Notice of the FDIC's Response to Exception Requests Pursuant to the Recordkeeping for Timely Deposit Insurance Determination Rule, 9070-9071 [2021-02781]

Download as PDF 9070 Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Notices khammond on DSKJM1Z7X2PROD with NOTICES annually data regarding the number of and amount of deposits held in the internal accounts covered by this exception; provide a final copy of the documentation that describes the processes put in place to obtain beneficial ownership information necessary to make an insurance determination for the subject accounts as quickly as possible; confirm that the covered institution currently has the capability to restrict access to any or all of the subject accounts if required; make reasonable efforts, in the ordinary course of upgrading its information technology systems, to implement an information technology solution that would permit a deposit insurance determination for the subject accounts within 24 hours; and immediately bring to the FDIC’s attention any change of circumstances or conditions. IV. A Limited Number of Deposit Accounts for Which the Covered Institution’s Trust Department Acts in an Agency or Fiduciary Capacity The FDIC granted time-limited exception relief from the information technology requirements set forth in § 370.3, general recordkeeping requirements set forth in § 370.4(a), and alternative recordkeeping requirements set forth in § 370.4(b) of the rule for up to 18 months from its compliance date for a limited number of deposit accounts for which its trust department acts in an agency or fiduciary capacity. The covered institution’s trust department 2 provides fiduciary and agency services to corporations, retirement plans, and individuals. These services include safeguarding assets, making investment decisions, or facilitating clients’ complex business transactions. In performing such services, the trust department opens deposit accounts that hold funds from uninvested cash, sweeps, or other transactions on behalf of its customers. The account records for the subject accounts, which the trust department maintains on a separate system of record, reflect that funds are held by the covered institution’s trust department as an agent or fiduciary for its clients. The covered institution must perform system enhancements to assign an ownership, right and capacity code to the subject accounts and up the trust department’s systems of record in order to calculate deposit insurance. The covered institution represented that it 2 The covered institution’s trust department is a separate department that segregates its client data from other parts of the Bank, uses a separate client accounting system of record, observes trust department rules that do not apply to banks, and follows other distinct processes. VerDate Sep<11>2014 16:39 Feb 10, 2021 Jkt 253001 must review account records to assign an ownership, right and capacity code to the subject accounts; input missing information or data into the trust department’s systems of record; enhance information technology system logic; develop new account opening procedures at account onboarding; and if necessary, amend trust agreements and provide notices to third-party recordkeepers for accounts that qualify for alternative recordkeeping treatment with transactional features.3 In connection with the FDIC’s grant of relief, the covered institution will ensure that, in the event of its failure, holds can be placed on all deposit accounts subject to this time-limited exception relief until sufficient information is obtained to enable calculation of deposit insurance coverage. As conditions of relief, the covered institution must submit a status report to part370@fdic.gov at the midpoint of the exception relief period and immediately bring to the FDIC’s attention any change of circumstances or conditions. Federal Deposit Insurance Corporation. Dated at Washington, DC, on February 5, 2021. James P. Sheesley, Assistant Executive Secretary. [FR Doc. 2021–02782 Filed 2–10–21; 8:45 am] BILLING CODE 6714–01–P FEDERAL DEPOSIT INSURANCE CORPORATION Notice of the FDIC’s Response to Exception Requests Pursuant to the Recordkeeping for Timely Deposit Insurance Determination Rule Federal Deposit Insurance Corporation (FDIC). ACTION: Notice of the FDIC’s response to exception requests pursuant to the Recordkeeping for Timely Deposit Insurance Determination rule. AGENCY: In accordance with its rule regarding recordkeeping for timely deposit insurance determination, the FDIC is providing notice that it has granted time-limited exception relief to covered institutions until March 