire as to the existence of 
other deposit accounts at the same IDI and whether the aggregated 
account balance exceeds the SMDIA, currently $250,000. Thus, for an 
account opened in person or by telephone, the employee opening the 
account would ask the customer whether the customer maintains any other 
accounts at the IDI (including accounts opened at other IDI branch 
locations) and, if so, whether the combined balances of all the 
accounts exceed the SMDIA. If the response is in the affirmative, the 
IDI employee would provide the customer with a copy of the FDIC's 
Deposit Insurance Summary publication. In the case of deposit accounts 
opened by mail, via the Internet or by means of other technology, these 
inquiries can be included in the paper or electronic application form, 
with a link to the Deposit Insurance Summary publication supplied. The 
rule would not require an IDI to provide counsel or advice to the 
customer regarding how to structure multiple deposit accounts to 
maximize deposit insurance coverage.
    The rule would apply to all types of deposit accounts opened by a 
customer, with the exception of pass-through accounts as to which the 
IDI does not, in the normal course of business, keep records of the 
beneficial owners. The rule would not impose a deposit insurance 
training requirement on third parties (e.g., deposit brokers or 
affinity groups) that directly or indirectly promote the deposit of 
funds in a specified IDI. However, the FDIC makes ample deposit 
insurance resources publicly available, and the Corporation urges any 
entity that encourages or facilitates the placement of deposits in IDIs 
to provide appropriate information in response to client inquiries 
regarding FDIC deposit insurance coverage.
    Third, the proposed rule would require an IDI to provide a link to 
EDIE on any Web site it maintains for use by customers. IDIs can link 
to EDIE, at no cost, in two ways--via Online EDIE or Brandable EDIE. 
Online EDIE is available directly from the FDIC's Web site at http://www.fdic.gov/edie. With Online EDIE, IDIs link to the application, 
which resides on the FDIC's Web site, and IDI customers are then taken 
from the IDI's Web site to the FDIC's Web site. Brandable EDIE, which 
can be accessed free from FDIC Connect, allows an IDI to customize and 
integrate the EDIE application into the IDI's own Web site, so 
customers can access EDIE without leaving the IDI's Web site.

II. Regulatory Burden on Insured Depository Institutions

    The FDIC believes the implementation of this rule would not impose 
a significant regulatory burden on the industry. The proposed rule is 
circumscribed and modest in its requirements. First, IDI employees with 
authority to open accounts and/or respond to a customer's deposit 
insurance question would be required to complete a short training 
program annually. The training program would be provided to IDIs by the 
FDIC at no cost. Second, when opening a new account, employees would 
simply inquire (1) whether the customer has other deposits at the same 
IDI and (2) whether such deposits, including the new account, exceed 
the SMDIA. The rule would not require IDI employees to advise customers 
on how to maximize deposit insurance coverage. The proposed rule would 
require IDI employees to provide the customer with the FDIC's 
publication, Deposit Insurance Summary. Lastly, the rule would require 
an IDI to maintain a link to EDIE on its Web site.
    The Corporation believes it is reasonable to expect employees at 
IDIs to have sufficient familiarity with basic rules for Federal 
deposit insurance coverage so employees can provide accurate 
information to customers who wish to confirm their deposit insurance 
coverage. To the extent that compliance with the proposed rule imposes 
an obligation on the industry, it must be weighed against the benefit 
to depositors by reinforcing their confidence in Federal deposit 
insurance and preventing unnecessary financial losses to customers if 
their IDI should fail.

