Statement of
Martin J. Gruenberg Chairman,
Federal Deposit Insurance Corporation,
Issuance of a Final Rule on Recordkeeping
For
Timely Deposit Insurance Determination
November 15, 2016
Timely access to insured deposits when a bank fails is critical to maintaining public
confidence in the banking system. The final rule the FDIC Board is considering today
would bolster the FDIC’s ability to provide depositors at large banks that have at least
two million accounts with the same rapid access to their insured funds as the FDIC
provides when a smaller institution fails. Typically, the FDIC is able to make most
insured deposits available to depositors by the next business day after a bank failure.
As set forth in the final rule, the FDIC is proposing to achieve its goal by generally
requiring banks with two million or more deposit accounts to improve the quality of their
deposit data and make changes to their information systems so that the FDIC could
make a prompt and accurate insurance determination.
While the final rule would apply to banks with at least two million deposit accounts,
some of the 38 banks that would be covered by the final rule now have more than 50
million deposit accounts, offer FDIC-insured accounts using complex account
structures, and use information technology systems that are more complex than smaller
banks typically employ. Many of them also have multiple deposit platforms inherited
through prior acquisitions. Quite obviously, as staff indicated, this rule would not apply
to community banks.
I would note that today’s action by the Board marks the culmination of a deliberative
rulemaking process that began in April 2015 with the publication of an advance notice of
proposed rulemaking, which was then followed by a notice of proposed rulemaking
published in February of this year. During this time the FDIC received a number of
helpful insights that were incorporated into the final rule we are considering today.
Some of the comments the FDIC received expressed concern about the interplay
between the recordkeeping requirements proposed for these covered institutions and
existing deposit insurance coverage rules for certain types of accounts, such as
brokered accounts, trust accounts, and other accounts where deposit insurance may be
eligible for pass-through coverage.
The FDIC carefully considered those and other comments received. As a result, the
FDIC adapted the final rule to align better with the deposit insurance rules, while at the
same time addressing the goal of ensuring prompt availability of insured funds at a
failed bank, regardless of the numbers and types of deposit accounts and deposit
systems involved.
Martin J. Gruenberg Chairman,
Federal Deposit Insurance Corporation,
Issuance of a Final Rule on Recordkeeping
For
Timely Deposit Insurance Determination
November 15, 2016
Timely access to insured deposits when a bank fails is critical to maintaining public
confidence in the banking system. The final rule the FDIC Board is considering today
would bolster the FDIC’s ability to provide depositors at large banks that have at least
two million accounts with the same rapid access to their insured funds as the FDIC
provides when a smaller institution fails. Typically, the FDIC is able to make most
insured deposits available to depositors by the next business day after a bank failure.
As set forth in the final rule, the FDIC is proposing to achieve its goal by generally
requiring banks with two million or more deposit accounts to improve the quality of their
deposit data and make changes to their information systems so that the FDIC could
make a prompt and accurate insurance determination.
While the final rule would apply to banks with at least two million deposit accounts,
some of the 38 banks that would be covered by the final rule now have more than 50
million deposit accounts, offer FDIC-insured accounts using complex account
structures, and use information technology systems that are more complex than smaller
banks typically employ. Many of them also have multiple deposit platforms inherited
through prior acquisitions. Quite obviously, as staff indicated, this rule would not apply
to community banks.
I would note that today’s action by the Board marks the culmination of a deliberative
rulemaking process that began in April 2015 with the publication of an advance notice of
proposed rulemaking, which was then followed by a notice of proposed rulemaking
published in February of this year. During this time the FDIC received a number of
helpful insights that were incorporated into the final rule we are considering today.
Some of the comments the FDIC received expressed concern about the interplay
between the recordkeeping requirements proposed for these covered institutions and
existing deposit insurance coverage rules for certain types of accounts, such as
brokered accounts, trust accounts, and other accounts where deposit insurance may be
eligible for pass-through coverage.
The FDIC carefully considered those and other comments received. As a result, the
FDIC adapted the final rule to align better with the deposit insurance rules, while at the
same time addressing the goal of ensuring prompt availability of insured funds at a
failed bank, regardless of the numbers and types of deposit accounts and deposit
systems involved.
The final rule also addresses commenters’ concerns about the proposed
implementation period by extending it from two years to three years. The FDIC
anticipates working closely with the institutions covered by the rule during this time.
Finally, the rule provides for consideration of extensions or exceptions in appropriate
circumstances.
I support publication of this final rule. I would like to thank the FDIC staff for their
excellent work and my fellow Board members for their support of this important initiative.
Last Updated 11/15/2016
implementation period by extending it from two years to three years. The FDIC
anticipates working closely with the institutions covered by the rule during this time.
Finally, the rule provides for consideration of extensions or exceptions in appropriate
circumstances.
I support publication of this final rule. I would like to thank the FDIC staff for their
excellent work and my fellow Board members for their support of this important initiative.
Last Updated 11/15/2016