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Federal Register / Vol. 71, No.

239 / Wednesday, December 13, 2006 / Proposed Rules 74857

reevaluation of the Waste Confidence Dated at Rockville, Maryland, this 2nd day federal/propose.html. Follow the
findings if either of two criteria were of December 2006. instructions for submitting comments.
met: (1) When the impending repository For the Nuclear Regulatory Commission. • E-mail:
development and regulatory activities Luis A. Reyes, • Mail: Robert E. Feldman, Executive
run their course; or (2) If significant and Executive Director of Operations. Secretary, Attention: Comments/Legal
pertinent unexpected events occur, [FR Doc. E6–21151 Filed 12–12–06; 8:45 am] ESS, Federal Deposit Insurance
raising substantial doubt about the BILLING CODE 7590–01–P Corporation, 550 17th Street, NW.,
continuing validity of the Waste Washington, DC 20429.
Confidence findings (December 6, 1991; • Hand Delivered/Courier: The guard
64 FR 68007). Because activities FEDERAL DEPOSIT INSURANCE station at the rear of the 550 17th Street
involving the high-level waste Building (located on F Street), on
repository have not run their course, a business days between 7 a.m. and 5 p.m.
petitioner would have to demonstrate 12 CFR Chapter III • Public Inspection: Comments may
that ‘‘significant and pertinent be inspected and photocopied in the
unexpected events’’ have occurred that RIN 3064–AC98 FDIC Public Information Center, Room
have raised ‘‘substantial doubt about the E–1002, 3501 North Fairfax Drive,
continuing validity of the Waste Large-Bank Deposit Insurance
Determination Modernization Proposal Arlington, Virginia, between 9 a.m. and
Confidence findings’’ for the 5 p.m. on business days.
Commission to reevaluate its AGENCY: Federal Deposit Insurance • Internet Posting: Comments
conclusions. Neither PRM–54–02 or Corporation (‘‘FDIC’’). received will be posted without change
PRM–54–03 has provided any ACTION: Advance notice of proposed to
demonstration warranting reopening of rulemaking (‘‘ANPR’’). laws/federal/propose.html, including
this decision. Finally, delays of the any personal information provided.
waste depository at Yucca Mountain are SUMMARY: The FDIC is seeking comment
not relevant to these petitions because on whether and how the largest insured
James Marino, Project Manager, Division
waste is governed by separate NRC depository institutions should be
of Resolutions and Receiverships, (202)
regulations and outside the scope of part required to modify their deposit account
898–7151 or, Joseph
54, and the Waste Confidence Decision systems to speed depositor access to
A. DiNuzzo, Counsel, Legal Division,
determined that spent fuel can be safely funds in the event of a failure. Today,
(202) 898–7349 or or
stored onsite for 100 years. The insured institutions do not track the
Catherine Ribnick, Counsel, Legal
petitioners have not shown that waste insured status of their depositors yet the
Division, (202) 898–3728 or
would be better regulated under part 54. FDIC must make deposit insurance
For spent fuel issues, see previous
coverage determinations in the event of
discussion. failure. The current process might result SUPPLEMENTARY INFORMATION:
With respect to the comment in unacceptable delays if used for an
regarding the National Academy of I. Background
FDIC-insured institution with a large
Sciences Report, the NRC notes that this volume of deposit accounts. Such When handling a depository
is a classified report on spent fuel delays would have an impact on institution failure the FDIC is required
transportation security that was depositors’ ability to access their funds to structure the least costly of all
delivered to the House and Senate and are likely to result in a resolution possible resolution transactions, except
Committees on Appropriations in July (of the failed institution) significantly in the event of systemic risk.2 In
2004, and that an unclassified summary more costly to the Deposit Insurance addition, the FDIC is required to pay
was published in March 2005. The NRC Fund. As currently contemplated, the insured deposits ‘‘as soon as possible’’
sent a report to Congress on March 14, options discussed in the ANPR would after an institution fails 3 and places a
2005, describing the specific actions the apply only to the 152 insured high priority on providing access to
NRC took to respond to the Academy’s depository institutions with more than insured deposits promptly.4 In view of
recommendations. The Academy’s 250,000 deposit accounts and more than the significant industry consolidation in
study is one of many instruments that $2 billion in domestic deposits, as well recent years, the FDIC is exploring new
supplements NRC’s understanding of as seven additional institutions with methods to modernize the process to
the safety of the interim storage of spent total assets over $20 billion, less than determine the insurance status of each
fuel. 250,000 deposit accounts and at least $2 depositor in the event of a depository
billion in domestic deposits. In institution failure. The FDIC’s current
Reasons for Denial
December 2005 the FDIC issued a prior procedures to determine deposit
The NRC is denying the petitions for advance notice of proposed rulemaking
rulemaking (PRM–54–02 and PRM–54– on this subject (‘‘2005 ANPR’’).1 This
2 Section 13(c)(4)(A)(ii) of the Federal Deposit

03) because they raise issues that the ANPR is a follow-up to that issuance.
Insurance Act (‘‘FDI Act’’) 12 U.S.C.
Commission already considered at 1823(c)(4)(A)(ii) and section 13(c)(4)(G)(i) of the FDI
The FDIC is seeking comment on all Act, 12 U.S.C. 1823(c)(4)(G)(i).
length in developing the license renewal aspects of the ANPR. 3 Section 11(f)(1) of the FDI, 12 U.S.C. 1821(f)(1).
rule (December 13, 1991; 56 FR 64943), 4 Doing so enables the FDIC to: (1) Maintain
DATES: Comments must be submitted on
that are managed by the ongoing public confidence in the banking industry and the
or before March 13, 2007.
regulatory process or under other FDIC; (2) provide the best possible service to
regulations, or that are beyond the ADDRESSES: You may submit comments insured depositors by minimizing uncertainty about
Commission’s regulatory authority. by any of the following methods: their status and avoiding costly disruptions, such as

The petitioners did not present any • Agency Web site: http:// returned checks, that may limit their ability to meet
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financial obligations; (3) mitigate the spillover

new information that would contradict effects of a failure, such as risks to the payments
positions taken by the Commission system, problems stemming from depositor
1 ‘‘Large-Bank Deposit Insurance Determination illiquidity and a substantial reduction in credit
when the regulation was established or Modernization Proposal, Advance Notice of availability; and (4) retain, where feasible, the
demonstrate that sufficient reason exists Proposed Rulemaking,’’ 70 FR 73652, December 13, franchise value of the failed institution (and thus
to modify the current regulations. 2005. minimize the FDIC’s resolution costs).

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74858 Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules

insurance coverage may result in to estimate the total amount of insured the depositor data received from a failed
unacceptable delays if used for an FDIC- funds in the institution. The current institution.
insured institution with a large volume FDIC deposit insurance determination • FDIC holds/debits based on
of deposit accounts. In developing a process has several steps. Each step insurance determination results. Funds
new system to determine insurance varies in time and complexity, deemed insured are passed in full to the
coverage in a large-bank failure, the depending on the institution’s acquiring institution. Accounts
FDIC’s goals are to minimize disruption characteristics (primarily the number of definitely uninsured are debited for the
to depositors and communities and to deposit accounts and type of deposit uninsured amount and a receivership
minimize costs to the Deposit Insurance account system). The following is a
certificate (‘‘RC’’) is issued for the
Fund. summary of the usual steps involved in
The ANPR’s focus is on FDIC-insured debited amount.6 Holds are placed on
the insurance coverage determination
institutions with complex deposit accounts deemed potentially uninsured
process where deposits are passed to an
systems. These include those for amounts over the insurance limit,
acquiring institution:
institutions with the largest volume of and the account owner is contacted. If
• Closing out the day’s business. In
deposit accounts, currently expected to additional information is required from
the event of failure, it is the FDIC’s
include 152 insured institutions with the depositor, a meeting is scheduled.
practice to close out the insured
over 250,000 deposit accounts and total These meetings afford the opportunity
institution’s daily business prior to
domestic deposits of at least $2 billion, to collect information necessary to
obtaining the account balances upon
as well as seven additional institutions which the insurance determination is finalize the insurance determination on
with total assets over $20 billion, with based. Generally, this process is the possibly uninsured depositors. The
less than 250,000 deposit accounts and completed according to the bank’s typical institution resolved by the FDIC
total domestic deposits of at least $2 existing procedures. All of the day’s does not have the capability to post a
billion (‘‘Covered Institutions’’). One of check processing and deposit large volume of holds electronically by
the assumptions underlying this ANPR transactions are completed, and end-of- batch. However, this is an essential
is that no institution would be required day account balances are determined. requirement for an effective depositor
to submit detailed customer deposit This process can require varying lengths claims process for larger institutions.
data to the FDIC unless the institution of time, across Covered Institutions. For
was in danger of failing. Least-Cost Resolution Requirements
larger institutions this process can run
Insurance Coverage and Insurance into the early morning hours. As noted above, when handling a
Coverage Determination Procedures • Obtain deposit data. A data file is depository institution failure the FDIC is
The basic FDIC insurance limit is obtained from the institution or its required by statute to structure the least
$100,000 per depositor, per insured servicer. Obtaining usable data from the costly of all possible resolution
institution.5 Deposits maintained by a institution or its servicer frequently is a transactions, except in the event of
person or entity in different ownership time-consuming process. The FDIC will systemic risk. Even with systemic-risk
rights and capacities at one institution provide the institution or its servicer failures, the FDIC must conserve costs.
are separately insured up to the with a standard data request. The Since the introduction of the systemic
insurance limit. All types of deposits standard data request requires the risk exception in 1991, no exceptions to
(for example, checking accounts, institution to provide approximately 45 the least-cost requirement have been
savings accounts, certificates of deposit, data fields for each deposit account made. The FDIC’s least-cost requirement
interest checks and cashier’s checks) along with electronic copies of trial was intended to reduce resolution cost
held by a depositor in the same balances and deposit application and instill a greater degree of market
ownership category at an institution are reconciliations. FDIC technical staff discipline by requiring losses to be
added together before the FDIC applies works with the insured institution until borne by uninsured depositors and non-
the insurance limit for that category. the standard data set requirements are deposit creditors.
The FDIC generally relies upon the met and the files provided the FDIC can When an insured institution fails the
deposit account records of a failed be processed properly. Generally, the FDIC may pay insured depositors up to
institution in making deposit insurance FDIC has at least 30 days advance the insurance limit (a ‘‘pay-off’’) or the
determination. warning to plan and prepare for a FDIC may sell the failed institution to
To achieve accurate deposit insurance failure. Data are requested in advance to another FDIC-insured institution (a
determinations, the FDIC uses a test delivery capabilities, prove the ‘‘purchase and assumption
specialized system to analyze depositor balancing and reconciliation processes transaction’’). Another option is to
data and apply insurance rules. As part and make certain that all required data establish a bridge bank or a
of its normal practice, the FDIC obtains fields have been included. conservatorship and transfer deposits to
depositor data only at the time an • Process deposit data. Data are that institution.7 Preservation of the
insured institution is in danger of received and validated (including deposit franchise of a failed institution
failing. These data are received in the reconciliation to supporting subsidiary
weeks or months prior to failure, and systems). Using its Receivership 6 The receivership certificate entitles the
the FDIC uses them to determine the Liability System (‘‘RLS’’), the FDIC depositor to a pro rata distribution of the
insurance status of their depositors and determines which accounts are fully receivership proceeds with respect to their claim.
insured, which are definitely uninsured 7 A bridge bank is a national bank chartered for
5 The coverage for Individual Retirement
and which are possibly uninsured the purpose of temporarily carrying on the banking
Accounts and other specific types of retirement operations of a failed institution until a permanent
accounts was recently increased to $250,000. 71 FR
(pending the collection of further solution can be crafted. See 12 U.S.C. 1821(n). The
information). The RLS automatically
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14629, March 23, 2006. The FDIC’s rules and FDIC’s bridge bank authority applies only to the
regulations for deposit insurance coverage groups accounts based on the ownership failure of a bank. In the event of the failure of an
described the categories of ownership rights and category and the name(s), address, and insured savings association the FDIC could seek a
capacities eligible for separate insurance coverage. federal thrift charter that would be operated as a
FDIC refers to these as ‘‘ownership categories.’’
tax identification number for each conservatorship. As with a bridge bank, the new
There is a description of the primary ownership account. This process is part of the thrift institution would be a temporary mechanism
categories in Appendix A. insurance determination performed on to facilitate a permanent resolution structure.

