10026 Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Proposed Rules
1 12 U.S.C. 1819(a)(Tenth); 1820(g);
1821(d)(4)(B)(iv).
2 12 U.S.C. 1821(f)(1).
3 12 U.S.C. 1821(a)(1)(C), 12 U.S.C. 1821(a)(1)(E).
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 370
RIN 3064–AE33
Recordkeeping for Timely Deposit
Insurance Determination
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
SUMMARY: The FDIC is seeking comment
on a proposed rule that would facilitate
prompt payment of FDIC-insured
deposits when large insured depository
institutions fail. The proposal would
require insured depository institutions
that have two million or more deposit
accounts to maintain complete and
accurate data on each depositor’s
ownership interest by right and capacity
for all of the institution’s deposit
accounts, and to develop the capability
to calculate the insured and uninsured
amounts for each deposit owner by
ownership right and capacity for all
deposit accounts, which would be used
by the FDIC to make deposit insurance
determinations in the event of the
insured depository institution’s failure.
DATES: Comments must be received by
May 26, 2016.
ADDRESSES: You may submit comments
on the notice of proposed rulemaking
using any of the following methods:
• Agency Web site: https://
www.fdic.gov/regulations/laws/federal.
Follow the instructions for submitting
comments on the agency Web site.
• Email: comments@fdic.gov. Include
RIN 3064—AE33 on 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: Comments may be
hand delivered to 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: All comments
received, including any personal
information provided, will be posted
generally without change to https://
www.fdic.gov/regulations/laws/federal.
FOR FURTHER INFORMATION CONTACT:
Marc Steckel, Deputy Director, Division
of Resolutions and Receiverships, 571–
858–8224; Teresa J. Franks, Associate
Director, Division of Resolutions and
Receiverships, 571–858–8226; Shane
Kiernan, Counsel, Legal Division, 703–
562–2632; Karen L. Main, Counsel,
Legal Division, 703–562–2079.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The FDIC is proposing new
requirements for certain large and
complex insured depository institutions
(‘‘IDIs’’), as measured by number of
deposit accounts, to ensure that
depositors have prompt access to
insured funds in the event of a failure.
When a bank fails, the FDIC must
provide depositors insured funds ‘‘as
soon as possible’’ after failure while also
resolving the failed bank in the least
costly manner.
The FDIC makes deposit insurance
determinations after calculating the net
amount due to depositors of a failed
institution based upon the laws and
regulations governing deposit insurance.
While the general coverage limit of
$250,000 is widely understood and may
appear to be easily applied, the laws
and regulations governing deposit
insurance limits are more detailed,
which necessitates more complex
processing. The process begins by
aggregating the amounts of all deposits
in the failed institution by depositor
according to the rights and capacities
associated with each account type. This
process becomes more complicated, for
example, when there are a large number
of deposit accounts, when the failed
institution has multiple deposit
systems, when identifying information
for the same depositor in separate
accounts is incorrect or inconsistent,
when beneficial owners of pass-through
accounts have not been identified, or
when beneficiaries of trust accounts and
their relative interests have not been
identified.
The proposed rule would reduce the
difficulties the FDIC faces when making
prompt deposit insurance
determinations at the largest IDIs. It
would require IDIs with two million or
more deposit accounts to maintain
complete and accurate depositor
information and to develop the
capability to calculate deposit insurance
coverage for all deposit accounts using
their own information technology
system (‘‘IT system’’). The proposed rule
would ensure that customers of both
large and small failed banks receive the
same prompt access to their funds,
reducing disparities that might
undermine market discipline or create
unintended competitive advantages in
the market for large deposits.
