Federal Deposit Insurance Corporation 2008 – Federal Register Recent Federal Regulation Documents

The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS) (collectively, the Agencies) are amending their regulatory capital rules to permit banks, bank holding companies, and savings associations (collectively, banking organizations) to reduce the amount of goodwill that a banking organization must deduct from tier 1 capital by the amount of any deferred tax liability associated with that goodwill. For a banking organization that elects to apply this final rule, the amount of goodwill the banking organization must deduct from tier 1 capital would reflect the maximum exposure to loss in the event that such goodwill is impaired or derecognized for financial reporting purposes.

The OCC, the Board, the FDIC, and the OTS (collectively, the ``agencies'') are amending their Community Reinvestment Act (CRA) regulations to adjust the asset-size thresholds used to define ``small bank'' or ``small savings association'' and ``intermediate small bank'' or ``intermediate small savings association.'' As required by the CRA regulations, the adjustment to the threshold amount is based on the annual percentage change in the Consumer Price Index.

The FDIC is adopting a final rule establishing recordkeeping requirements for qualified financial contracts (QFCs) held by insured depository institutions in a troubled condition as defined in this rule. The appendix to the rule requires an institution in a troubled condition, upon written notification by the FDIC, to produce immediately at the close of processing of the institution's business day, for a period provided in the notification, the electronic files for certain position level and counterparty level data; electronic or written lists of QFC counterparty and portfolio location identifiers, certain affiliates of the institution and the institution's counterparties to QFC transactions, contact information and organizational charts for key personnel involved in QFC activities, and contact information for vendors for such activities; and copies of key agreements and related documents for each QFC.

The Federal Civil Monetary Penalties Inflation Adjustment Act of 1990, as amended, requires all Federal agencies with statutory authority to impose civil money penalties (CMPs) to evaluate and adjust those CMPs every four years. The Federal Deposit Insurance Corporation (FDIC) last adjusted the maximum amounts of CMPs under its jurisdiction in 2004. The FDIC is issuing this final rule to implement the required adjustments to its CMPs, in consultation with the other Federal banking agencies and the National Credit Union Administration.

The OCC, FRB, FDIC, OTS, and NCUA (the Agencies), request comment on the proposed Interagency Appraisal and Evaluation Guidelines (proposed Guidelines). The proposed Guidelines, which would supersede the 1994 Interagency Appraisal and Evaluation Guidelines (1994 Guidelines), reflect revisions to the Uniform Standards of Professional Appraisal Practice (USPAP) and the evolution of collateral valuation practices, such as the use of automated valuation models (AVMs). The proposed Guidelines also incorporate refinements made by the Agencies to the supervision of regulated institutions' appraisal and evaluation programs since 1994 and reflect the participation of the NCUA, which was not a party to the 1994 Guidelines. The proposed Guidelines are intended to clarify the Agencies' real estate appraisal regulations and promote a safe and sound real estate collateral valuation program.

In 1996, the FDIC published General Counsel's Opinion No. 8 (``GC8''). Through that opinion, the Legal Division of the FDIC sought to clarify the meaning of the term ``deposit'' as that term relates to funds underlying stored value cards. Subsequently, the banking industry developed new types of stored value products with the result that GC8 is obsolete. For this reason, the Legal Division has decided to replace GC8. Under the new GC8, all funds underlying stored value products will be treated as ``deposits'' if they have been placed at an insured depository institution. As a result, all such funds will be subject to FDIC assessments. Also, all such funds will be insured up to the insurance limit. Whether the funds are insurable to the holders of the access mechanisms, as opposed to the distributor of the access mechanisms, will depend upon the satisfaction of the FDIC's standard requirements for obtaining ``pass-through'' insurance coverage. This treatment of the funds underlying stored value products does not differ from the treatment set forth in a proposed rule published by the FDIC in August of 2005. See 70 FR 45571 (August 8, 2005). The new GC8 will provide guidance to the public about the insurance coverage of funds underlying nontraditional access mechanisms. Also, the new GC8 will promote accuracy and consistency by insured depository institutions in reporting ``deposits'' for inclusion in an institution's assessment base.

