Joint Ownership Deposit Accounts, 13143-13148 [2019-06534]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 84, Number 65 (Thursday, April 4, 2019)]
[Proposed Rules]
[Pages 13143-13148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06534]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / 
Proposed Rules

[[Page 13143]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 330

RIN 3064-AF04


Joint Ownership Deposit Accounts

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is seeking 
comment on a proposed rule that would amend the regulation governing 
one of the requirements for an account to be separately insured as a 
joint account. Specifically, the proposed rule would provide an 
alternative method to satisfy the ``signature card'' requirement. Under 
the proposal, the ``signature card'' requirement could be satisfied by 
information contained in the deposit account records of the insured 
depository institution establishing co-ownership of the deposit 
account, such as evidence that the institution has issued a mechanism 
for accessing the account to each co-owner or evidence of usage of the 
deposit account by each co-owner.

DATES: Comments will be accepted until May 6, 2019.

ADDRESSES: You may submit comments on the notice of proposed rulemaking 
using any of the following methods:
     Agency Website: https://www.fdic.gov/regulations/laws/federal. Follow the instructions for submitting comments on the agency 
website.
     Email: [email protected]. Include RIN 3064-AF04 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. Include RIN 3064-AF04 on the subject line of the 
letter.
     Hand Delivery/Courier: 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. Include RIN 
3064-AF04 on the subject line of the letter.
     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: James Watts, Counsel, Legal Division, 
(202) 898-6678, [email protected]; Teresa Franks, Associate Director, 
Division of Resolutions and Receiverships, (571) 858-8226, 
[email protected]; Martin Becker, Chief, Deposit Insurance, Division of 
Depositor and Consumer Protection, (202) 898-7207, [email protected].

SUPPLEMENTARY INFORMATION:

Policy Objectives

    The FDIC is proposing to amend its regulation governing the 
requirements for a deposit account to be insured as a joint account, 12 
CFR 330.9, and specifically, the requirement that each co-owner of a 
joint account has personally signed a deposit account signature card. 
The FDIC periodically receives inquiries regarding this requirement. 
Those inquiries have increased following the issuance of a rule 
(Recordkeeping Rule) \1\ that requires certain large insured depository 
institutions (covered institutions) to configure their information 
technology systems to be capable of calculating insurance coverage for 
deposit accounts in the event of the institution's failure. The 
Recordkeeping Rule has introduced an element of pre-judgment involving 
identification of account categories and satisfaction of recordkeeping 
requirements for the institutions subject to that Rule.\2\ In 
particular, for purposes of that Rule, covered institutions are 
required to review their records and update missing and erroneous 
deposit account information (Legacy Data Cleanup).\3\ As part of the 
Legacy Data Cleanup, covered institutions must obtain signature cards 
for owners of accounts with multiple co-owners that are missing one or 
more required signature cards (affected joint accounts). Staff at the 
FDIC has engaged in discussions with these covered institutions as part 
of the implementation process, and these discussions have brought to 
light certain issues concerning the application of the signature card 
requirement, leading the FDIC to reconsider the methods by which joint 
ownership may be established for purposes of deposit insurance.
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    \1\ See Recordkeeping for Timely Deposit Insurance 
Determination, 81 FR 87734 (Dec. 5, 2016); 12 CFR part 370.
    \2\ The Recordkeeping Rule generally applies to IDIs that have 2 
million or more deposit accounts. 12 CFR 370.2(c).
    \3\ Insured depository institutions that are not subject to the 
Recordkeeping Rule are not required to perform Legacy Data Cleanup, 
but may choose to do so to provide added certainty regarding deposit 
insurance coverage to their depositors.
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    The proposed rule is intended to reduce the regulatory burden 
associated with obtaining deposit account signature cards for all 
insured depository institutions (IDIs). For covered institutions (i.e., 
IDIs subject to the Recordkeeping Rule) discussed above, the proposed 
rule also would reduce the burden of obtaining signature cards for 
owners of affected joint accounts. The proposed rule is intended to 
facilitate the prompt payment of deposit insurance in the event of an 
IDI's failure by providing alternative methods that the FDIC could use 
to determine the owners of joint accounts, consistent with its 
statutory authority. These changes would promote confidence in FDIC-
insured deposits. Finally, the proposal embodies a forward-looking 
approach that would permit the use of new and innovative technologies 
and processes to meet the FDIC's policy objectives.