The size and complexity of the IDIs
affected by this rule justify imposing
more specific data requirements on
those IDIs than on smaller IDIs to ensure
that the FDIC can make prompt deposit
insurance determinations. Institutions
covered by the proposed rule often use
multiple deposit systems, which may
complicate the FDIC’s deposit insurance
determination as described in IV. Need
for Further Rulemaking. While
challenges resulting from incomplete
information are present when any bank
fails, obtaining the necessary
information could significantly delay
the availability of funds when
information is incomplete for millions
of accounts. Additionally, larger IDIs
generally rely on credit-sensitive
funding more than smaller IDIs do,
which makes them more likely to suffer
a liquidity-induced failure. This
dynamic increases the risk that the FDIC
would have less lead time to prepare for
administering deposit claims as part of
a resolution. Further, to establish a
bridge depository institution, which is a
likely resolution strategy for large
complex institutions, the FDIC must
generally have the ability to rapidly
determine the amount of insured and
uninsured deposits held by the
predecessor failed bank. Having the
option to establish a bridge depository
institution enhances the FDIC’s ability
to resolve a failed IDI by transferring
parts to smaller institutions rather than
arranging the purchase and assumption
of the entire bank by another large bank.
This option greatly enhances the FDIC’s
ability to market the failed IDI and
preserve its franchise value.
Ensuring the swift availability of
funds for millions of depositors at a
large IDI would contribute to financial
stability. Confidence that the FDIC can
promptly determine insured amounts
will reinforce the understanding that
any size bank can fail without systemic
disruptions. That understanding would,
in turn, reduce the moral hazard that
might otherwise induce the largest
banks to take excessive risks.
II. Legal Authority
The FDIC is authorized to prescribe
rules and regulations as it may deem
necessary to carry out the provisions of
the Federal Deposit Insurance Act (‘‘FDI
Act’’).1 Under the FDI Act, the FDIC is
responsible for paying deposit insurance
‘‘as soon as possible’’ following the
failure of an IDI.2 To pay deposit
insurance, the FDIC uses a failed IDI’s
records to aggregate the amounts of all
deposits that are maintained by a
depositor in the same right and capacity
and then applies the standard maximum
deposit insurance amount (‘‘SMDIA’’) of
$250,000.3 As authorized by law, the
FDIC must rely on the failed
institution’s deposit account records to
VerDate Sep<11>2014 20:50 Feb 25, 2016 Jkt 238001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\26FEP3.SGM 26FEP3
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
1 12 U.S.C. 1819(a)(Tenth); 1820(g);
1821(d)(4)(B)(iv).
2 12 U.S.C. 1821(f)(1).
3 12 U.S.C. 1821(a)(1)(C), 12 U.S.C. 1821(a)(1)(E).
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 370
RIN 3064–AE33
Recordkeeping for Timely Deposit
Insurance Determination
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
SUMMARY: The FDIC is seeking comment
on a proposed rule that would facilitate
prompt payment of FDIC-insured
deposits when large insured depository
institutions fail. The proposal would
require insured depository institutions
that have two million or more deposit
accounts to maintain complete and
accurate data on each depositor’s
ownership interest by right and capacity
for all of the institution’s deposit
accounts, and to develop the capability
to calculate the insured and uninsured
amounts for each deposit owner by
ownership right and capacity for all
deposit accounts, which would be used
by the FDIC to make deposit insurance
determinations in the event of the
insured depository institution’s failure.
DATES: Comments must be received by
May 26, 2016.
ADDRESSES: You may submit comments
on the notice of proposed rulemaking
using any of the following methods:
• Agency Web site: https://
www.fdic.gov/regulations/laws/federal.
Follow the instructions for submitting
comments on the agency Web site.
• Email: comments@fdic.gov. Include
RIN 3064—AE33 on 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: Comments may be
hand delivered to 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: All comments
received, including any personal
information provided, will be posted
generally without change to https://
www.fdic.gov/regulations/laws/federal.
FOR FURTHER INFORMATION CONTACT:
Marc Steckel, Deputy Director, Division
of Resolutions and Receiverships, 571–
858–8224; Teresa J. Franks, Associate
Director, Division of Resolutions and
Receiverships, 571–858–8226; Shane
Kiernan, Counsel, Legal Division, 703–
562–2632; Karen L. Main, Counsel,
Legal Division, 703–562–2079.
SUPPLEMENTARY INFORMATION:
I. Policy Objectives
The FDIC is proposing new
requirements for certain large and
complex insured depository institutions
(‘‘IDIs’’), as measured by number of
deposit accounts, to ensure that
depositors have prompt access to
insured funds in the event of a failure.
When a bank fails, the FDIC must
provide depositors insured funds ‘‘as
soon as possible’’ after failure while also
resolving the failed bank in the least
costly manner.