[[Page 7742]]

III. Request for Comments

    The FDIC requests comment on all aspects of the proposed rule, 
including cost, regulatory burden and benefits to consumers. In 
particular, the FDIC seeks comments with respect to the following 
questions:
     Does the proposed rule strike the right balance between 
meeting depositors' need for accurate deposit insurance information and 
the potential cost to and regulatory burden on IDIs?
     Is the scope of the proposed rule appropriate? In its 
present form, the rule would require training for all IDI employees 
with authority to open accounts and/or respond to customers' inquiries 
on deposit insurance coverage. Should the training extend to all IDI 
employees who work in bank retail offices, not just the employees with 
these specific responsibilities?
     The rule would require IDI employees to inquire whether 
the customer has an ownership interest in any other deposit accounts at 
the IDI and, if so, whether the customer's total ownership interest in 
deposit accounts, including the new account, exceeds the Standard 
Maximum Deposit Insurance Amount. Should the inquiry only apply to 
aggregated deposits that exceed the SMDIA of $250,000 or to aggregated 
deposits that may approach the SMDIA? And if so, what dollar amount or 
percentage of the SMDIA should trigger the obligation to provide 
depositors with the FDIC's Deposit Insurance Summary publication?
     In addition to requiring IDIs to make EDIE available on 
their Web sites, should the FDIC require IDIs to maintain, in their 
retail office lobbies, a dedicated computer terminal containing the 
EDIE application, which all customers could use on their own, or with 
assistance from IDI employees, to generate reports on the customer's 
deposit insurance coverage?
     In addition to requiring IDIs to provide the FDIC's 
Deposit Insurance Summary publication to depositors whose combined 
deposits at the IDI exceed the SMDIA, should IDIs be required to make 
this publication available in their retail office lobbies so all 
depositors have access to this important information?
     Should the CBI software program include a feature that 
would allow IDIs to confirm that training has been completed by covered 
employees?

IV. Regulatory Analysis and Procedure

A. Solicitation of Comments on Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act, Public Law 106-102, 113 
Stat. 1338, 1471 (Nov. 12, 1999), requires the Federal banking agencies 
to use plain language in all proposed and final rules published after 
January 1, 2000. We invite your comments on how to make this proposal 
easier to understand. For example, have we organized the material to 
suit your needs? If not, how could this material be better organized? 
Are the requirements in the proposed regulation clearly stated? If not, 
how could the regulation be more clearly stated? Does the proposed 
regulation contain language or jargon that is not clear? If so, which 
language requires clarification? Would a different format (grouping and 
order of sections, use of headings, paragraphing) make the regulation 
easier to understand? If so, what changes to the format would make the 
regulation easier to understand? What else could we do to make the 
regulation easier to understand?

B. Paperwork Reduction Act

Request for Comment on Proposed Information Collection
    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (44 U.S.C. Ch. 3501 et seq.), the FDIC may not conduct or 
sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (OMB) control number.
    The proposed rule requires IDIs to implement procedures so that, 
whenever a customer opens a new deposit account at an insured 
depository institution, the employee opening the account shall inquire 
whether the customer has an ownership interest in any other accounts at 
the IDI and, if so, whether the customer's aggregate ownership interest 
in deposit accounts, including the new account, exceeds the Standard 
Maximum Deposit Insurance Amount. If the customer responds 
affirmatively, then the IDI employee shall provide the customer with 
the FDIC's publication, Deposit Insurance Summary. Since this is an 
FDIC-prepared publication, there is no paperwork burden involved. In 
the case of deposit accounts opened by mail or via the Internet or 
other technology, the publication can be provided in paper form or 
through a link to the electronic version.
    Commenters may submit comments on aspects of this notice that may 
affect reporting and disclosure requirements to the addresses listed in 
the ADDRESSES section of this NPR. Paperwork Burden comments should 
reference ``Part 330--Deposit Insurance Education, OMB Control No. 
3064-NEW.''