31, 2022, from information technology system requirements and recordkeeping requirements for principal and interest payments held in mortgage servicing accounts for which the covered institutions act as servicers or subservicers. The recommended relief will SUMMARY: 3 The requirements of § 370.4(b)(2)(ii) require the Bank obtain grantor unique identification information for accounts with transactional features. PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 provide the covered institutions additional time to remediate their servicing platforms and internal processing capabilities pending further direction from the FDIC. DATES: The FDIC’s grant of exception relief was effective as of February 4, 2021. FOR FURTHER INFORMATION CONTACT: Benjamin Schneider, Section Chief, Division of Complex Institution Supervision and Resolution; beschneider@fdic.gov; 917–320–2534. SUPPLEMENTARY INFORMATION: The FDIC granted time-limited exception relief to multiple covered institutions and pursuant to the FDIC’s rule entitled ‘‘Recordkeeping for Timely Deposit Insurance Determination,’’ codified at 12 CFR part 370 (part 370).1 Part 370 generally requires covered institutions to implement the information technology system and recordkeeping capabilities needed to quickly calculate the amount of deposit insurance coverage available for each deposit account in the event of failure. Pursuant to § 370.8(b)(1), one or more covered institutions may submit a request in the form of a letter to the FDIC for an exception from one or more of the requirements of part 370 if circumstances exist that would make it impracticable or overly burdensome to meet those requirements. Pursuant to § 370.8(b)(3), a covered institution may rely upon another covered institution’s exception request which the FDIC has previously granted by notifying the FDIC that it will invoke relief from certain part 370 requirements and demonstrating that the covered institution has substantially similar facts and circumstances to those of the covered institution that has already received the FDIC’s approval. The notification letter must also include the information required under § 370.8(b)(1) and cite the applicable notice published pursuant to § 370.8(b)(2). Unless informed otherwise by the FDIC within 120 days after the FDIC’s receipt of a complete notification for exception, the exception will be deemed granted subject to the same conditions set forth in the FDIC’s published notice. This grant of relief will be subject to ongoing FDIC review, analysis, and verification during the FDIC’s routine part 370 compliance tests. The FDIC presumes each covered institution is meeting all the requirements set forth in the Rule unless relief has otherwise been granted. This grant of relief may be rescinded or modified upon: discovery of misrepresentation; material change of 1 12 E:\FR\FM\11FEN1.SGM CFR part 370. 11FEN1 9071 Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Notices circumstances or conditions related to the subject accounts; or failure to satisfy conditions applicable to each. The following exception was granted by the FDIC as of February 4, 2021. I. Mortgage Servicing Accounts for Which the Covered Institution’s System of Record Cannot Calculate Principal and Interest at an Account Level at a Given Point in Time The FDIC granted time-limited exception relief to covered institutions up to March 31, 2022, from the information technology system requirements of 12 CFR 370.3 and the recordkeeping requirements of 12 CFR 370.4 for principal and interest payments held in mortgage servicing accounts for which the covered institutions act as servicers or subservicers. The recommended relief will provide the covered institutions additional time to remediate their servicing platforms and internal processing capabilities pending further direction from the FDIC. Pursuant to 12 CFR 330.7(d), mortgage principal and interest payments are insured for the cumulative balance paid into the account by the mortgagors, up to the limit of the standard maximum deposit insurance amount per mortgagor. If a covered institution does not maintain deposit records that enable it to calculate deposit insurance, the covered institution must maintain, at a minimum, the following in its deposit account records: (i) The unique identifier of the account holder; and (ii) the corresponding ‘‘pending reason’’ code listed in pending file format set forth in Appendix B to Part 370. The covered institutions service the mortgage loans using platforms hosted by third party vendors. Principal and interest payments from mortgagors are placed into the mortgage servicing