The FDIC makes deposit insurance
determinations after calculating the net
amount due to depositors of a failed
institution based upon the laws and
regulations governing deposit insurance.
While the general coverage limit of
$250,000 is widely understood and may
appear to be easily applied, the laws
and regulations governing deposit
insurance limits are more detailed,
which necessitates more complex
processing. The process begins by
aggregating the amounts of all deposits
in the failed institution by depositor
according to the rights and capacities
associated with each account type. This
process becomes more complicated, for
example, when there are a large number
of deposit accounts, when the failed
institution has multiple deposit
systems, when identifying information
for the same depositor in separate
accounts is incorrect or inconsistent,
when beneficial owners of pass-through
accounts have not been identified, or
when beneficiaries of trust accounts and
their relative interests have not been
identified.
The proposed rule would reduce the
difficulties the FDIC faces when making
prompt deposit insurance
determinations at the largest IDIs. It
would require IDIs with two million or
more deposit accounts to maintain
complete and accurate depositor
information and to develop the
capability to calculate deposit insurance
coverage for all deposit accounts using
their own information technology
system (‘‘IT system’’). The proposed rule
would ensure that customers of both
large and small failed banks receive the
same prompt access to their funds,
reducing disparities that might
undermine market discipline or create
unintended competitive advantages in
the market for large deposits.
The size and complexity of the IDIs
affected by this rule justify imposing
more specific data requirements on
those IDIs than on smaller IDIs to ensure
that the FDIC can make prompt deposit
insurance determinations. Institutions
covered by the proposed rule often use
multiple deposit systems, which may
complicate the FDIC’s deposit insurance
determination as described in IV. Need
for Further Rulemaking. While
challenges resulting from incomplete
information are present when any bank
fails, obtaining the necessary
information could significantly delay
the availability of funds when
information is incomplete for millions
of accounts. Additionally, larger IDIs
generally rely on credit-sensitive
funding more than smaller IDIs do,
which makes them more likely to suffer
a liquidity-induced failure. This
dynamic increases the risk that the FDIC
would have less lead time to prepare for
administering deposit claims as part of
a resolution. Further, to establish a
bridge depository institution, which is a
likely resolution strategy for large
complex institutions, the FDIC must
generally have the ability to rapidly
determine the amount of insured and
uninsured deposits held by the
predecessor failed bank. Having the
option to establish a bridge depository
institution enhances the FDIC’s ability
to resolve a failed IDI by transferring
parts to smaller institutions rather than
arranging the purchase and assumption
of the entire bank by another large bank.
This option greatly enhances the FDIC’s
ability to market the failed IDI and
preserve its franchise value.
Ensuring the swift availability of
funds for millions of depositors at a
large IDI would contribute to financial
stability. Confidence that the FDIC can
promptly determine insured amounts
will reinforce the understanding that
any size bank can fail without systemic
disruptions. That understanding would,
in turn, reduce the moral hazard that
might otherwise induce the largest
banks to take excessive risks.
II. Legal Authority
The FDIC is authorized to prescribe
rules and regulations as it may deem
necessary to carry out the provisions of
the Federal Deposit Insurance Act (‘‘FDI
Act’’).1 Under the FDI Act, the FDIC is
responsible for paying deposit insurance
‘‘as soon as possible’’ following the
failure of an IDI.2 To pay deposit
insurance, the FDIC uses a failed IDI’s
records to aggregate the amounts of all
deposits that are maintained by a
depositor in the same right and capacity
and then applies the standard maximum
deposit insurance amount (‘‘SMDIA’’) of
$250,000.3 As authorized by law, the
FDIC must rely on the failed
institution’s deposit account records to
VerDate Sep<11>2014 20:50 Feb 25, 2016 Jkt 238001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\26FEP3.SGM 26FEP3
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
10027Federal Register / Vol. 81, No. 38 / Friday, February 26, 2016 / Proposed Rules
4 12 U.S.C. 1822(c); 12 CFR 330.5.
5 12 U.S.C. 1823(c)(4).
6 12 CFR 360.9. See 73 FR 41180 (July 17, 2008).