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Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules 74859

is an important facet of minimizing large institutions that have recently The single most important facet
resolution costs. engaged in merger activity. Implications determining the complexity of the
Complexities Caused by Industry of industry consolidation over the past claims process for depositors of a failed
Consolidation ten years can be seen in Table 1. If such institution is the number of deposit
trends continue, deposits will become accounts. Other factors are important as
Historically, most insured institution even more concentrated in the well, including the volume of daily
closures occur on a Friday. In almost all foreseeable future.
cases, the FDIC has made funds transactions, the amount of uninsured
available to the majority of insured funds, the number of separate computer
TABLE 1.—TOP TEN INSTITUTIONS, BY systems or ‘‘platforms’’ on which
depositors by the next business day,
usually the Monday following a Friday NUMBER OF DEPOSIT ACCOUNTS deposit accounts are maintained, the
closing. All of the insured institution [In millions] speed at which the institution’s deposit
failures of the past ten years have been operations must be resumed following
of modest size, the largest being Rank 1996 2001 2006 failure and the potential spillover
Superior Bank, FSB with total deposits implications of the failure. The FDIC’s
at the time of closure of about $2 billion 1 ........................ 11.3 33.7 50.6 analysis of these factors as applied to
2 ........................ 10.4 12.3 30.4
and roughly 90,000 deposit accounts. larger banks indicates that the industry
Industry consolidation raises practical 3 ........................ 5.0 11.6 22.7
can be divided into two segments as
concerns about the FDIC’s current 4 ........................ 4.1 10.1 18.7
5 ........................ 4.0 9.1 17.7
shown in Table 2.
business model for handling institution
failures. In most instances, larger 6 ........................ 3.8 8.3 13.9
institutions are considerably more 7 ........................ 3.7 8.0 9.0
complex, have more deposit accounts, 8 ........................ 3.7 6.5 8.8
9 ........................ 3.6 6.2 6.2
are more geographically dispersed and
10 ...................... 3.2 5.6 5.9
have more diverse systems and data-
integration issues than small Total ........... 52.7 111.5 183.9
institutions. This is especially true of
Segment Definition Number % of Total % of Total

Covered ........... Total number of deposit accounts over 250,000 and total do- 159 1.8 $4,445 69.1
mestic deposits over $2 billion or total assets over $20 bil-
lion regardless of the number of deposit accounts and total
domestic deposits over $2 billion.
Non-Covered ... All insured institutions not covered .......................................... 8,619 98.2 1,992 30.9

Total ......... ................................................................................................... 8,778 100.0 6,437 100.0

Note: Data are as of June 30, 2006.

Large institutions typically have more because liquidity insolvency oftentimes would receive access to their funds in
accounts, more complex deposit is difficult to anticipate, and because the event of failure.10 All of the options
systems and require a rapid resumption liquidity insolvency can occur in a very entailed modifications to the deposit
of deposit operations in the event of compressed period of time. account systems of Covered Institutions
failure to protect the institution’s Covered Institutions present unique to facilitate the insurance determination
franchise value. With Covered challenges in the event of failure. For process. Option 1 was to require the
Institutions the speed of the claims the smaller, less-complex Covered institution to install on its deposit
process could be greatly enhanced by Institutions these challenges may be system a capability that, in the event of
the FDIC obtaining a timely data only modest; for the larger, more failure, would place a temporary hold
download and by improving the complex members of the group they are on a portion of the balances of large
institution’s capability to automatically more severe. As noted, the FDIC is deposit accounts. The percentage hold
post holds or debit uninsured funds. concerned about both the size and amount would be determined by the
Covered Institutions are more likely to complexity of the deposit operations of FDIC at the time of failure, depending
fail due to liquidity reasons prior to Covered Institutions and the necessary mainly on estimated losses to uninsured
becoming critically undercapitalized speed of the claims process to make depositors.11 Such provisional holds
under prompt corrective action.8 Most funds available quickly to depositors
likely, this will be a more rapid and less and maximize the institution’s franchise 10 In the 2005 ANPR Covered Institutions were
orderly event. Institutions more (or re-sale) value. defined to include all insured institutions with total
susceptible to a liquidity insolvency number of deposit accounts over 250,000 and total
pose greater problems for the FDIC. II. The 2005 ANPR domestic deposits over $2 billion. A full description
of the three options is provided in the 2005 ANPR.
Such institutions have a less predictable The 2005 ANPR 9 requested comment
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11 Uninsured depositors are entitled to a pro rata

failure date. The failure could occur on on three options for enhancing the distribution of the receivership proceeds with
any day of the week, and pre-failure speed at which depositors of the larger, respect to their claim. The FDIC—at its discretion—
access to the institution may be limited more complex insured institutions may immediately distribute receivership proceeds
in the form of advance dividends at the time the
bridge bank is opened. Advance dividends are
8 12 U.S.C. 1831o. 9 70 FR 73652 (Dec. 13, 2005). Continued

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74860 Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules

would be placed immediately prior to four percent) indicated opposition to the Tiered Approach
the day the institution reopens for 2005 ANPR, citing high costs and
business (generally expected to be the regulatory burden. The aforementioned Based on the comments received on
next business day) as a bridge bank joint comment letter from three trade the 2005 ANPR and additional analysis,
(discussed above). The institution also associations ‘‘urge[d] the Corporation to the FDIC has refined its thinking in
would need to be able to automatically reconsider its program to implement the terms of how to approach the issues
remove these holds and replace them 2005 ANPR.’’ 14 A complete summary of discussed in the 2005 ANPR. The FDIC
with the results of the deposit insurance the comments received on the 2005 is putting forward for comment an
determination when they become ANPR is provided in Appendix B. approach under which each insured
available. The insurance determination depository institution would fall into
III. The Revised ANPR one of three categories: Tier 1 Covered
would be facilitated by certain depositor
data (such as the depositor’s name, Process Overview Institutions, Tier 2 Covered Institutions
address, and tax identification number) and Non-Covered Institutions. Tier 1
Under the process discussed in the Institutions would include the largest,
maintained by the institution in a
ANPR, in the event of failure a Covered most complex institutions among those
standard format. The data would
Institution would complete its nightly having at least 250,000 deposit accounts
include a unique identifier for each
processing cycle according to the and more than $2 billion in domestic
depositor and the insurance ownership
institution’s normal practices. After deposits. Tier 2 Institutions would
category of each account.
Option 2 was similar to Option 1 completion of this nightly processing include institutions of lesser complexity
except that the standard data set would cycle provisional holds would be placed among those having at least 250,000
have included only information that on large deposit accounts through the deposit accounts and more than $2
institutions currently possessed. The institution’s deposit systems as billion in domestic deposits, and those
option would not have required specified by the FDIC. The placement of with at least $20 billion in domestic
institutions to create a unique identifier provisional holds will allow the assets and $2 billion in domestic
for each depositor or to classify each opening of a bridge bank the day deposits not falling under the definition
account by ownership category. following failure, yet guard against the of a Tier 1 Institution. Non-Covered
Option 3 was to require the largest ten loss of uninsured deposit funds subject
Institutions would be any insured
or twenty insured institutions (in terms to loss. A standard set of data files
depository institution not meeting the
of the number of deposit accounts) to reconciled to the institution’s
definition of a Tier 1 or 2 Covered
know the insurance status of their supporting subsidiary systems will then
Institution. Non-Covered Institutions
depositors and to be able to deduct be provided to the FDIC, to be used as
would be exempt from the requirements
expected losses to uninsured depositors the basis for making deposit insurance
discussed in the ANPR.15
in the event of failure. determinations. The results of the
insurance determination will be Compared to the 2005 ANPR, the
Comments on the 2005 ANPR returned to the bridge bank, likely definition of a Covered Institution has
The FDIC received 28 comments on within several days. At this point the been expanded to include insured
the 2005 ANPR.12 Six were from trade provisional holds will be removed en institutions with at least $20 billion in
organizations, fourteen from large masse to be replaced with the results of domestic assets and $2 billion in
institutions, four from community banks the deposit insurance determination. domestic deposits, regardless of the
and four from others. Most commenters The FDIC requests comment on all number of accounts. While some such
expressed an appreciation of the aspects of this contemplated approach, institutions may have far fewer than
objectives set forth in the 2005 ANPR. including cost/benefit issues and 250,000 deposit accounts, the FDIC is
The letter submitted jointly by alternative approaches that would allow concerned that—for such institutions—
American Bankers Association, the FDIC to accomplish its objectives of a Friday closure date cannot be
America’s Community Bankers and The affording a timely deposit insurance expected, a bridge institution will need
Financial Services Roundtable determination and a prompt release of to be established quickly and that a high
‘‘recognize[d] that the Federal deposit funds to depositors. percentage of deposit accounts may
insurance system’s viability depends on involve uninsured funds. The FDIC is
Continuation of Business Operations
the principle that no financial interested in comments on the
institution is either too big or too small For the purposes of implementing the challenges presented by such
to fail. The development of prudent possible requirements explained in the institutions in the event of failure
systems to prepare for and respond to ANPR, Covered Institutions should compared to other institutions with a
the failure of any size institution is an assume that their deposit operations comparable number of deposit accounts.
important component of the would continue post failure in a bridge Should the definition of Covered
Corporation’s receivership functions.’’ 13 bank or a federally chartered mutual Institutions be expanded to include
Nevertheless, the majority of association. In the event of failure the institutions with fewer than 250,000
commenters generally opposed bank would complete the nightly deposit accounts?
implementation of any of the options deposit processing cycle according to
offered in the 2005 ANPR. Eighteen of the institution’s normal practices. For 15 As part of its claims-process modernization

the twenty-eight comment letters (sixty- insurance determination purposes, the effort, the FDIC is streamlining the business
FDIC would use the deposit account processes it uses to facilitate a deposit insurance
determination. This involves replacing the current
based on the expected recovery to uninsured balance generated at the end of the Receivership Liability System (noted above) with a
depositors. nightly processing cycle. This is the new system incorporating more advanced
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12 The 2005 ANPR comment letters are available

account balance against which technologies to enhance automation. These changes
at: will improve the FDIC’s ability to process
provisional holds would be calculated.
efficiently a large number of accounts and provide
13 Comment letter provided by American Bankers timely customer support to uninsured depositors.
Association, America’s Community Bankers and 14 American Bankers Association, America’s Enhancements to the FDIC’s claims system would
The Financial Services Roundtable dated March 13, Community Bankers and The Financial Services be facilitated by a closer interaction with a Covered
2006 in response to the 2005 ANPR, page 3. Roundtable, page 4. Institution’s deposit systems.

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Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules 74861

Requirements for Different Tiers/ identify account owners (as opposed to most institutions. Given the historical
Explanation of Requirements trustees, managers, beneficiaries, etc.) loss experience for large institutions and
As explained more fully below, under from source files being supplied to the their general liability structure, the FDIC
the approach being put forward for FDIC for insurance determination expects that the values of Y and Z
comment, a Tier 1 Covered Institution purposes? Does this differ by types of would be less than 15 percent.
would be required to have in place accounts; for example, checking The FDIC requests comments on all
systems that could: (1) Provide a unique accounts versus (brokered) CDs? aspects of these possible requirements
depositor identification (‘‘ID’’) for each • Could Covered Institutions concerning provisional holds on
depositor; (2) implement automated uniquely identify depositors within a deposits. In particular:
single legacy data system? Is there an • What more would Covered
provisional holds against deposit
accompanying Customer Information Institutions need to know to design and
accounts; (3) supply a standard data
File (‘‘CIF’’) available for each legacy implement such a system?
framework (where the form and content • What would be the overall cost to
of this data structure will be developed data system? Could the Covered
Institutions provide instructions or rules a Covered Institution for developing the
in cooperation with insured capability to automatically post
institutions); (4) remove provisional to assist the FDIC to integrate depositor
records across these legacy data provisional holds?
holds; (5) supply an agreed upon • The deposit systems of many
standardized data structure to compute sources?
Covered Institutions use software
a trial balance; and (6) post holds and (b) Provisional Holds Against Deposit purchased from a small group of
debits in batch mode resulting from the Accounts vendors. To what extent would vendor-
deposit insurance determination results. Under the suggested approach, Tier 1 based software changes help mitigate
A Tier 2 Covered Institution would be and 2 Covered Institutions would be the overall implementation costs of this
subject to the same requirements as a required to have in place an automated program?
Tier 1 Covered Institution except it process for implementing a one-time • Some Covered Institutions use a
would not have to provide a unique FDIC provisional hold immediately servicer to process deposit accounts,
depositor ID for each depositor.16 Each following the completion of the nightly and some Covered Institutions share the
of these requirements is described deposit processing cycle following a same deposit servicer. To what extent
below, along with specific questions on failure. The contemplated provisional would implementation changes made by
which the FDIC requests comment. hold algorithm contains variables that the servicer mitigate the costs of this
(a) Unique Depositor ID would be supplied by the FDIC only on program?
the day of failure. Provisional holds • A provisional hold could
Tier 1 Covered Institutions would be potentially trigger complications in the
required to uniquely identify each would be applied to individual accounts
(commonly owned deposits are not back office of the bridge bank due to an
depositor. The FDIC requests comments increase in returned items. This might
on all aspects of this possible aggregated). Provisional holds would
vary by individual account balance and be mitigated if a large percentage of a
requirement. In particular:
type. Under one approach: (1) Deposit depositor’s checking account balance is
• To what extent can Covered
accounts with balances below $X made available immediately. If, for
Institutions uniquely identify depositors
using current systems and procedures? dollars would not be subject to a example, fifteen percent holds were
• What would be the best method(s) provisional hold; (2) deposit accounts placed on transaction accounts with
to use for depositor identification? with balances between $X and $100,000 balances over $50,000, how significant
Should the FDIC specify the format to would be subject to a provisional hold would the impact be for the back office
be used for depositor identification, or of Y percent; and (3) deposit accounts of the bridge bank? Would overdraft
should this be left to the Covered with balances above $100,000 would be facilities already in place with
Institution to determine? subject to a provisional hold of Z depositors mitigate this potential
• How expensive would it be for percent. impact? If the impact is expected to be
Covered Institutions to supply a unique The FDIC would supply the values X, significant, how could it be mitigated?
identifier for each depositor? Is this Y and Z to the institution on the day of Would there be any potential
something that Covered Institutions are failure. Those values could differ complications in the back office of the
considering for internal business depending on whether the account is a bridge bank due to holds placed on
purposes? If not, how do Covered demand deposit/NOW account, money MMDA, savings accounts or time
Institutions determine common market deposit/savings account or time deposits? If so, what types of
ownership for relationship management, deposit. X could be set at a higher level complications, and how could they be
cross-selling, risk management or other for DDA systems than for time deposit mitigated?
purposes? How long would it take to systems, for example. The values X, Y • The FDIC may set Y and Z to the
implement a unique depositor and Z also could differ depending on same percentage. If the FDIC required
identification process? To what extent is whether the institution categorizes the institutions to be prepared for only one
the answer to that question a function account as consumer or business. For ratio rather than two, would that reduce
of running deposit accounts on more these purposes, the account category the system development costs, the
than one platform? would be the one normally used by the reliability of the algorithm or the speed
• How reliable would the data be in institution, rather than a definition more of running the algorithm? If so, by how
identifying each depositor? To what consistent with FDIC insurance rules. much? If only one ratio were used, the
extent are Covered Institutions able to FDIC research indicates the likely value FDIC might choose to apply the ratio to
of X would fall between $30,000 and the entire balance of accounts with over
$80,000. Based on account-size $X dollars, or it might apply the ratio to
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16 Each institution in Tiers 1 and 2 would be

required to provide the FDIC with the names of the distributions provided by a sample of only the portion of the balance that
individuals responsible for the deposit data file(s), insured institutions, this potential exceeds $X. The FDIC does not
provisional holds, communications, customer
service and the removal the provisions holds and
threshold range is expected to exclude anticipate requiring institutions to be
implementation of the results of the deposit over 90 percent of deposit accounts prepared for both options. Would this
insurance determination. from the provisional hold process at choice influence the system