Background: Current Regulatory Approach

    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).\4\ Under the FDI Act, the FDIC is responsible 
for paying deposit insurance in the event of an IDI's failure up to the 
standard maximum deposit insurance amount, which is currently set at 
$250,000.\5\ The statute provides that deposits maintained by each 
depositor in the same capacity and the same right at the same IDI 
generally must be aggregated and insured up to the standard maximum 
deposit insurance amount.\6\ Because the statute does not define 
``capacity'' or ``right,'' the FDIC has implemented these terms by 
issuing

[[Page 13144]]

regulations recognizing particular categories of accounts, such as 
single ownership accounts and joint ownership accounts.\7\ If a deposit 
meets the requirements for a particular category, the deposit is 
insured up to the $250,000 limit separately from deposits held by the 
depositor in a different category at the same IDI. For example, 
deposits in the single ownership category will be separately insured 
from deposits in the joint ownership category held by the same 
depositor at the same IDI.
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    \4\ 12 U.S.C. 1819(Tenth); 1820(g).
    \5\ 12 U.S.C. 1821(a)(1).
    \6\ 12 U.S.C. 1821(a)(1)(B), (C).
    \7\ See 12 CFR part 330.
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    Section 330.9 of the FDIC's regulations governs insurance coverage 
for joint ownership accounts. Joint ownership accounts include deposit 
accounts held pursuant to various forms of co-ownership under state 
law. For example, joint tenants could each hold an equal, undivided 
interest in a deposit account. Section 330.9 provides that only 
``qualifying joint accounts'' (whether owned as joint tenants with the 
right of survivorship, as tenants in common, or as tenants by the 
entirety) are insured separately from individually-owned deposit 
accounts maintained by the co-owners.\8\ ``Qualifying joint accounts'' 
generally must satisfy three requirements: (1) All co-owners of the 
funds in the account are ``natural persons,'' as defined in section 
330.1(l) of the regulations; (2) each co-owner has personally signed a 
deposit account signature card; and (3) each co-owner possesses 
withdrawal rights on the same basis.\9\ If a joint deposit account is 
not a qualifying joint account, each co-owner's actual ownership 
interest in the account is aggregated with other single ownership 
accounts of such individual or other accounts of such entity.\10\ This 
may result in some uninsured deposits if a depositor's single ownership 
accounts at the same IDI, including deposits in any non-qualifying 
joint accounts, exceed $250,000.
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    \8\ 12 CFR 330.9(a).
    \9\ 12 CFR 330.9(c)(1). The signature card requirement does not 
apply to certificates of deposit, deposits evidenced by negotiable 
instruments, or accounts maintained by an agent, nominee, guardian, 
or conservator on behalf of two or more persons. 12 CFR 330.9(c)(2).
    \10\ 12 CFR 330.9(d).
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    The requirement that each co-owner of a joint account has 
personally signed a deposit account signature card (signature card 
requirement) in order for the account to be insured as a joint account 
has been included in the regulation governing insurance coverage since 
1967.\11\ This requirement was intended to address practices such as 
the addition of nominal co-owners to an account solely to increase 
deposit insurance coverage.\12\ The FDIC has periodically considered 
whether the signature card requirement should be eliminated, but 
retained the requirement, concluding that signature cards are reliable 
indicators of deposit ownership.\13\ The FDIC continues to view the 
signature card requirement as important to ensuring consistency with 
the FDI Act, which expressly limits the amount of deposit insurance 
coverage available to each depositor at a particular IDI based on the 
right and capacity in which funds are held.
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    \11\ See 32 FR 10408, 10409 (July 14, 1967) (``A joint deposit 
account shall be deemed to exist, for purposes of insurance of 
accounts, only if each co-owner has personally executed a deposit 
account signature card and possesses withdrawal rights.'')
    \12\ The FDIC stated that its purpose was to ``carry out the 
concept of limited insurance coverage intended by Federal deposit 
insurance,'' and it interpreted the FDI Act to ``limit the various 
devices commonly used to increase such coverage beyond that meant to 
be provided by law.'' 32 FR 10408 (July 14, 1967).
    \13\ See, e.g., 55 FR 20111, 20113 (May 15, 1990).
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    Neither the FDI Act nor the FDIC's regulations define the term 
``signature card.'' FDIC staff has taken the position that section 
330.9 does not require any particular format for a deposit account 
signature card. Therefore, staff has previously concluded that IDIs may 
satisfy the requirement through various forms of documentation used in 
their account opening processes. For example, staff has concluded that 
a deposit account agreement signed by each of an account's co-owners 
would satisfy the signature card requirement. Published guidance also 
states that electronic signatures satisfy the requirement.\14\
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    \14\ See FDIC Financial Institution Employee's Guide to Deposit 
Insurance, 2016 ed., at 34.
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Description of the Proposed Rule