7 12 CFR 360.9(b)(1). 8 See 12 CFR 330.7.
identify deposit owners and the right
and capacity in which deposits are
owned.4 In addition, the FDIC operates
under a mandate to implement the
resolution of a failed IDI at the least
possible cost to the Deposit Insurance
Fund.5 Requiring institutions with two
million or more deposit accounts to
maintain complete and accurate data
regarding deposit ownership and to
have IT systems that can be used by the
FDIC to calculate deposit insurance
coverage in the event of failure will
enable the prompt payment of deposit
insurance and preserve the FDIC’s
ability to implement the least costly
resolution of such an institution.
III. Current Regulatory Approach
Although the statutory requirement
that the FDIC pay insurance ‘‘as soon as
possible’’ does not require the FDIC to
pay insurance within a specific time
period, the FDIC strives to pay
insurance promptly. Indeed, the FDIC
strives to make most insured deposits
available to depositors by the next
business day after a bank fails. The FDIC
believes that prompt payment of deposit
insurance is essential for several
reasons. First, prompt payment of
deposit insurance maintains public
confidence in the deposit insurance
system as well as in the banking system.
Second, depositors must have prompt
access to their insured funds in order to
meet their financial needs and
obligations. Third, a delay in the
payment of deposit insurance—
especially in the case of the failure of
one of the largest insured depository
institutions—could have systemic
consequences. Fourth, a delay could
reduce the franchise value of the failed
bank and thus increase the cost to the
Deposit Insurance Fund. Fifth, prompt
payment would reduce the likelihood
that disruptions in the check clearing
cycle or to direct debit arrangements
would occur during the resolution
process.
The FDIC took an initial step toward
ensuring that prompt deposit insurance
determinations could be made at large
insured depository institutions through
the issuance in July 2008 of § 360.9 of
the FDIC’s regulations.6 Section 360.9
applies to IDIs with at least $2 billion
in domestic deposits and at least
250,000 deposit accounts or $20 billion
in total assets.7 Section 360.9 requires
these institutions to be able to provide
the FDIC with standard deposit account
information that can be used in the
event of the institution’s failure. The
appendices to part 360 prescribe the
structure for the data files that those
institutions must provide to the FDIC.
However, they are permitted to populate
the data fields by using only preexisting
data elements. If the institution does not
maintain the information to complete a
particular data field, then a null value
can be used in that field. As a result of
this discretionary approach, these
institutions’ standard data files are
frequently incomplete. Section 360.9
also requires these institutions to
maintain the technological capability to
automatically place and release holds
on deposit accounts if an insurance
determination could not be made by the
FDIC by the next business day after
failure. While § 360.9 would assist the
FDIC in fulfilling its legal mandates
regarding the resolution of failed
institutions subject to that rule, the
FDIC believes that if a large institution
were to fail with little prior warning,
additional measures would be needed to
ensure the prompt and accurate
payment of deposit insurance to all
depositors.
IV. Need for Further Rulemaking
While the FDIC is authorized to rely
upon the account records of a failed IDI
to identify owners and ownership rights
and capacities, in the FDIC’s experience
it is not unusual for a failed bank’s
records to be ambiguous or incomplete.
For example, the FDIC might discover
multiple accounts under one name but
at different addresses or under different
names but at the same address. The
problem of accurately identifying the
owners of deposits is exacerbated when
an account at a failed bank has been
opened through a deposit broker or
other agent or custodian and neither the
name nor the address of the owner
appears in the failed bank’s records.
Often in such cases, the only party
identified in the records is the agent or
custodian. (In the case of accounts held
by agents or custodians, the FDIC
provides ‘‘pass-through’’ insurance
coverage, meaning that the coverage
‘‘passes through’’ the agent or custodian
to each of the actual owners.8) Trust
accounts may also present challenges to
an accurate determination of deposit
insurance coverage, even when the
owner of a particular account is clearly
disclosed in the failed bank’s account
records. The identities of the
beneficiaries might not be contained in
the bank’s records or electronically
stored in a structured way using
standardized formatting. A further
complication is that bank records on
trust accounts are often in paper form or
electronically scanned images that
require a time-consuming manual
review.