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA'') requires a Federal agency 
publishing a notice of proposed rulemaking to prepare and make 
available for public comment an initial regulatory flexibility analysis 
that describes the impact of the proposed rule on small entities. 5 
U.S.C. 603(a). Pursuant to regulations issued by the Small Business 
Administration (13 CFR 121.201), a ``small entity'' includes a bank 
holding company, commercial bank or savings association with assets of 
$175 million or less (collectively, small banking organizations). The 
RFA provides that an agency is not required to prepare and publish a 
regulatory flexibility analysis if the agency certifies that the 
proposed rule would not have a significant impact on a substantial 
number of small entities. 5 U.S.C. 605(b). Pursuant to section 605(b) 
of the RFA, the FDIC certifies that the proposed rule would not have a 
significant economic impact on a substantial number of small entities.

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

    The FDIC has determined that the proposed 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. 268).

List of Subjects in 12 CFR Part 330

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

    For the reasons set forth in the preamble, the Board of Directors 
of the Federal Deposit Insurance Corporation proposes to amend part 330 
of Title 12 of the Code of Federal Regulations as follows:

PART 330--DEPOSIT INSURANCE COVERAGE

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

    Authority: 12 U.S.C. 1813(l), 1813(m), 1817(i), 1818(q), 
1819(Tenth), 1820(g), 1821(a).

    2. Add Sec.  330.17 to read as follows:

[[Page 7743]]

Sec.  330.17  Deposit insurance training.

    (a) Purpose. The purpose of this section is to maintain confidence 
in Federally insured depository institutions and to protect depositors 
by requiring insured depository institution employees with authority to 
open accounts and/or respond to customer inquiries regarding deposit 
insurance coverage (``employees''), to complete training on basic 
deposit insurance principles once in any twelve month period. New 
employees must complete the training within 30 days of commencing 
employment. Current employees are required to complete the training 
within 60 days of the effective date of the final rule.
    (b) Applicability. The requirements in this section shall apply to 
all insured depository institution employees who have the authority to 
open accounts and/or respond to customer inquiries regarding deposit 
insurance coverage.
    (c) Procedure. (1) Insured Depository Institution Personnel 
Education. (i) Training. An insured depository institution must require 
each employee with the authority to open accounts and/or respond to 
customer inquiries regarding deposit insurance coverage to complete 
basic deposit insurance training annually, using an FDIC-provided 
training module. Each new employee with the authority to open accounts 
and/or respond to customer inquiries regarding deposit insurance 
coverage must be required to undergo such training within 30 days of 
commencing employment.
    (ii) Training Materials. The FDIC will provide the training module 
in the form of a self-administered computer-based instructional 
program.
    (2) Ascertaining Insured Status. An insured depository institution 
must implement procedures so that, whenever a customer opens a new 
deposit account at an insured depository institution, the employee 
opening the account shall inquire whether the customer has an ownership 
interest in any other accounts at the IDI and, if so, whether the 
customer's aggregate ownership interest in deposit accounts, including 
the new account, exceeds the Standard Maximum Deposit Insurance Amount. 
If the customer responds affirmatively, then the IDI employee shall 
provide the customer with the FDIC's Deposit Insurance Summary 
publication. In the case of deposit accounts opened by mail or via the 
Internet or other technology, these inquiries can be included in the 
paper or electronic application form, with the link to the Deposit 
Insurance Summary publication provided.
    (d) Definitions. (1) Account shall mean a deposit account at a 
depository institution that is held by or offered to a customer. It 
includes time, demand, savings, and negotiable order of withdrawal 
accounts. The term does not include a fiduciary account as to which the 
insured depository institution does not, in the normal course of 
business, keep records of beneficial owners of the deposits in the 
account.
    (2) New Account shall mean any deposit account at an insured 
depository institution to which the insured depository institution 
assigns a unique identifier that serves to distinguish the account from 
other, existing accounts at the depository institution.

    By order of the Board of Directors.

    Dated at Washington, DC, this 7th day of February, 2011.

Federal Deposit Insurance Corporation.

Robert E. Feldman,
Executive Secretary.
[FR Doc. 2011-3085 Filed 2-10-11; 8:45 am]
BILLING CODE 6714-01-P