    The FDIC is proposing to amend section 330.9 to provide an 
alternative method to satisfy the signature card requirement. The 
proposed rule would allow the signature card requirement to be 
satisfied by information contained in the deposit account records of 
the IDI establishing co-ownership of the deposit account, such as 
evidence that the institution has issued a mechanism for accessing the 
account to each co-owner or evidence of usage of the deposit account by 
each co-owner. For example, under this proposal, the requirement could 
be satisfied by evidence that an IDI has issued a debit card to each 
co-owner of the account or evidence that each co-owner of the account 
has transacted using the deposit account. These examples, however, are 
not intended to define the only forms of evidence of co-ownership that 
could satisfy the signature card requirement.
    The proposed rule only would affect a requirement in the FDIC's 
regulations that must be satisfied for a deposit account to be 
separately insured as a joint account; it would not affect any other 
legal requirements applicable to IDIs. IDIs may, for legal or other 
reasons, find it appropriate or necessary to continue collecting 
customers' signatures.
    The proposed rule also would not affect the general provisions 
contained in the FDIC's deposit insurance regulations regarding 
recognition of deposit ownership.\15\ These general rules concerning 
recognition of deposit ownership would continue to apply to all deposit 
accounts, including joint accounts.
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    \15\ See 12 CFR 330.5.
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    The proposed rule would not introduce new requirements with respect 
to the requirements for an account to be insured as a joint account, 
and would not reduce or affect insurance coverage for any account for 
which the existing joint account requirements are satisfied. The 
proposed rule simply would provide an alternative method to satisfy the 
existing signature card requirement. If each co-owner of a joint 
account signs, or has previously signed, a deposit account signature 
card in accordance with the existing requirement, the alternative 
method provided by the proposed rule would be unnecessary. Assuming 
that the remaining joint account requirements are satisfied--that is, 
all co-owners of the account are natural persons and possess equal 
withdrawal rights--the account would be insured as a joint account.
    The FDIC is also proposing a conforming amendment to section 330.9 
consistent with the Electronic Signatures in Global and National 
Commerce Act (E-Sign Act).\16\ Specifically, the FDIC proposes to amend 
the regulation to state expressly that the signature card requirement 
may be satisfied electronically. The current requirement that each 
depositor has personally signed a deposit account signature card would 
be amended to require that each depositor has personally signed, which 
may include signing electronically, a deposit account signature card. 
This amendment would clarify for IDIs and depositors the manner in 
which the signature card requirement may be satisfied, and is 
consistent with published guidance and

[[Page 13145]]

staff interpretations of section 330.9.\17\ It would not substantively 
alter the regulatory requirements for joint accounts.
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    \16\ Public Law 106-229; 15 U.S.C. 7001(a).
    \17\ See FDIC Financial Institution Employee's Guide to Deposit 
Insurance, 2016 ed., at 34.
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Expected Effects