Under each of these circumstances, in
order to ensure the accurate payment of
deposit insurance, the FDIC may need to
delay the payment of insured amounts
to depositors while it manually reviews
files and obtains additional information
as to the actual owners or beneficiaries
and their respective interests. Such
delays in the insurance determination
process could increase the likelihood of
disruptions to an assuming institution’s
or an FDIC-managed bridge bank’s back
office functions, such as the check
clearing cycle and direct debit
arrangements.
While these challenges to accurately
determining and promptly paying
deposit insurance may be present at any
size of failed institution, they become
increasingly formidable as the size and
complexity of the institution increases.
Larger institutions are generally more
complex, have more deposit accounts,
greater geographic dispersion, multiple
deposit systems, and more issues with
data accuracy and completeness. These
factors, which all contribute to the
difficulty of making a prompt deposit
insurance determination, have become
more pronounced over time and can be
attributed largely to consolidation in the
banking industry. From 2004 to 2014,
the largest number of deposit accounts
held at a single IDI increased 119
percent, and the deposit accounts at the
ten banks having the most deposit
accounts increased 106 percent. As a
result of this concentration, the largest
banks have become even more complex
than before, with greater potential for
significant IT systems disparities, as
well as data accuracy and completeness
problems. The largest IDIs which grew
through acquisition have inherited the
legacy deposit account systems of the
acquired banks. Those systems might
have missing and inaccurate deposit
account information; the acquired
records might not be automated or
compatible with the acquired
institution’s deposit systems—resulting
in multiple deposit platforms.
Although the largest institutions are
still able to conduct their banking
operations without expending the
resources necessary to integrate these
inherited systems or update the
acquired deposit account files, the state
of their deposit systems would
complicate and prolong the deposit
insurance determination process in the
event of failure. Because delays in
deposit insurance determinations could
lead to bank runs or other systemic
problems, the FDIC believes that
VerDate Sep<11>2014 20:50 Feb 25, 2016 Jkt 238001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 E:\FR\FM\26FEP3.SGM 26FEP3
mstockstill on DSK4VPTVN1PROD with PROPOSALS3
4 12 U.S.C. 1822(c); 12 CFR 330.5.
5 12 U.S.C. 1823(c)(4).
6 12 CFR 360.9. See 73 FR 41180 (July 17, 2008).
7 12 CFR 360.9(b)(1). 8 See 12 CFR 330.7.
identify deposit owners and the right
and capacity in which deposits are
owned.4 In addition, the FDIC operates
under a mandate to implement the
resolution of a failed IDI at the least
possible cost to the Deposit Insurance
Fund.5 Requiring institutions with two
million or more deposit accounts to
maintain complete and accurate data
regarding deposit ownership and to
have IT systems that can be used by the
FDIC to calculate deposit insurance
coverage in the event of failure will
enable the prompt payment of deposit
insurance and preserve the FDIC’s
ability to implement the least costly
resolution of such an institution.
III. Current Regulatory Approach
Although the statutory requirement
that the FDIC pay insurance ‘‘as soon as
possible’’ does not require the FDIC to
pay insurance within a specific time
period, the FDIC strives to pay
insurance promptly. Indeed, the FDIC
strives to make most insured deposits
available to depositors by the next
business day after a bank fails. The FDIC
believes that prompt payment of deposit
insurance is essential for several
reasons. First, prompt payment of
deposit insurance maintains public
confidence in the deposit insurance
system as well as in the banking system.
Second, depositors must have prompt
access to their insured funds in order to
meet their financial needs and
obligations. Third, a delay in the
payment of deposit insurance—
especially in the case of the failure of
one of the largest insured depository
institutions—could have systemic
consequences. Fourth, a delay could
reduce the franchise value of the failed
bank and thus increase the cost to the
Deposit Insurance Fund. Fifth, prompt
payment would reduce the likelihood
that disruptions in the check clearing
cycle or to direct debit arrangements
would occur during the resolution
process.
The FDIC took an initial step toward
ensuring that prompt deposit insurance
determinations could be made at large
insured depository institutions through
the issuance in July 2008 of § 360.9 of
the FDIC’s regulations.6 Section 360.9
applies to IDIs with at least $2 billion
in domestic deposits and at least
250,000 deposit accounts or $20 billion
in total assets.7 Section 360.9 requires
these institutions to be able to provide
the FDIC with standard deposit account
information that can be used in the
event of the institution’s failure. The
appendices to part 360 prescribe the
structure for the data files that those
institutions must provide to the FDIC.