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development costs, the reliability of the industry input into the development of international banking facility (‘‘IBF’’)
algorithm or the speed of running the this standard data framework. Industry accounts, since they are not defined as
algorithm? If so, which choice would be participation will be important in deposits for insurance purposes. Do
better, and to what degree would it be assuring that the FDIC specifies foreign deposits reside on separate
better? standards that are adequate for making deposit systems? Would your institution
• The FDIC may choose to set the deposit insurance determinations have any problems creating a data set
same X, Y and Z for all deposit systems without being unduly burdensome to that excludes foreign deposits not
(as opposed to different thresholds or Covered Institutions. Consequently, the payable in the U.S.? If so, how might
ratios for transaction account systems, FDIC seeks comment on all aspects these problems be mitigated? Would
MMDA/Savings systems and time pertinent to the development of this your institution have problems placing
deposit systems). If the FDIC required standard. Appendix C provides a blanket freeze on all foreign deposits
institutions to be prepared for only one representative standard data elements. and IBF accounts so that the funds
set of thresholds and ratios, would that • What would be the overall cost to could not be drawn on the bridge bank?
reduce the system development costs, a Covered Institution to develop a • Deposits held by the institution’s
the reliability of the algorithm or the capability to produce a standard data subsidiaries and affiliates should be
speed of running the algorithm? If so, by structure complete with associated included in the standard data set. For
how much? linked data sources for information such deposit insurance purposes all deposits
• The FDIC may choose to set the as account ownership or other owned by the same FDIC charter,
same X, Y and Z for all account maintained information relationships whether an affiliate or subsidiary,
categories. If the FDIC required required to define a deposit account, as should be included in the data call if the
institutions to be prepared for only one well as provide a data structure to account is held at the institution. Would
set of thresholds and ratios, would that facilitate the generation of a trial your institution have any problems
reduce the system development costs, balance and reconciliations of accounts? complying with the standard data
the reliability of the algorithm or the Could a Covered Institution develop and structure described above that includes
speed of running the algorithm? If so, by deploy this standard in 18 months? the full balance of deposits held by
how much? Does the Covered Institution have a subsidiaries and affiliates? If so, how
• Where do individual retirement standard deposit account data might these problems be mitigated?
accounts (‘‘IRAs’’) reside? Are they framework that they would recommend • Would Covered Institutions have
clearly coded or otherwise identified on the FDIC adopt as a standard to support difficulty supplying complete and
bank records in a way that would allow this deposit account definition process? reliable data for any of the items listed
their ready identification? Are all IRAs • The deposit systems supporting in Appendix C? If so, which ones? Do
generally found in time deposit systems, many Covered Institutions use software problems arise because the data are
in other systems, or are they distributed purchased from a small group of incomplete (available for some accounts
across multiple systems? vendors and servicers. Could a vendor but not others) or for other reasons?
• Since the FDIC would want to or servicer develop the standard data • One of the items envisioned in the
continue operating the institution on the structure and the necessary processing standard data structure is a flag for
business day after failure, the logic to pull the data into the specified bank-owned accounts (the institution’s
provisional hold process must be standard format for multiple institutions payroll accounts, for example), but not
completed quickly. The time thresholds or does your institution have unique accounts owned by others and managed
may be challenging especially if the details that would prevent this from by the institution (trust accounts, for
institution does not fail on a Friday. Are occurring? example). These accounts are not
there ways to structure the provisional • To meet the proposed standard data deposits and thus should be excluded
hold requirements that would make it structure requirement, institutions may from the deposit insurance
easier for institutions to meet the have to link records from the CIF with determination process. How costly
associated timing requirements? For the deposit systems or provide a key for would it be for institutions to provide a
example, would it be helpful if the FDIC linking elements so data from the CIF reliable flag for these accounts or
agreed that $X would never fall below could be linked to individual account remove them from the standard data set
a predetermined amount (say $30,000 or owner records. This would be more prior to transferring it to the FDIC? If no
$40,000)? complex than a standard data structure flag were available, the FDIC might
• How long would you expect such a that only included items from the place provisional holds on these
program to run? deposit systems, but it would enable the accounts. Would such an action cause
• What problems would occur if FDIC to make timely insurance problems in the back office? If so, how
holds were placed during the first day determinations. Once the systems had serious a problem might it cause?
(that is, before the evening check- been developed and tested, how much • In the event of failure, depositor
clearing process) rather than before longer would it take for an institution to data may be transmitted to the FDIC or
opening for business on the first day? prepare a standard data structure that its designee. One method for data
included CIF and deposit system items, transfer of the deposit file(s) is via
(c) The Generation of a Standard Data secure FTP, requiring financial
compared to one that included only
Structure Reconciled to the Supporting institutions or their servicers to use VPN
deposit system items?
Subsidiary Systems • The FDIC would require to communicate with the FDIC over the
A fundamental aspect of this ANPR is transmitted deposit balances to Internet. What are the relative costs and
the development of a standard data reconcile to the actual trial balance, benefits of using a secure FTP? Are
framework which does not place an both principal and interest dollar there more effective, less costly ways of
onerous burden on Covered Institutions,
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amounts and the deposit record counts. transmitting data to the FDIC?
while ensuring that the FDIC is How does reconciliation affect • The transmission method may
provided with an optimum set of data timeliness? Can the process be depend on the number of accounts in
structures within that framework that developed in advance and automated? the transmission data sets. For some
enable a timely and accurate insurance • The standard data set should not Covered Institutions the FDIC may have
determination process. The FDIC seeks contain records for foreign deposits or to deploy hardware to the failed

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institution. How would Covered contained in such a file be readily IV—Implementation and Testing
Institution suggest this process be reformatted so that the transactions can Requirements
handled and which location would be be processed on the institution’s deposit The FDIC is considering an approach
optimum to support FDIC requirements? systems? Is there a format other than under which an insured institution
(d) Posting the Insurance Determination ASCII/EBCDIC that is easier and less meeting the definitional requirements of
Results and Removal of Provisional costly for institutions? If so, what is it? a given tier for the two quarters prior to
Holds Would it be helpful for the FDIC to the effective date of the requirements
provide institutions a sample data set discussed in the ANPR would have
The FDIC would forward insurance (for testing) during the implementation
results to be incorporated into the eighteen months to fully implement the
period? respective requirements. The FDIC asks
institution’s deposit systems as soon as
possible, perhaps as quickly as the day • In some cases, all accounts with specific comment on whether more time
following the receipt of the standard debits would also have credits. The would be needed to implement Tier 1
data set. The results would dictate FDIC anticipates that this would requirements. For example, should the
debits and holds to be placed by batch simplify the reconciliation process and implementation period be fifteen
in an automated fashion on deposit the settlement process between the months for Tier 2 Covered Institutions
accounts. The processing stream would insurance fund and the bridge bank, and eighteen months for Tier 1 Covered
be as follows: FDIC would notify since the debits relate to uninsured Institutions?
Operations/IT that results are available. balances and the credits relate to Also, under the contemplated
This notification would trigger a process advance dividends. This policy would, approach, regarding a merger of two or
whereby all provisional holds are however, increase the number of more Non-Covered Institutions resulting
removed en masse. After provisional required transactions. Is the larger in Covered Institution status, the
holds have been removed, the bridge number of transactions problematic? If requirements of the new tier would have
bank would run replacement so, what are the problems and how to be fully implemented within, for
transactions. Depending on the might they be mitigated? example, eighteen months following the
depositor’s insurance status, the completion of the merger. Would this be
• One possible way to reduce the a reasonable way to handle the
replacements could include: (1) No
number of transactions in a given situation?
replacement (that is, just release the
provisional hold); (2) a debit of the processing schedule would be to Under the contemplated approach,
account by the amount specified by the segment the process; for example, the FDIC would conduct an initial test
FDIC; (3) a debit and credit of the release provisional holds and replace at each Covered Institution sometime
account (that is, debit the uninsured them for only one system (or for after the initial implementation period
balance and credit an advance selected accounts) per night until they ends.17 Once the initial test is
dividend); and (4) placement of a FDIC are all completed. The FDIC anticipates completed successfully, the FDIC
hold that might not be the same amount that the costs associated with anticipates that it would conduct
as the provisional hold. In a few cases, segmenting this process in some way additional tests infrequently at healthy
new FDIC debits or holds may be placed would exceed the associated benefits. institutions that do not make major
on accounts that did not have a Do you believe this would be the case? changes to their deposit systems—
provisional hold. Both the removal of If not, what benefits and costs would perhaps only once every three-to-six
provisional holds and the placement of accrue for a segmented process and how years. More frequent testing may be
new FDIC transactions would have to be should it be segmented? necessary for institutions that move to
accomplished in the same nightly Debiting time deposits may be Tier 1 from Tier 2, make major
processing schedule and the institution operationally more difficult than acquisitions, experience financial
would have to be open for business as transaction or savings accounts. It might distress (even if the distress is unlikely
usual on the next business day. not be possible to debit a certificate of to result in failure) or undertake major
As to this proposed procedure, the deposit (‘‘CD’’) to reflect a loss resulting system conversions.
FDIC requests responses to these from the insurance determination To reduce the frequency of FDIC
specific questions: results. Debiting a CD may require that testing and ensure ongoing compliance,
• What would be the overall cost to the existing CD be closed and new one the FDIC might consider requiring that
a Covered Institution for developing the opened with the lesser dollar amount. Covered Institutions conduct tests in-
capability to remove provisional holds house on a regular basis (perhaps every
and automatically process account • What are the operational difficulties
year) and provide the FDIC with
debits and holds based on the insurance of requiring a cancellation of a large
evidence that the test was conducted
determination results? number of CDs? What is the best way to
and a summary of the test results. If the
• Would the en masse removal of automate this process? Are there ways FDIC chose to do this, what type of
provisional holds, coupled with the to build upon processes that are already protocols should be set? Should the
placement of FDIC debits, credits and in place for rolling over or paying out FDIC prepare a standard report format
holds during the same processing CDs? If so, how? The FDIC expects that, for the summarized test results? Would
schedule, raise operational issues? If so, in the event of a large institution failure, it be less costly for institutions to
what types of issues, and how might its new claims system will create a file submit test results to the FDIC regularly
they be mitigated? Would the system that contains the data needed by to reduce the FDIC testing frequency
development costs or operational risk be institutions to cancel an uninsured CD (say from every three years to every five-
reduced if this process were only and replace it with a smaller CD. What to-six years)? Which testing option
information should be included in that
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scheduled on a weekend? would result in a more reliable process?