    The proposed rule would apply to all IDIs and is expected to 
broaden the types of documentation that would be acceptable to satisfy 
the signature card requirement at the time of an IDI's failure. In this 
way, for all IDIs, the proposed rule is intended to reduce the 
regulatory burden associated with obtaining deposit account signature 
cards. It would not impose any new recordkeeping requirements for joint 
accounts.
    The proposed rule would, however, have a more immediate regulatory 
burden relief impact on the covered institutions subject to the 
Recordkeeping Rule. For purposes of that Rule, as discussed above, 
covered institutions are currently engaged in Legacy Data Cleanup. As 
part of the Legacy Data Cleanup, covered institutions must obtain 
signature cards for owners of affected joint accounts. By providing an 
alternative method to satisfy the signature card requirement that 
relies on other information in the institution's deposit account 
records, the proposed rule should reduce the Legacy Data Cleanup burden 
associated with obtaining missing signature cards for covered 
institutions subject to the Recordkeeping Rule.
    To estimate the burden reduction of the proposed rule relating to 
Legacy Data Cleanup, the FDIC estimates: (1) The cost of obtaining 
signature cards for an affected joint account; and (2) the total number 
of affected joint accounts held at covered institutions subject to the 
Recordkeeping Rule. The product of these two figures is the estimated 
cost burden of collecting missing signatures. The proposed rule would 
reduce that burden by allowing covered institutions subject to the 
Recordkeeping Rule to satisfy the signature card requirement using 
other information in their deposit account records establishing co-
ownership of the deposit account.
    The FDIC's estimate of the cost of obtaining missing signature 
cards for an affected joint account is based on cost estimates used in 
connection with the Recordkeeping Rule. Legacy Data Cleanup costs for 
the Recordkeeping Rule were estimated at $226 million to address 
approximately 21 million deposit accounts held in covered 
institutions.18 19 This represents an average of 
approximately $11 per account. Although accounts may require Legacy 
Data Cleanup for a variety of reasons, the Recordkeeping Rule estimates 
that ``more than 90 percent of the legacy data cleanup costs are 
associated with manually collecting account information from customers 
and entering it into the covered institution's systems.'' \20\ The 
process of obtaining a missing signature fits this description, and the 
FDIC believes that $11 per account is a reasonable estimate of the 
average cost of obtaining signatures for an affected joint account.
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    \18\ See 81 FR 87742-43. The analysis for the Recordkeeping Rule 
estimated that approximately 5 percent of the approximately 416 
million deposit accounts held by covered institutions would require 
manual data cleanup.
    \19\ The $226 million estimate includes both costs incurred by 
the institutions and costs incurred by depositors to update missing 
account information. See 81 FR 87747.
    \20\ 81 FR 87742.
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    The cost estimates used in the Recordkeeping Rule are based on data 
from the institutions covered by the Recordkeeping Rule at the time 
that Rule was issued. As of December 31, 2018, 36 covered institutions 
subject to the Recordkeeping Rule held approximately 418 million 
deposit accounts.\21\ Assuming that 25 percent of those accounts are 
joint,\22\ and assuming that 5 percent of joint accounts are missing at 
least one required signature,\23\ there are a total of approximately 
5.2 (= 418 * 25% * 5%) million affected joint accounts. At an estimated 
cost of $11 per affected joint account, the FDIC estimates a total cost 