accounts with the funds held in custody for the investors that own the underlying mortgages. Because the loans are tracked and managed as a group by pool, the servicing platforms do not have a mechanism to allocate the mortgage servicing accounts balances to specific mortgagors. As a result, the covered institutions do not have a process to input mortgagor principal and interest data into their information technology systems to calculate deposit insurance coverage for the mortgage servicing accounts. Remediation efforts are underway and include the development of a business requirements document, system updates, implementation, and testing. However, a number of the covered institutions have asked the FDIC for additional clarification of the part 370 recordkeeping rule with respect to the mortgage servicing accounts to determine how to produce borrower account level principal and interest data on a date of failure. Given the complexities of payments to investors under the agreements with the covered institutions, additional information from the FDIC is needed to finalize programming logic and various business requirements documents between the Banks and their service providers. The FDIC’s grant of relief is subject to the condition that each covered institution must submit within 60 days, upon receipt of additional information from the FDIC with respect to the part 370 processing for the mortgage servicing account ownership right and capacity code, a status report setting forth the project plan and timeline for integrating the mortgage servicing account ownership right and capacity code processing capabilities into the covered institution’s information technology system. The FDIC reserves the right to rescind or modify the grant of relief upon any material change of circumstances or conditions related to the accounts subject to this request. Federal Deposit Insurance Corporation. Dated at Washington, DC, on February 5, 2021. James P. Sheesley, Assistant Executive Secretary. [FR Doc. 2021–02781 Filed 2–10–21; 8:45 am] BILLING CODE 6714–01–P FEDERAL DEPOSIT INSURANCE CORPORATION Notice of Termination of Receiverships The Federal Deposit Insurance Corporation (FDIC or Receiver), as Receiver for each of the following insured depository institutions, was charged with the duty of winding up the affairs of the former institutions and liquidating all related assets. The Receiver has fulfilled its obligations and made all dividend distributions required by law. NOTICE OF TERMINATION OF RECEIVERSHIPS Fund khammond on DSKJM1Z7X2PROD with NOTICES 10152 10245 10277 10280 10502 ............. ............. ............. ............. ............. Receivership name City State The Buckhead Community Bank ....................... Sun West Bank .................................................. Palos Bank And Trust Company ....................... Imperial Savings & Loan Association ................ Valley Bank ........................................................ Atlanta ................................................................ Las Vegas .......................................................... Palos Heights ..................................................... Martinsville ......................................................... Moline ................................................................. GA .......... NV .......... IL ............ VA .......... IL ............ The Receiver has further irrevocably authorized and appointed FDICCorporate as its attorney-in-fact to execute and file any and all documents that may be required to be executed by the Receiver which FDIC-Corporate, in its sole discretion, deems necessary, including but not limited to releases, discharges, satisfactions, endorsements, assignments, and deeds. Effective on the termination dates listed above, the Receiverships have been terminated, the Receiver has been discharged, and the VerDate Sep<11>2014 16:39 Feb 10, 2021 Jkt 253001 Receiverships have ceased to exist as legal entities. (Authority: 12 U.S.C. 1819) Federal Deposit Insurance Corporation. Dated at Washington, DC, on February 5, 2021. James P. Sheesley, Assistant Executive Secretary. [FR Doc. 2021–02783 Filed 2–10–21; 8:45 am] BILLING CODE 6714–01–P PO 00000 Food and Drug Administration [Docket No. FDA–2021–N–0173] Vaccines and Related Biological Products Advisory Committee; Notice of Meeting; Establishment of a Public Docket; Request for Comments Food and Drug Administration, HHS. Fmt 4703 Sfmt 4703 02/01/2021 02/01/2021 02/01/2021 02/01/2021 02/01/2021 DEPARTMENT OF HEALTH AND HUMAN SERVICES AGENCY: Frm 00028 Termination date E:\FR\FM\11FEN1.SGM 11FEN1