• The FDIC is contemplating file? What format should it take? Would Why?
providing institutions with an ASCII/ it be helpful for the FDIC to provide
EBCDIC text file with debit, credit and institutions a sample data set (for 17 In addition to testing, the FDIC might require
hold transactions based on the testing) during the implementation that information contact points be validated (and
insurance determination. Could the data period? updated as needed) every three-to-six months.

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In addition, the FDIC would have to opened? The insurance category of each posed. In past meetings, the institutions
test certain other requirements inside account is necessary for the insurance and software vendors/servicers
the institution, including but not determination process, but is not a discussed proprietary information. Such
limited to the ability to remove requirement proposed in this ANPR. confidential information would not be
provisional holds en masse and place Should the FDIC require that Covered made public. The record of the meeting
new holds and debits using a data set Institutions determine the insurance could be prepared by the institution or
that meets the FDIC standards. The category of each new deposit account? the FDIC. Any institution or
testing of processes involving organization wishing to discuss this
VI. Request for Comments
transmittal of data to or from the FDIC proposal in more detail or influence the
would use dummy or scrambled data. The FDIC realizes that the way in which it is implemented should
To protect financial privacy, the requirements discussed in the ANPR contact James Marino, Project Manager,
FDIC’s testing process would not require could not be implemented without some Division of Resolutions and
that Covered Institutions transmit any regulatory and financial burden on the Receiverships, (202) 898–7151 or
sensitive customer data outside of the industry. The FDIC is seeking to
institution’s premises. Therefore, all minimize these costs while at the same During 2006 the FDIC met with
testing involving sensitive customer time ensuring it can effectively carry out several major software vendors/servicers
data would be conducted on the its mandates to make insured funds to discuss an earlier version of the
institution’s premises. The FDIC does available quickly to depositors and proposal outlined in this ANPR. These
not intend to remove sensitive data from provide a least-cost resolution for meetings provided useful insights into
the institution’s premises under the Covered Institutions. The FDIC would the operations of different deposit
proposed testing process. These items like comment on the potential industry software and resulted in changes to the
include, but might not be limited to the costs and feasibility of implementing proposal. A previous version of the
completeness and reliability of the the options in the ANPR. The FDIC also FDIC’s proposal included a ‘‘freeze’’ on
standard data structure, the format is interested in comments on whether time deposits rather than the use of
requirements of the standard data there are other ways to accomplish its provisional holds against these
structure and the accuracy and goals that might be more effective or less accounts. The discussions with the
effectiveness of the provisional holds. costly or burdensome. In other words, software vendors resulted in an
what approach or combination of elimination of the ‘‘freeze’’ in favor of
V—New Deposit Accounts approaches (which may include new using provisional holds against all
Covered Institutions currently are not alternatives) most effectively meets this accounts. Further, an earlier version of
required to know the insurance status of cost/benefit tradeoff? The FDIC seeks the FDIC’s proposal included three tiers
depositors or inform them of this status comments on all aspects of the ANPR. for Covered Institutions rather than two.
when a new account is opened. The Between 2004 and 2006 the FDIC met
The third tier—to be comprised of the
FDIC is interested in comments on with six would-be Covered Institutions
least complex of the Covered
whether Covered Institutions should be and four software vendors/servicers for
Institutions—did not include a unique
encouraged or required to know the Covered Institutions. These meetings
depositor ID or provisional hold
insurance status of each new deposit took place at various stages in the
requirement. The original purpose of the
account and/or notify customers of this development process. The FDIC found
three-tiered approach was to reduce
status when a new account is opened. these meetings to be extremely helpful
industry implementation costs. The
Knowing the identity of each and is requesting additional meetings
software vendors indicated a less varied
depositor is an important aspect of a with interested parties. FDIC staff is
set of requirements would be easier and
deposit insurance determination. If Tier willing to travel to facilitate the meeting
less costly to implement, hence the
1 Covered Institutions are not required or structure a teleconference. Any such
movement to a suggested two-tiered
to have a unique ID for each depositor, meetings will be documented in the
should the FDIC require a unique FDIC’s public files to note the
depositor ID to be assigned by Covered institution’s general views on the ANPR Appendix A—Primary FDIC Deposit
Institutions when a new account is or answers to questions that have been Insurance Categories

Insurance category Description

1. Single Ownership ............. Funds owned by a natural person including those held by an agent or custodian, sole proprietorship accounts
and accounts that fail to qualify in any other category below. Coverage extends to $100,000 per depositor.
2. Joint Ownership ............... Accounts jointly owned as joint tenants with the right of survivorship, as tenants in common or as tenants by the
entirety. Coverage extends to $100,000 per co-owner.
• The account title generally must be in the form of a joint account (‘‘Jane Smith & John Smith’’).
• Each of the co-owners must sign the account signature card. (This requirement has exceptions, including cer-
tificates of deposit.)
• The withdrawal rights of the co-owners must be equal.
3. Revocable Trust ............... Accounts whereby the owner evidences an intention that upon his or her death the funds shall belong to one or
more qualifying beneficiaries. For each owner, coverage extends to $100,000 per beneficiary.
• The title of the account must include ‘‘POD’’ (payable-on-death) or ‘‘trust’’ or some similar term.
• The beneficiaries must be specifically named in the account records. (This requirement applies to informal
‘‘POD’’ accounts but does not apply to formal ‘living trust’ accounts.)
• The beneficiaries must be the owner’s spouse, children, grandchildren, parents or siblings.
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4. Irrevocable Trust .............. Accounts established pursuant to an irrevocable trust agreement. Coverage extends to $100,000 per beneficiary.
• The account records must indicate that the funds are held by the trustee pursuant to a fiduciary relationship.
• The account must be supported by a valid irrevocable trust agreement.
• Under the trust agreement, the grantor of the trust must retain no interest in the trust funds.
• For ‘‘per beneficiary’’ coverage, the interest of the beneficiary must be ‘‘non-contingent.’’

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Insurance category Description

5. Self-Directed Retirement .. Individual retirement accounts under 26 U.S.C. 408(a), eligible deferred compensation plans under 26 U.S.C.
457, self-directed individual account plans under 29 U.S.C. 1002 and self-directed Keogh plans under 26
U.S.C. 401(d). Coverage extends to $250,000 per owner or participant.
• The account records must indicate that the account is a retirement account.
• The account must be an actual retirement account under the cited sections of the Tax Code.
6. Corporation, Partnership Accounts of a corporation, partnership or unincorporated association. Coverage extends to $100,000 per entity.
or Unincorporated Asso-
• The account records must indicate that the entity is the owner of the funds or that the nominal accountholder is
merely an agent or custodian (with the entity’s ownership interest reflected by the custodian’s records).
• The entity must be engaged in an ‘‘independent activity.’’
• The entity must not be a sole proprietorship (which is treated as a single ownership account).
7. Employee Benefit Plan .... Deposits of an employee benefit plan as defined at 29 U.S.C. 1002, including any plan described at 26 U.S.C.
401(d). Coverage extends to $100,000 per participant.
• The account records must indicate that the funds are held by the plan administrator pursuant to a fiduciary re-
• The account must be supported by a valid employee benefit plan agreement.
• For ‘‘per participant’’ coverage the interests of the participants must be ascertainable and non-contingent.
8. Public Unit ........................ Funds of ‘‘public units’’ or ‘‘political subdivisions’’ thereof. Coverage extends to $100,000 for interest bearing de-
posits and $100,000 for non interest bearing deposits for each official custodian of the public unit or subdivi-
• For separate coverage for the non interest bearing deposits, the insured financial institution must be located in
the same state as the public unit.
• The account records must indicate that the funds are held by the custodian in a custodial capacity.
• For ‘‘per custodian’’ coverage, the custodian must be a separate ‘‘official custodian.’’
• For ‘‘per subdivision’’ coverage, the governmental entity must be a separate ‘‘political subdivision.’’