burden of $57 million for covered institutions subject to the 
Recordkeeping Rule to update deposit account records related to 
affected joint accounts. The proposed rule would reduce this burden, 
resulting in an estimated cost savings for these institutions of $57 
million.
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    \21\ FDIC Consolidated Reports of Condition and Income, as of 
December 31, 2018.
    \22\ According to recent Census estimates, approximately 60 
percent of Americans live with a spouse or partner (U.S. Census 
Bureau, Current Population Survey, Annual Social and Economic 
Supplement, 1967 to 2018). In addition, according to a recent 
banking survey, 58 to 76 percent of Americans in relationships have 
at least one joint account (TD Love & Money, Report of Findings, 
Customer Insights, July 2017). Based on these figures, the FDIC 
estimates that between 35 and 46 percent of Americans hold a joint 
account. Assuming that joint accounts have two owners on average, 
the FDIC estimates that between 21 and 30 percent of deposit 
accounts are joint. (For example, if 35 percent of Americans share a 
joint account with another American and the remaining 65 percent 
each has a personal account, then (35/2)/(35/2 + 65) = 21 percent of 
accounts are joint). For this analysis, the FDIC assumes the middle 
value of 25% as an estimate of the percent of accounts that are 
joint.
    \23\ Following the analysis in the Recordkeeping Rule, the FDIC 
assumes that 5% of accounts will require data cleanup.
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    IDIs that are not subject to the Recordkeeping Rule are not 
required to perform Legacy Data Cleanup, but some may, nonetheless, 
choose to do so to provide added certainty regarding deposit insurance 
coverage to their depositors. As of December 31, 2018, there were 
approximately 162 million deposit accounts held at 5,379 IDIs not 
covered by the Recordkeeping Rule. Given the same assumptions outlined 
in the previous paragraph, the FDIC estimates there are a total of 2.0 
(= 162 * 25% * 5%) million affected joint accounts held at these IDIs. 
The proposed rule would alleviate some of the burden of addressing 
these affected joint accounts, resulting in estimated cost savings of 
up to $22 ($11 * 2.0) million.
    The total estimated burden reduction for the industry associated 
with updating deposit account records for joint accounts is estimated 
to be between $57 and $79 million, depending on the number of IDIs not 
subject to the Recordkeeping Rule that choose to update their deposit 
account records. In addition, the proposed rule could alleviate some of 
the burden of obtaining signature cards for new joint accounts at all 
IDIs. The FDIC expects this benefit to be de minimis because electronic 
signatures may be used to satisfy the signature card requirement 
pursuant to the E-Sign Act.
    The rule also provides non-quantifiable benefits to owners of joint 
accounts. By providing alternative methods that the FDIC could use to 
determine the owners of joint accounts, the proposed rule would further 
support a prompt deposit insurance determination in the event of an 
IDI's failure, alleviating delays in the recognition of account 
ownership and uncertainty regarding the extent of deposit insurance 
coverage. These benefits would promote depositor confidence in the 
nation's banking system and particularly in FDIC-insured deposits.
    The FDIC is also proposing a conforming amendment to section 330.9 
consistent with the E-Sign Act. This conforming amendment is not 
expected to result in any discernable economic effect, as current FDIC 
practice already permits IDIs to use electronic signatures. The effects 
of the conforming amendment would be limited to eliminating uncertainty 
regarding the regulation.
    The FDIC invites comments on all aspects of the information 
provided in this section.