However, they are permitted to populate
the data fields by using only preexisting
data elements. If the institution does not
maintain the information to complete a
particular data field, then a null value
can be used in that field. As a result of
this discretionary approach, these
institutions’ standard data files are
frequently incomplete. Section 360.9
also requires these institutions to
maintain the technological capability to
automatically place and release holds
on deposit accounts if an insurance
determination could not be made by the
FDIC by the next business day after
failure. While § 360.9 would assist the
FDIC in fulfilling its legal mandates
regarding the resolution of failed
institutions subject to that rule, the
FDIC believes that if a large institution
were to fail with little prior warning,
additional measures would be needed to
ensure the prompt and accurate
payment of deposit insurance to all
depositors.
IV. Need for Further Rulemaking
While the FDIC is authorized to rely
upon the account records of a failed IDI
to identify owners and ownership rights
and capacities, in the FDIC’s experience
it is not unusual for a failed bank’s
records to be ambiguous or incomplete.
For example, the FDIC might discover
multiple accounts under one name but
at different addresses or under different
names but at the same address. The
problem of accurately identifying the
owners of deposits is exacerbated when
an account at a failed bank has been
opened through a deposit broker or
other agent or custodian and neither the
name nor the address of the owner
appears in the failed bank’s records.
Often in such cases, the only party
identified in the records is the agent or
custodian. (In the case of accounts held
by agents or custodians, the FDIC
provides ‘‘pass-through’’ insurance
coverage, meaning that the coverage
‘‘passes through’’ the agent or custodian
to each of the actual owners.8) Trust
accounts may also present challenges to
an accurate determination of deposit
insurance coverage, even when the
owner of a particular account is clearly
disclosed in the failed bank’s account
records. The identities of the
beneficiaries might not be contained in
the bank’s records or electronically
stored in a structured way using
standardized formatting. A further
complication is that bank records on
trust accounts are often in paper form or
electronically scanned images that
require a time-consuming manual
review.
Under each of these circumstances, in
order to ensure the accurate payment of
deposit insurance, the FDIC may need to
delay the payment of insured amounts
to depositors while it manually reviews
files and obtains additional information
as to the actual owners or beneficiaries
and their respective interests. Such
delays in the insurance determination
process could increase the likelihood of
disruptions to an assuming institution’s
or an FDIC-managed bridge bank’s back
office functions, such as the check
clearing cycle and direct debit
arrangements.
While these challenges to accurately
determining and promptly paying
deposit insurance may be present at any
size of failed institution, they become
increasingly formidable as the size and
complexity of the institution increases.
Larger institutions are generally more
complex, have more deposit accounts,
greater geographic dispersion, multiple
deposit systems, and more issues with
data accuracy and completeness. These
factors, which all contribute to the
difficulty of making a prompt deposit
insurance determination, have become
more pronounced over time and can be
attributed largely to consolidation in the
banking industry. From 2004 to 2014,
the largest number of deposit accounts
held at a single IDI increased 119
percent, and the deposit accounts at the
ten banks having the most deposit
accounts increased 106 percent. As a
result of this concentration, the largest
banks have become even more complex
than before, with greater potential for
significant IT systems disparities, as
well as data accuracy and completeness
problems. The largest IDIs which grew
through acquisition have inherited the
legacy deposit account systems of the
acquired banks. Those systems might
have missing and inaccurate deposit
account information; the acquired
records might not be automated or
compatible with the acquired
institution’s deposit systems—resulting
in multiple deposit platforms.
Although the largest institutions are
still able to conduct their banking
operations without expending the
resources necessary to integrate these
inherited systems or update the
acquired deposit account files, the state
of their deposit systems would
complicate and prolong the deposit
insurance determination process in the
event of failure. Because delays in
deposit insurance determinations could
lead to bank runs or other systemic
problems, the FDIC believes that
VerDate Sep<11>2014 20:50 Feb 25, 2016 Jkt 238001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 E:\FR\FM\26FEP3.SGM 26FEP3
mstockstill on DSK4VPTVN1PROD with PROPOSALS3