Federal Deposit Insurance Corporation February 21, 2006 – Federal Register Recent Federal Regulation Documents

Certification of Assumption of Deposits and Notification of Changes of Insured Status
Document Number: 06-1568
Type: Rule
Date: 2006-02-21
Agency: Federal Deposit Insurance Corporation, Agencies and Commissions
The FDIC is adopting a final rule which clarifies and simplifies the procedures to be used when all of the deposit liabilities of an insured depository institution have been assumed by another insured depository institution or institutions. The final regulation would modify the current rule's requirements by: Making clear that an insured institution is required to file a ``certification'' when all of its deposits are assumed, but no certification is required if only a portion of its deposits are assumed; and requiring that the transferring institution, or its legal successor, file the certification rather than the assuming institution. The rule also clarifies that the transferring institution's status as an insured institution automatically terminates upon the FDIC's receipt of an accurate certification stating that: All of its deposits have been assumed by an insured depository institution or institutions, and the legal authority of the transferring institution to accept deposits has been terminated contemporaneously with the deposit assumption. In such a situation, and in a situation in which the FDIC has been appointed receiver of an insured institution, little practical purpose would be served by an order terminating deposit insurance, and the final rule provides that no such order will be issued in such situations. Finally, the rule would provide more specificity concerning how notice is given to depositors when an insured depository institution voluntarily terminates its insured status without the assumption of all of its deposits by an insured institution. In sum, the revisions would make the insurance termination process somewhat easier for insured depository institutions, and somewhat more efficient for the FDIC.