[[Page 13146]]

Alternatives Considered

    The FDIC has considered alternatives to the proposed rule that 
could achieve its policy objectives. A few of these alternatives are 
described below.
    Alternative 1: Status Quo. The FDIC considered maintaining the 
current requirements for accounts to be insured as joint accounts. To 
address burden issues raised by covered institutions currently 
conducting Legacy Data Cleanup pursuant to the Recordkeeping Rule, the 
FDIC notes that such institutions may request relief pursuant to that 
Rule for existing accounts for which the owners seek deposit insurance 
coverage as a joint account.\24\ However, as discussed above, the 
proposed rule would reduce the burden associated with Legacy Data 
Cleanup, so the potential cost savings to covered institutions subject 
to the Recordkeeping Rule would result in a greater benefit. The 
proposed rule also may result in cost savings for IDIs that are not 
subject to the Recordkeeping Rule, but nonetheless choose to perform 
Legacy Data Cleanup.
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    \24\ See 12 CFR 370.8.
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    As a subset of Alternative 1, the FDIC considered whether covered 
institutions could simply focus on or prioritize accounts with balances 
of more than $250,000 for purposes of their Legacy Data Cleanup. This 
approach may address regulatory burden to some degree, but could also 
be interpreted as introducing a distinction between large IDIs and 
small IDIs with respect to deposit insurance coverage. Due to this 
concern, the expected benefits of this alternative are smaller than 
those of the proposed rule.
    Alternative 2: Amend Certification Requirement for Institutions 
Subject to Part 370. As discussed above, the covered institutions 
subject to the Recordkeeping Rule are required to collect missing 
signatures for joint accounts. The FDIC considered amending the 
Recordkeeping Rule's certification requirements to allow covered 
institutions to certify their compliance based on substantial or good 
faith compliance with the deposit insurance rules with respect to their 
joint deposit accounts. This would allow institutions subject to the 
Recordkeeping Rule to certify compliance with that Rule while 
continuing to address data cleanup for affected deposit accounts. 
Because institutions would still incur costs associated with obtaining 
missing signatures, however, the expected benefits of this alternative 
are smaller than the expected benefits of the proposed rule.
    Alternative 3: Eliminate Signature Card Requirement for Qualifying 
Joint Accounts. The FDIC considered amending section 330.9 to eliminate 
the signature card requirement for joint accounts. As discussed above, 
however, the FDIC continues to view the signature card requirement as 
important to ensuring consistency with the FDI Act, particularly, the 
requirement to insure depositors based on the right and capacity in 
which funds are held. The signature card requirement is intended to 
address practices such as the addition of nominal co-owners to a 
deposit account without their knowledge solely for the purpose of 
increasing deposit insurance coverage. The proposed rule is intended to 
retain consistency with the FDI Act while providing a method of 
satisfying the signature card requirement that reduces regulatory 
burden. Given the benefits of keeping the signature card requirement, 
the expected benefits of this alternative are smaller than those of the 
proposed rule.
    Alternative 4: Leverage Bank Secrecy Act/Anti-Money Laundering 
Processes. The FDIC considered amending section 330.9 to allow IDIs to 
satisfy the signature card requirement based on existing Bank Secrecy 
Act/Anti-Money Laundering (BSA/AML) processes. This could reduce 
regulatory burden by leveraging existing compliance processes. However, 
while BSA/AML processes serve a valuable purpose in identifying the 
individuals opening accounts, these processes do not address the 
purpose of the signature card requirement, which is to indicate actual 
ownership of the funds in the deposit account. This approach would 
intertwine deposit insurance coverage with a compliance regime that 
serves a different purpose. Moreover, exceptions to BSA/AML 
requirements may apply to many of the older deposit accounts for which 
signature cards are less likely to be available. Thus, it is unclear 
that compliance with BSA/AML requirements would provide additional 
assurance that a deposit account's titled co-owners actually own the 
funds in the account. In addition, this approach could allow weaknesses 
in BSA/AML compliance to affect deposit insurance coverage for the 
IDI's customers. Due to the concerns discussed above, the expected 
benefits of this alternative are smaller than those of the proposed 
rule.

Request for Comment

    The FDIC is requesting comment on all aspects of the proposed rule, 
including the alternatives presented. Comment is specifically invited 
with respect to the following questions:
     Can IDIs, including IDIs that rely on deposit account 
systems designed or maintained by third-party vendors, obtain 
information on account usage or access by the co-owners of an account?
     Would the proposed rule sufficiently address satisfaction 
of the signature card requirement through electronic methods, given the 
variety of account opening procedures used by IDIs? If not, what 
clarifications or changes are necessary?
     Is any data available concerning the cost or effort that 
might be required for IDIs to obtain deposit account signature cards 
for co-owners where a signature card is currently not available in the 
deposit account records of the IDI?
     How should the FDIC approach ensuring that a depositor 
does not use another person's personally identifiable information to 
establish a deposit account without the other person's knowledge simply 
to increase deposit insurance coverage?
     Are there any additional factors that the FDIC should 
consider in determining whether the alternatives to the proposed rule 
described above would better satisfy the agency's policy objectives of 
reducing regulatory burden and promoting the prompt payment of deposit 
insurance consistent with the FDI Act in the event of an IDI's failure?
     Are there other alternatives that the FDIC should consider 
that would better satisfy those objectives?
     Does the proposed rule minimize the potential for 
depositor confusion over the requirements for joint accounts?