Appendix B—Comment Summary themes of the letters are summarized in simply are not needed. In other words,
Table 3. Sixty-four percent of the these commenters expressed the general
The FDIC received 28 comment letters comment letters indicated opposition belief that the FDIC failed in the 2005
in response to the 2005 ANPR. While due to the view that implementation ANPR to make a compelling case in
most of the comment letters touched on costs of the options outweighed any favor of any of the options in light of
multiple points, they generally focused potential benefits, high potential costs their perceptions of the costs.
on a common theme. The various and regulatory burdens, or the options
General comment Number Percentage

Costs Outweigh Benefits ................................................................................................................................................. 10 35.7

Opposed Due to Costs/Burdens ...................................................................................................................................... 5 17.9
Options Are Not Needed ................................................................................................................................................. 3 10.7
Do Not Include Our Institution as Covered ..................................................................................................................... 2 7.1
Supportive of at Least One Option, but in Some Cases Expressed Concern Over Costs ............................................ 5 17.9
Too-Big-To-Fail and/or Market Discipline ........................................................................................................................ 2 7.1
Options Raise Significant Privacy Issues ........................................................................................................................ 1 3.6

Total .......................................................................................................................................................................... 28 100.0

The 2005 ANPR noted that the FDIC the FDIC to have a rapid and effective Two other commenters indicated
was considering expanding the process for determining insurance support because the 2005 ANPR options
definition ofa Covered Institution to coverage. Not only does this benefit the were viewed as addressing the concept
include any institution with at least $20 FDIC directly, but effective performance of too-big-to-fail (‘‘TBTF’’) and
billion in total assets, regardless of the by the FDIC also benefits the entire enhancing market discipline. Gary H.
total number of deposit accounts. Two banking system by assuring the public Stern, President of the Federal Reserve
institutions falling into this category of the reliability of federal insurance of Bank of Minneapolis made the
commented that the definition of a deposits. The FDIC asked in this following five points.19
Covered Institution should not be Proposal for suggestions on alternative • ‘‘To ensure effective use of society’s
changed from the original definition of approaches that might achieve resources, the FDIC must reform current
at least 250,000 deposit accounts and $2 approximately the same benefits for the insurance determination procedures
billion in domestic deposits. FDIC at lower costs for banks. Because which hinder its ability to carry out the
Dollar sees no reasonable alternative, it least-cost resolution of a large bank.
Some commenters were expressly
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supports the general thrust of the • The FDIC’s Board of Directors

supportive of one or more of the Proposal.’’ 18 should focus on net benefits when
options, but in some cases indicated
concern over costs. In particular, the 18 Comment letter provided by Dollar Bank dated 19 Comment letter provided by the Federal
letter from Dollar Bank stated it March 13, 2006 in response to the 2005 ANPR, page Reserve Bank of Minneapolis in response to the
‘‘understands and supports the need for 1. 2005 ANPR, pages 1–5.

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evaluating the comments received on failure was remote. The Financial deposit data to be used by the FDIC to
the 2005 ANPR and choosing which Institutions Reform, Recovery, and make the deposit insurance
option to implement.20 Enforcement Act of 1989 (‘‘FIRREA’’), determination. The 2005 ANPR options
• The features of Option 2 are the Federal Deposit Insurance recognize that, even under the best of
necessary but may not prove sufficient Corporation Improvement Act of 1991 circumstances, it would be impossible
to correct weaknesses in the insurance (‘‘FIDICA’’) and the Federal Deposit for the FDIC to complete the steps
determination process. Insurance Reform Act of 2005 necessary for a deposit insurance
• The FDIC should give serious (‘‘FDIRA’’) were cited as containing determination and have the results
consideration to implementing Options provisions reducing the likelihood of posted in time for the opening of the
1 and 3. large-institution failures. It was noted bridge bank the business day following
• The reformed insurance that the FDIC is undergoing the longest
determination regime should apply to failure.24 Therefore, it is the FDIC’s view
period in its history without a failure. that one or more of the 2005 ANPR
all large banks for which the current Furthermore, responders pointed out
regime could prevent a least cost options appear necessary for a
that the most recent failures were of successful bridge bank opening,
resolution; the same insurance institutions not proposed to be covered
determination scheme need not apply to regardless of the advance warning or
by the regulation. It also was argued that
all covered institutions.’’ preparation time allotted.
the FDIC likely will have ample warning
One comment letter focused almost of a large-institution failure, thereby Differentiation between options.
entirely on financial privacy issues. allowing for adequate preparation time. While the majority of commenters
Numerous other commenters indicated Several commenters recommended opposed the FDIC moving forward,
financial privacy concerns as well, applying the 2005 ANPR options only in many clearly differentiated between the
particularly as they may arise from any the event the Covered Institution three options listed in the 2005 ANPR.
testing program implemented as part of reaches problem status. This suggestion The Clearing House stated, ‘‘we believe
the proposal. is discussed in more detail below. that Option 3 is so extraordinarily
The 2005 ANPR noted that ‘‘the FDIC Failure preparation time. The joint burdensome as to be unfeasible and that
solicits suggestions on alternative means trade association letter noted ‘‘failures the burden of Option 1 is clearly
of meeting the objective of conducting a that have occurred in the last few years excessive. Although Option 2 is less
timely insurance determination on were among financial institutions that onerous and a possible solution to the
Covered insured institutions.’’ 21 No would not be covered by this 2005 FDIC’s concerns, we believe that further
alternative suggestions were received. ANPR. Regulators frequently had
Since such a large portion of the study and dialogue between the Covered
knowledge of the problems institutions and the FDIC are necessary
comment letters raised concerns about
undermining these institutions and had to refine this option.’’ 25 26
costs versus benefits, this topic will be
time to prepare for closure. Sudden
discussed in the next section. This will Option 1 differs from Option 2 in that
failures were more likely to have been
be followed by a discussion of other it would require the institution to
caused by fraud or other criminal
issues raised in the comment letters. supply a unique depositor ID and the
activity. It is highly unlikely that such
Commenters’ Views on Costs Versus a series of similar events could cause a insurance category of each account.
Benefits failure of covered financial institutions Several commenters noted that—of the
because of their size, capital strength two—the insurance category
General arguments. Many requirement was significantly more
commenters—including all responses and diversity of lines of business.
Constructing, maintaining and burdensome. Wachovia Corporation
from the trade organizations—argued noted that it ‘‘currently uses a unique
that any option presented in the 2005 periodically testing the programs
proposed under this 2005 ANPR solely customer identifier for each of [its]
ANPR would impose high or significant
because of the remote chance of sudden general bank customers. However, this
costs on Covered Institutions. These
failure resembles an expensive solution identifier may not be available in all
costs would come in the form of dollar
expenditures and the utilization of in search of a very low probability instances. An example of this is
scarce technological resources. Some problem.’’ 23 brokered CDs, in which the insurance is
responders indicated this was the wrong The 2005 ANPR noted that Covered passed through to individuals who are
time for a new technological initiative Institutions are more likely to be closed the ultimate customers. We also do not
since ‘‘under both Basel II and Basel I– due to liquidity reasons, thus are prone have a unique way to identify insurance
A as proposed, banks will be required to fail on any day of the week. Covered categories. Identifying and developing
to develop new and costly information Institutions generally would be handled systemic ways to assess categories may
technologies.’’ 22 through a bridge bank structure, and to be arduous and costly. Again, the
Many commenters also argued that preserve franchise value the failed development of this logic by multiple
the likelihood of a Covered-Institution institution must open the day following banks would be redundant and would
failure. The provisional hold
20 This quote provides further elaboration on this functionality included in Options 1 and 24 These steps include: (1) Generating the

point. ‘‘As already noted, creating the conditions for 2 allows for a next-day opening of the depositor data file, (2) transmitting the data file to
imposition of least cost resolution of a large bank bridge institution. The nightly the FDIC, (3) processing the depositor data to
is the first and most important benefit of the produce the deposit insurance determination
options. This outcome, in turn, should increase processing cycle of Covered Institutions results and (4) transmitting and posting these
market discipline/reduce moral hazard. More does not end until the early morning results on the institution’s deposit systems.
market discipline and less moral hazard means a hours, often extending until 4 a.m. and, 25 Comment provided by The Clearing House
higher standard of living, as resources flow to their in some cases, until 7:30 a.m. Once the dated March 29, 2006 in response to the 2005
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best uses. This benefit is difficult to quantify but the ANPR, page 2.
limited evidence available suggests that it is nightly processing schedule is complete 26 This quotation is not intended to suggest the
potentially large.’’ a failed institution must generate trade organization supports Option 2, rather to
21 70 FR 73659, December 13, 2005.
illustrate the clear differences among the three
22 Comment provided by The Financial Services 23 American Bankers Association, America’s options. The commenter further noted ‘‘we are
Roundtable dated March 10, 2006 in response to the Community Bankers and The Financial Services concerned that even Option 2 does not create a
2005 ANPR, page 3. Roundtable, page 3. reasonable [cost/benefit] balance.’’

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Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules 74867

shift responsibility to the bank that the the costs would be ‘‘high’’ or ‘‘very assessment (indicating a basis for
bank should not have to bear.’’ 27 substantial.’’ Four of the 14 large- relative cost comparison).
Capital One Financial Corporation institution responders—Wachovia The paucity of data provided on
noted that ‘‘we estimate the cost of Corporation, Capital One Financial Option 3 reflects the view among most
complying with the FDIC’s Option 1 as Corporation, First Tennessee and Dollar
over $220,000. Most of that cost is commenters that it is unfeasible.
Bank—provided cost estimates for one Wachovia Corporation indicated, for
attributable to the additional or more of the options. These estimates
requirements of Option 1 as compared example, that Option 3 was ‘‘wholly
generally were characterized as being unacceptable,’’ 29 which appears to be
with Option 2—in particular, the ‘‘rough’’ and frequently contained
requirement to identify the insurance the reason why no cost estimate was
caveats. The estimates provided are provided for this option. First
ownership category of each deposit
listed in Table 4, which also shows the Tennessee was the only responder
account.’’ 28
Estimated costs. No trade organization assessable deposit base of the institution providing an estimate for Option 3
provided specific cost estimates on the (indicating institution size) and the indicating it was roughly five times
2005 ANPR options, other than to say impact of a 1-basis point annual FDIC higher that that for Option 2.
1-Basis point Estimated
Estimated implementation annual FDIC Cost as a % of
Responder Comment deposits
cost assessment 1 BP
($ millions) ($ millions) assessment

Wachovia Corporation .......... Option 2, for demand de- ‘‘$2 mm or more’’ ................. 307,000 30.7 7
posit, time deposit and se-
curities systems only.
Capital One Financial Cor- Option 1 ............................... ‘‘over $220,000’’ ................... 44,000 4.4 5
First Tennessee .................... Option 2 ............................... ‘‘exceed $1,000,000’’ ........... 23,000 2.3 44
First Tennessee .................... Option 3 ............................... ‘‘mid seven figures’’ ............. 23,000 2.3 200
Dollar Bank ........................... Cost of Option 2, ‘‘neg- ‘‘approximately $60,000’’ ...... 4,500 0.45 13
ligible’’ additional cost for
Option 1.