Agencies

[Federal Register Volume 86, Number 27 (Thursday, February 11, 2021)]
[Notices]
[Pages 9070-9071]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02781]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Notice of the FDIC's Response to Exception Requests Pursuant to 
the Recordkeeping for Timely Deposit Insurance Determination Rule

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice of the FDIC's response to exception requests pursuant to 
the Recordkeeping for Timely Deposit Insurance Determination rule.

-----------------------------------------------------------------------

SUMMARY: In accordance with its rule regarding recordkeeping for timely 
deposit insurance determination, the FDIC is providing notice that it 
has granted time-limited exception relief to covered institutions until 
March 31, 2022, from information technology system requirements and 
recordkeeping requirements for principal and interest payments held in 
mortgage servicing accounts for which the covered institutions act as 
servicers or sub-servicers. The recommended relief will provide the 
covered institutions additional time to remediate their servicing 
platforms and internal processing capabilities pending further 
direction from the FDIC.

DATES: The FDIC's grant of exception relief was effective as of 
February 4, 2021.

FOR FURTHER INFORMATION CONTACT: Benjamin Schneider, Section Chief, 
Division of Complex Institution Supervision and Resolution; 
[email protected]; 917-320-2534.

SUPPLEMENTARY INFORMATION: The FDIC granted time-limited exception 
relief to multiple covered institutions and pursuant to the FDIC's rule 
entitled ``Recordkeeping for Timely Deposit Insurance Determination,'' 
codified at 12 CFR part 370 (part 370).\1\ Part 370 generally requires 
covered institutions to implement the information technology system and 
recordkeeping capabilities needed to quickly calculate the amount of 
deposit insurance coverage available for each deposit account in the 
event of failure. Pursuant to Sec.  370.8(b)(1), one or more covered 
institutions may submit a request in the form of a letter to the FDIC 
for an exception from one or more of the requirements of part 370 if 
circumstances exist that would make it impracticable or overly 
burdensome to meet those requirements. Pursuant to Sec.  370.8(b)(3), a 
covered institution may rely upon another covered institution's 
exception request which the FDIC has previously granted by notifying 
the FDIC that it will invoke relief from certain part 370 requirements 
and demonstrating that the covered institution has substantially 
similar facts and circumstances to those of the covered institution 
that has already received the FDIC's approval. The notification letter 
must also include the information required under Sec.  370.8(b)(1) and 
cite the applicable notice published pursuant to Sec.  370.8(b)(2). 
Unless informed otherwise by the FDIC within 120 days after the FDIC's 
receipt of a complete notification for exception, the exception will be 
deemed granted subject to the same conditions set forth in the FDIC's 
published notice.
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    \1\ 12 CFR part 370.
---------------------------------------------------------------------------

    This grant of relief will be subject to ongoing FDIC review, 
analysis, and verification during the FDIC's routine part 370 
compliance tests. The FDIC presumes each covered institution is meeting 
all the requirements set forth in the Rule unless relief has otherwise 
been granted. This grant of relief may be rescinded or modified upon: 
discovery of misrepresentation; material change of

[[Page 9071]]

circumstances or conditions related to the subject accounts; or failure 
to satisfy conditions applicable to each. The following exception was 
granted by the FDIC as of February 4, 2021.

I. Mortgage Servicing Accounts for Which the Covered Institution's 
System of Record Cannot Calculate Principal and Interest at an Account 
Level at a Given Point in Time

    The FDIC granted time-limited exception relief to covered 
institutions up to March 31, 2022, from the information technology 
system requirements of 12 CFR 370.3 and the recordkeeping requirements 
of 12 CFR 370.4 for principal and interest payments held in mortgage 
servicing accounts for which the covered institutions act as servicers 
or sub-servicers. The recommended relief will provide the covered 
institutions additional time to remediate their servicing platforms and 
internal processing capabilities pending further direction from the 
FDIC.
    Pursuant to 12 CFR 330.7(d), mortgage principal and interest 
payments are insured for the cumulative balance paid into the account 
by the mortgagors, up to the limit of the standard maximum deposit 
insurance amount per mortgagor. If a covered institution does not 
maintain deposit records that enable it to calculate deposit insurance, 
the covered institution must maintain, at a minimum, the following in 
its deposit account records: (i) The unique identifier of the account 
holder; and (ii) the corresponding ``pending reason'' code listed in 
pending file format set forth in Appendix B to Part 370.
    The covered institutions service the mortgage loans using platforms 
hosted by third party vendors. Principal and interest payments from 
mortgagors are placed into the mortgage servicing accounts with the 
funds held in custody for the investors that own the underlying 
mortgages. Because the loans are tracked and managed as a group by 
pool, the servicing platforms do not have a mechanism to allocate the 
mortgage servicing accounts balances to specific mortgagors. As a 
result, the covered institutions do not have a process to input 
mortgagor principal and interest data into their information technology 
systems to calculate deposit insurance coverage for the mortgage 
servicing accounts.
    Remediation efforts are underway and include the development of a 
business requirements document, system updates, implementation, and 
testing. However, a number of the covered institutions have asked the 
FDIC for additional clarification of the part 370 recordkeeping rule 
with respect to the mortgage servicing accounts to determine how to 
produce borrower account level principal and interest data on a date of 
failure. Given the complexities of payments to investors under the 
agreements with the covered institutions, additional information from 
the FDIC is needed to finalize programming logic and various business 
requirements documents between the Banks and their service providers.
    The FDIC's grant of relief is subject to the condition that each 
covered institution must submit within 60 days, upon receipt of 
additional information from the FDIC with respect to the part 370 
processing for the mortgage servicing account ownership right and 
capacity code, a status report setting forth the project plan and 
timeline for integrating the mortgage servicing account ownership right 
and capacity code processing capabilities into the covered 
institution's information technology system.
    The FDIC reserves the right to rescind or modify the grant of 
relief upon any material change of circumstances or conditions related 
to the accounts subject to this request.

Federal Deposit Insurance Corporation.

    Dated at Washington, DC, on February 5, 2021.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2021-02781 Filed 2-10-21; 8:45 am]
BILLING CODE 6714-01-P
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