Regulatory Analysis

A. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency, 
in connection with a proposed rule, to prepare and make available for 
public comment an initial regulatory flexibility analysis that 
describes the impact of a proposed rule on small entities.\25\ However, 
an initial regulatory flexibility analysis is not required if the 
agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities.\26\ The Small 
Business Administration (SBA) has defined ``small entities'' to include 
banking organizations with total assets of less than or equal to $550 
million.\27\ For the reasons described

[[Page 13147]]

below, the FDIC certifies pursuant to section 605(b) of the RFA that 
the proposed rule will not have a significant economic impact on a 
substantial number of small entities.
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    \25\ 5 U.S.C. 601 et seq.
    \26\ 5 U.S.C. 605(b).
    \27\ The SBA defines a small banking organization as having $550 
million or less in assets, where an organization's ``assets are 
determined by averaging the assets reported on its four quarterly 
financial statements for the preceding year.'' See 13 CFR 121.201 
(as amended, effective December 2, 2014). In its determination, the 
SBA ``counts the receipts, employees, or other measure of size of 
the concern whose size is at issue and all of its domestic and 
foreign affiliates.'' 13 CFR 121.103. Following these regulations, 
the FDIC uses a covered entity's affiliated and acquired assets, 
averaged over the preceding four quarters, to determine whether the 
covered entity is ``small'' for the purposes of RFA.
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    As of September 30, 2018, the FDIC insured 5,486 institutions, of 
which 4,047 are considered small entities for the purposes of RFA.\28\ 
These small IDIs hold approximately 31 million deposit accounts, with 
an average of 7,700 deposit accounts and a maximum of approximately 
143,000 deposit accounts held at a single small IDI.
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    \28\ Consolidated Reports of Condition and Income for the 
quarter ending September 30, 2018.
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    The proposed rule would amend section 330.9 to provide an 
alternative method to satisfy the signature card requirement for joint 
accounts based on information contained in the deposit account records 
of the insured depository institution establishing co-ownership of the 
deposit account. As discussed in Expected Effects section, because no 
small IDIs are covered by the Recordkeeping Rule, a small IDI would 
only experience burden relief from the proposed rule if it first chose 
to update its account records. In this case, the proposed rule is 
estimated to reduce burden in the amount of $11 per affected joint 
account. This potential burden reduction is conditional on the IDI's 
choice to update its records.
    Following the burden reduction estimation outlined in the Expected 
Effects section, the FDIC estimates the burden reduction for each of 
the 4,047 small IDIs covered by this proposed rule by multiplying the 
number of deposit accounts held at each small IDI by 25 percent to 
estimate the number of joint accounts, then by 5 percent to estimate 
the number of affected joint accounts, and finally by $11 to estimate 
the cost of addressing those affected joint accounts. The potential 
burden reduction for each institution ranges from less than a dollar to 
approximately twenty thousand dollars, with an average of approximately 
one thousand dollars per small IDI. Expressed as a proportion of 
assets, the potential burden reduction ranges from less than a 
millionth of one percent to less than two hundredths of one percent of 
total assets.
    The proposed rule would apply to all IDIs, affecting a substantial 
number of small entities. However, the economic impact on each small 
entity is insignificant, with no entity affected by more than two 
hundredths of one percent of total assets held. Accordingly, the FDIC 
certifies that the proposal will not have a significant economic impact 
on a substantial number of small entities.
    The FDIC invites comments on all aspects of the supporting 
information provided in this section, and in particular, whether the 
proposed rule would have any significant effects on small entities that 
the FDIC has not identified.

Riegle Community Development and Regulatory Improvement Act

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act (RCDRIA) requires that the Federal banking agencies, 
including the FDIC, in determining the effective date and 
administrative compliance requirements of new regulations that impose 
additional reporting, disclosure, or other requirements on insured 
depository institutions, consider, consistent with principles of safety 
and soundness and the public interest, any administrative burdens that 
such regulations would place on depository institutions, including 
small depository institutions, and customers of depository 
institutions, as well as the benefits of such regulations.\29\ Subject 
to certain exceptions, new regulations and amendments to regulations 
prescribed by a Federal banking agency which impose additional 
reporting, disclosures, or other new requirements on insured depository 
institutions shall take effect on the first day of a calendar quarter 
which begins on or after the date on which the regulations are 
published in final form.\30\
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    \29\ 12 U.S.C. 4802(a).
    \30\ 12 U.S.C. 4802(b).
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    The proposed rule would not impose additional reporting or 
disclosure requirements on insured depository institutions, including 
small depository institutions, or on the customers of depository 
institutions. It would provide an alternative method to satisfy the 
existing signature card requirement for joint deposit accounts based on 
information contained in the deposit account records of the insured 
depository institution. Accordingly, section 302 of RCDRIA does not 
apply. Nevertheless, the requirements of RCDRIA will be considered as 
part of the overall rulemaking process, and the FDIC invites comments 
that will further inform its consideration of RCDRIA.

Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA), 44 U.S.C. 3501-3521, 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 would not 
require any information collections for purposes of the PRA, and 
therefore, no submission to OMB is required.

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. 2681).

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 rulemakings published 
in the Federal Register after January 1, 2000. The FDIC invites your 
comments on how to make this proposal easier to understand. For 
example:
     Has the FDIC organized the material to suit your needs? If 
not, how could the material be better organized?
     Are the requirements in the proposed regulation clearly 
stated? If not, how could the regulation be stated more clearly?
     Does the proposed regulation contain language or jargon 
that is unclear? 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?

List of Subjects in 12 CFR Part 330

    Bank deposit insurance, Reporting and recordkeeping requirements, 
Savings associations.

Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit 
Insurance Corporation proposes to amend 12 CFR part 330 as follows:

[[Page 13148]]

PART 330--DEPOSIT INSURANCE COVERAGE

0
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(a)(Tenth), 1820(f), 1820(g), 1821(a), 1821(d), 1822(c).

0
2. Revise Sec.  330.9(c) to read as follows:


Sec.  330.9   Joint ownership accounts.

* * * * *
    (c) Qualifying joint accounts. (1) Qualification requirements. A 
joint deposit account shall be deemed to be a qualifying joint account, 
for purposes of this section, only if:
    (i) All co-owners of the funds in the account are ``natural 
persons'' (as defined in Sec.  330.1(l));
    (ii) Each co-owner has personally signed, which may include signing 
electronically, a deposit account signature card; and
    (iii) Each co-owner possesses withdrawal rights on the same basis.
    (2) Limited exceptions. The signature-card requirement of paragraph 
(c)(1)(ii) of this section shall not apply to certificates of deposit, 
to any deposit obligation evidenced by a negotiable instrument, or to 
any account maintained by an agent, nominee, guardian, custodian, or 
conservator on behalf of two or more persons.
    (3) Evidence of deposit ownership. All deposit accounts that 
satisfy the criteria in paragraph (c)(1) of this section, and those 
accounts that come within the exception provided for in paragraph 
(c)(2) of this section, shall be deemed to be jointly owned provided 
that, in accordance with the provisions of Sec.  330.5(a), the FDIC 
determines that the deposit account records of the insured depository 
institution are clear and unambiguous as to the ownership of the 
accounts. If the deposit account records are ambiguous or unclear as to 
the manner in which the deposit accounts are owned, then the FDIC may, 
in its sole discretion, consider evidence other than the deposit 
account records of the insured depository institution for the purpose 
of establishing the manner in which the funds are owned. The signatures 
of two or more persons on the deposit account signature card or the 
names of two or more persons on a certificate of deposit or other 
deposit instrument shall be conclusive evidence that the account is a 
joint account (although not necessarily a qualifying joint account) 
unless the deposit records as a whole are ambiguous and some other 
evidence indicates, to the satisfaction of the FDIC, that there is a 
contrary ownership capacity.
    (4) Alternative method to satisfy signature-card requirement. The 
signature-card requirement of paragraph (c)(1)(ii) of this section also 
may be satisfied by information contained in the deposit account 
records of the insured depository institution establishing co-ownership 
of the deposit account, such as evidence that the institution has 
issued a mechanism for accessing the account to each co-owner or 
evidence of usage of the deposit account by each co-owner.
* * * * *

    By order of the Board of Directors of the Federal Deposit 
Insurance Corporation.

    Dated at Washington, DC, on March 29, 2019.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2019-06534 Filed 4-3-19; 8:45 am]
 BILLING CODE 6714-01-P