For Options 1 and 2 the cost estimates Too big to fail and market discipline. FDIC’s Views on the Cost/Benefit
provided in the table are fairly modest Several commenters raised the issue of Tradeoff
when matched against other potential TBTF, effectively expressing the Any option will impose industry
deposit insurance costs. Compared to a concern that uninsured depositors of a costs, but benefits also will accrue. The
1-basis point annual FDIC assessment, large institution could be made whole in FDIC must balance these costs and
the estimated implementation costs of the event of failure, regardless of benefits.
Options 1 or 2 ranged from 5 to 44 expected losses in the failed institution. Summary of costs. In its 2005
percent. The FDIC expects that Mr. Stern’s letter noted that ‘‘[i]n the visitations to the four large deposit
implementation costs will vary across face of insufficient technology to software vendors/servicers, two of the
institutions. The deposit systems at segregate deposits or information to organizations indicated the cost of the
Covered Institutions are different. In determine the insurance status of provisional hold functionality was fairly
particular, some institutions rely deposits, therefore, the FDIC would modest. The 2005 ANPR specifically
primarily on proprietary systems while likely prefer to provide depositors with requested comment on the costs of
others use software or servicing access to deposits even if they might be implementing the three options. The
provided by an outside vendor. uninsured. This preference, even if limited data summarized above suggests
The 2005 ANPR noted that many understandable, undercuts least cost fairly modest implementation costs for
resolution and puts pressure on an Option 2 approach and, for some
Covered Institutions use deposit
policymakers to invoke the systemic institutions, Option 1 as well. The
software supplied by a common vendor
risk exception of [FDICIA]. Invoking the consensus of comments was that Option
or have their deposits serviced by a 3 would be prohibitively expensive.
common servicer. The 2005 ANPR systemic risk exception due to
limitations in the resolution process (as While no commenters mentioned the
suggested this structure may help potential cost savings that may arise
mitigate the implementation costs of the opposed to preventing a true systemic
crisis) could contribute to substantial from the use of common software
options. No deposit software vendor or vendors or servicers, they could be
servicer responded to the 2005 ANPR, resource misallocation in the economy
significant. The available data on costs
nor did any commenter address the over time.’’ 30 Mr. Stern noted that these
currently is limited, although more
potential cost savings associated with costs are difficult to quantify, although information should result from this
the common use of software providers they could be substantial. request for comments as well as other
or servicers. The FDIC believes this research conducted by the FDIC.
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common usage would mitigate Many responders noted the low

implementation costs. likelihood of a Covered-Institution
27 Comment provided by Wachovia Corporation 28 Comment provided by Capital One Financial 29 Wachovia Corporation, page 3.
dated March 10, 2006 in response to the 2005 Corporation dated March 13, 2006 in response to 30 Federal Reserve Bank of Minneapolis, pages 2–
ANPR, page 3. the 2005 ANPR, page 2. 3.

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74868 Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules

failure. Historical evidence indicates disparate treatment among depositors Covered Institutions currently are
this to be the case. The FDIC also agrees within the failed institution and designated as problem institutions. The
that the reforms implemented in certainly different treatment relative to adoption of this exception likely would
FIRREA, FDICIA and FDIRA serve to the closure of a non-Covered Institution. imply that no Covered Institutions
reduce the probability of a Covered- The FDIC places a high priority on the would have to immediately comply
institution failure. However, even if the consistent implementation of its claims with the new FDIC requirements.
likelihood of a failures among Covered policies and procedures regardless of Several commenters also provided
Institutions is perceived to be low, it is the size or complexity of the institution. insights into the potential time needed
not zero. The FDIC should have in place Preservation of franchise value in the to implement the proposed rules. The
a credible plan for resolving the failure event of failure. The sale of the franchise Clearing House, for example, noted that
of an institution of any size with the of a failed institution can provide ‘‘material information system changes
least possible costs. The ability to significant value to mitigate failure costs take significant time. Our member banks
determine the insurance status of and is a necessary ingredient to a least- have discussed the ANPR with their
depositors in a failed institution in a cost resolution. Superior Bank, FSB, the technical staffs and have determined
timely manner is a critical element for largest failure over the past 10 years, that any of the requested changes could
ensuring a least-costly resolution. generated a franchise premium of $52 be made, but only over a significant
Meeting the FDIC’s legal mandates. million, or 17 percent of current period of time. Without more specific
FDICIA was one of the most important estimated FDIC losses in the failure. An direction, they cannot put a specific
pieces of legislation affecting the FDIC’s ineffective claims process—especially timeframe on the project, but to make
failure resolution process. Its least-cost one deviating significantly from the any substantial changes over multiple
requirement effectively requires FDIC’s normal policies and systems, and then fully test them, is
uninsured depositors to be exposed to procedures—risks reducing or likely to take more than a year.’’ 32
losses. Also, FDICIA’s legislative history destroying an important asset of the Additional time would be needed for
and the nature of the systemic risk receivership. Preservation of franchise the FDIC to test the system changes.
exception provide a clear message that value in the event of failure of a Covered The FDIC is concerned that a Covered
uninsured depositors of large Institution will be an important benefit Institution could fail prior to reaching
institutions are to be treated on par with of the proposed options. problem status (with a CAMELS rating
those of any size. Meeting these Suggested course of action. The strong of ‘‘3’’, for example), or relatively
mandates is an important benefit of the industry opposition and high costs of shortly after attaining problem status. If
rules being proposed. Option 3 make it unlikely to be the most the one-year implementation time
Enhancement of market discipline. cost-effective option. In addition, the estimate is generally accurate, the FDIC
The FDIC’s legal mandates have direct less costly options appear to meet the risks not meeting its objectives should a
implications for TBTF and market primary objective of the FDIC. Although Covered Institution fail more quickly
discipline. If financial markets perceive the 2005 ANPR generated only limited than one year after being designated a
uninsured depositors in large data on the costs of Options 1 and 2, problem institution. Further, a period of
institutions will be made whole in the these costs are almost certainly low financial or operational stress is not the
event of failure, deposits will be enough to merit moving forward— opportune time to make the proposed
directed toward these larger depository particularly given the substantial benefit system enhancements.
institutions. The result would be the to the FDIC in being able to meet its
misallocation of economic resources. Cost Reimbursement
statutory mandate for least-cost
Many market observers believe there are resolutions and the uniform application Several responders to the 2005 ANPR
substantial benefits of improved market of insurance limits, plus additional suggested that the FDIC cover
discipline that accrue even without benefits associated with enhanced implementation costs, either through a
serious industry distress or bank market discipline. Implementation costs direct payment or an assessment rebate.
failures. The FDIC agrees with Mr. may vary among Covered Institutions As shown in Table 4, the estimated
Stern’s assessment that this resource depending on conditions such as the costs of implementing Options 1 or 2 are
misallocation could be significant. number of deposit systems, the age of fairly modest, ranging from 5 to 44
Effective market discipline also limits percent of a 1-basis point annual FDIC
these systems and their architecture,
the size of troubled institutions and assessment. Implementation costs may
and whether deposit operations are
results in a more rapid course toward be viewed as part of the overall cost of
processed in-house or through a
failure. Both serve to mitigate overall deposit insurance; therefore, not subject
resolution losses. Lower resolution servicer. To some degree, the factors
affecting costs also indicate a facet of to reimbursement.
losses benefit insured institutions
through lower insurance assessments. operational risk which may influence Extending Program to All Insured
Equity in the treatment of depositors failure potential. Institutions
of insured institutions. In the absence of Implementation of Options Upon Two commenters proposed extending
one or more of the options outlined in Reaching Problem Status the options to all insured institutions,
the 2005 ANPR, the FDIC is concerned Several commenters suggested and one commenter suggested the FDIC
that the resolution of a Covered delaying the implementation of any may apply the options to large
Institution could be accomplished only options until a Covered Institution institutions now but include small
through a significant departure from its reaches ‘‘problem bank status.’’ 31 For institutions at some future point. The
normal claims procedures. This 2005 ANPR specifically limited the
supervisory purposes problem bank
departure could involve leaving the scope of the options to the 145 insured
status refers to any insured depository
bank closed until an insurance
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institution with a composite CAMELS institutions with at least 250,000

determination is made or the use of deposit accounts and more than
rating of ‘‘4’’ or ‘‘5’’. None of the
shortcuts to speed the opening of the $2 billion in domestic deposits. The
bridge institution. The use of shortcuts 31 See, for example, the American Bankers 2005 ANPR noted that the FDIC was
or other mechanisms to facilitate Association, America’s Community Bankers and
depositor access to funds will imply The Financial Services Roundtable letter, page 3. 32 The Clearing House, page 3.