The FDIC is issuing this Interim Rule following a determination of systemic risk pursuant to section 13(c)(4)(G) of the Federal Deposit Insurance Act. As a result of this systemic risk determination, and in an effort to avoid or mitigate serious adverse effects on economic conditions or financial stability, the FDIC is establishing the Temporary Liquidity Guarantee Program. As further described in the Interim Rule, the Temporary Liquidity Guarantee Program has two primary components: the Debt Guarantee Program, by which the FDIC will guarantee the payment of certain newly- issued senior unsecured debt, and the Transaction Account Guarantee Program, by which the FDIC will guarantee certain noninterest-bearing transaction accounts.

The FDIC invites the commenter who filed a public comment at www.regulations.gov on July 9, 2008, relating to the FDIC's Interim Final Rule and Request for Comment involving ``Financial Education Programs That Include the Provision of Bank Products and Services'' to resubmit to the FDIC his or her comment relating to this action. We are taking this action because due to a technical software error, a public comment submitted via www.regulations.gov was not transmitted to the FDIC. Therefore, the FDIC will provide this commenter with a limited opportunity to resubmit his or her comment to the FDIC on or before November 24, 2008.

The FDIC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on continuing information collections, as required by the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). Currently, the FDIC is soliciting comments concerning the following collection of information titled: Notification of Changes of Insured Status (3064-0124).

The FDIC is adopting an interim rule to amend its deposit insurance regulations to reflect Congress's recent action to temporarily increase the standard deposit insurance amount from $100,000 to $250,000 and to simplify the deposit insurance rules for funds maintained in mortgage servicing accounts. The FDIC's main goals in revising its insurance rule on mortgage servicing accounts are to simplify a rule that has become increasingly complex in application due to developments in securitizations and to provide additional certainty with respect to the deposit insurance coverage of these accounts at a time of turmoil in the housing and financial markets. The FDIC believes this regulatory change will help improve public confidence in the banking system.

In accordance with requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the FDIC hereby gives notice that it plans to submit to the Office of Management and Budget (OMB) a request for OMB review and renewal the collections of information described below:

The FDIC is adopting an interim rule to simplify and modernize its deposit insurance rules for revocable trust accounts. The FDIC's main goal in implementing these revisions is to make the rules easier to understand and apply, without decreasing coverage currently available for revocable trust account owners. The FDIC believes that the interim rule will result in faster deposit insurance determinations after depository institution closings and will help improve public confidence in the banking system. The interim rule eliminates the concept of qualifying beneficiaries. Also, for account owners with revocable trust accounts totaling no more than $500,000, coverage will be determined without regard to the beneficial interest of each beneficiary in the trust. Under the new rules, a trust account owner with up to five different beneficiaries named in all his or her revocable trust accounts at one FDIC-insured institution will be insured up to $100,000 per beneficiary. Revocable trust account owners with more than $500,000 and more than five different beneficiaries named in the trust(s) will be insured for the greater of either: $500,000 or the aggregate amount of all the beneficiaries' interests in the trust(s), limited to $100,000 per beneficiary.

The Federal Deposit Insurance Corporation (FDIC) is amending its regulations to permit state nonmember banks to participate or assist in certain financial education programs conducted on school premises where, in connection with the program, deposits are received, checks are paid, or money is lent, without the need to submit a branch application to, and receive prior approval from, the FDIC. However, any state nonmember bank that desires to engage in such financial education programs must satisfy certain conditions in order for the exemption to apply.

On September 16, 2008, the Federal Deposit Insurance Corporation (FDIC) Board of Directors (Board) adopted revised Guidelines for Appeals of Material Supervisory Determinations (Guidelines). The revisions to the Guidelines were adopted to better align the FDIC's Supervisory Appeals Review Committee (SARC) process with the material supervisory determinations appeals procedures at the other Federal banking agencies. The amendments modify the supervisory determinations eligible for appeal to eliminate the ability of an FDIC- supervised institution to file an appeal with the SARC with respect to determinations or the facts and circumstances underlying a recommended or pending formal enforcement-related action or decision, including the initiation of an investigation and the referral to the Attorney General or a notice to the Secretary of Housing and Urban Development for apparent violations of the Equal Credit Opportunity Act or the Fair Housing Act. The amendments also include limited technical amendments. The revised Guidelines are effective upon adoption.