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Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules 74869

considering expanding the definition of individual depositors and estimating the not maintained or do not apply, a null
a Covered Institution but only in a way total amount of insured funds in the value in the appropriate field should be
that would include a handful of other institution. The receipt of such indicated.
institutions (for example, those with at depositor data is necessary for the FDIC XML may be the most beneficial
least $20 billion in total assets, to carry out its insurance function. The format. XML has become a widely
regardless of the number of accounts). options provided in this [2005] ANPR adopted standard for data interchange
The 2005 ANPR never suggested or do not alter the FDIC policy regarding by enabling a common messaging format
mentioned in any way the possibility of the receipt of depositor information in for the exchange of information between
extending coverage to all insured preparation for the resolution of a systems. XML will enable all the
institutions. failing insured institution. The FDIC is information listed below to be
As noted in the 2005 ANPR, the aware of the potential privacy issues consolidated into one file and presented
‘‘FDIC is seeking to minimize surrounding the holding of depositor in plain text with hierarchical
[implementation] costs while at the information and has in place strict relationships providing a single source/
same time ensuring that it can safeguards to protect these data.’’ 34 The file containing the required information.
effectively carry out its mandates to 2005 ANPR also states ‘‘it is possible to Following is a list of the data fields
make insured funds available quickly to conduct an effective testing process that are to be included in the proposed
depositors and provide a least-cost while on-site, without the need for data structure along with explanations
resolution for Covered institutions.’’ 33 sensitive depositor data to leave the of the data being requested. The fields
The FDIC’s deposit insurance institution’s premises.’’ 35 are listed in the order they should
determination modernization initiative The 2005 ANPR options would not appear in the file.
is directed at improving the process at change the treatment of depositor data
the very largest institutions. The FDIC in the event an institution is in danger Representative Deposit Data Elements
has never considered extending the of failing, nor have such changes been The Deposit data elements provide
options beyond the largest, most proposed. The FDIC still believes an information specific to deposit account
complex institutions. There simply is no effective testing program can be balances and account data. The
business reason for doing so. structured whereby sensitive depositor sequencing of these elements, their
data never leaves the institution’s physical data structures and the mode
Financial Privacy
premises. These testing safeguards or method of data transmission will be
One comment letter focused primarily eliminate privacy concerns. developed in cooperation with the
on financial privacy, but other letters Covered Institutions.
mentioned the issue as well, especially Appendix C—Data Elements Included
in the context of any testing program. As in the Standard Data Set Note: Fields 13–26 relate to the Account
noted in the 2005 ANPR, ‘‘[a]s part of its The Standard Data Request contains Name and Address information. Some
normal practice, the FDIC obtains data structures which will be used by systems provide for separate fields for
depositor data only at the time an the FDIC to determine insurance Account Title/Name, Address, City, State,
Zip, and Country, all of which are parsed out.
insured institution is in danger of categorization. This data structure may Others systems may simply provide multiple
failing. These data are received in the be divided into multiple Record Types/ lines for Name, Address, City, State, Zip,
weeks or months prior to failure, and Formats. It is the FDIC’s intent to work with no distinction. Please populate fields
are obtained for the sole purpose of with the industry to define a standard that best fit the system’s data, either fields
determining the insurance status of data structure. If data or information are 13–20 or fields 21–26.

Questions/comments for the

Field name FDIC field description industry

1 .......... DP_Acct_Numb ......... Account Number: The unique number assigned by the institution to this Is there a case where this number
account. is not unique within your institu-
tion? Are account numbers
unique across different deposit
systems? If they are not unique,
will the combination of branch
and account number provide a
unique number?
2 .......... DP_Sub_Acct_Numb Sub-Account Number: Account number field that further identifies the
account. May be used to identify separate deposits tied to this ac-
count where there are different processing parameters, i.e. interest
rates, maturity dates, but all owners are the same (like CD certificate
3 .......... DP_Tax_ID ................ Tax ID: Provide the tax identification number(s) maintained on the ac-
count. For consumer accounts, typically, this would be the primary
account holder’s social security number (SSN). For business ac-
counts it would be the federal tax identification number (TIN).
4 .......... DP_Tax_Code ........... Tax ID Code: This field should identify the type of the tax identification Is the data field available in your
number. Generally deposit systems have flags or indicators set to in- deposit system?
dicate whether the number is an SSN or TIN.
• S = Social Security Number.
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• T = Federal Tax Identification Number.

• O = Other.

33 70 FR 73654, December 13, 2005. 34 70 FR 73653, December 13, 2005. 35 70 FR 73658, December 13, 2005.

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74870 Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules

Questions/comments for the

Field name FDIC field description industry

5 .......... DP_Branch ................ Branch Number: This field should identify the branch or office associ-
ated with the account. Usually referred to as branch number but may
represent a specialty department or division or office.
6 .......... DP_Cost_Center ........ Cost Center or G\L Code: Identifier used for organization reporting or
ownership of the account. Ties to general ledger accounts. If cost
center is not carried in the deposit record, leave blank.
7 .......... DP_Prod_Type .......... Product Type: This field is used to identify the product type from a cus- Can your deposit accounts be cat-
tomer perspective. Your financial institution may identify this field by egorized into these product
another name, but will indicate account product: types? How accurate would the
• CON = Personal or consumer accounts; this can be a SGL, JNT, designation be? What data ele-
REV, IRR, IRA. ments in your deposit system
• BUS = Business. would enable you to determine
• NPR = Non-profit accounts. the product type? Is this avail-
• GOV = Accounts held by government entities (city, state, political able for all deposit products?
• FIN = Accounts held by other financial institutions.
• INT = Internal accounts (bank control accounts) or bank owned
• BRK= Brokered accounts.
8 .......... DP_Owner_Ind .......... Customer Owner Indicator: ...................................................................... How accurately can you determine
This field is used to identify the type of ownership at the account level. the ownership status of an ac-
Your financial institution may call these indicators by another name, count? Are these data readily
but the field should indicate: available on your deposit sys-
• S = Single. tem(s)?
• J = Joint Account.
• P = Partnership account.
• C = Corporation.
• B = Brokered Deposits.
• T = Trust.
• O = Other.
9 .......... DP_Prod_Cat ............. Product Category: .................................................................................... Can your deposit accounts be cat-
This is a broad classification of products and accounts. It is sometimes egorized into these product cat-
referred to as ‘‘application type’’ or ‘‘system type’’. Examples of val- egories? How accurate would the
ues in the field are: categorization be? What data
• DDA = Non-Interest Bearing Checking accounts. elements in your deposit system
• NOW = Interest Bearing Checking accounts. would enable you to determine
• MMA = Money Market Accounts. the product category? Is this
• SAV = Savings accounts and Money Market Savings accounts. available for all deposit products?
This includes any interest bearing accounts with regulated withdrawal
• CDS = Time Deposit accounts and Certificate of Deposit accounts.
Include any accounts with specified maturity dates that may or may not
be renewable.
• REP = Repurchase agreements—Include any accounts supported
by an agreement to repurchase the deposit at a specified date and in-
terest rate, and is secured by designated securities owned by the insti-
• IRA = Individual Retirement Account (IRA).
• RIRA = Roth IRA.
• KEO = Keogh.
10 ........ DP_Stat_Code ........... Status Code: Include only the following status or condition of the ac-
count. Field values are:
• O = Open.
• C = Closed.
• D = Dormant.
• I = Inactive.
11 ........ DP_Short_Name ........ Short Name or SORT Name: Generally the field used to create an
alpha list of accounts or to sort names. If a similar field does not
exist, create a ‘‘Short Name’’ by concatenating data using the ac-
count title field. Personal accounts should have all letters or last
name if possible or first 5 letters of last name and first 2 letters of
first name for all names on account. Business accounts should have
business name with leading words such as ‘‘the’’ dropped so the
name can be properly placed in an alphabetized account listing.
12 ........ DP_Acct_Title_1 ........ Account Title Line 1: Two lines (Fields 13 & 14) are provided to enter Please indicate the best way to ob-
account styling or titling of the account. These data will be used to tain account title, name and ad-
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identify the owners of the account. dress based on the characteris-

tics of your deposit system(s).
13 ........ DP_Acct_Title_2 ........ Account Title Line 2: Additional Account Title line.
14 ........ DP_Address_Line_1 .. Address Line 1: Two lines (Fields 15 & 16) are provided to enter the
street, PO Box, suite number, etc * * * of the address.
15 ........ DP_Address_Line_2 .. Address Line 2: Additional address line.

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Questions/comments for the

Field name FDIC field description industry

16 ........ DP_City ..................... City: Enter the city associated with the mailing address.
17 ........ DP_State ................... State: Enter the state abbreviation associated with the mailing address.
18 ........ DP_ZIP ...................... ZIP: This field allows for the ZIP+ 4 Code associated with the mailing
address. If ‘‘4 Code’’ is not available provide 5-digit ZIP Code and
leave ‘‘4 Code’’ blank.
19 ........ DP_Country ............... Country: This field should identify the country associated with the mail-
ing address. Provide the name of the country or the standard country
20 ........ DP_NA_Line_1 .......... Name or Address Line 1: Six lines (Fields 21—26) are provided to
enter the name and/or the account mailing address if your system
does not distinguish particular address lines.
21 ........ DP_NA_Line_2 .......... Name & Address Line 2: Additional name and/or address line.
22 ........ DP_NA_Line_3 .......... Name & Address Line 3: Additional address line.
23 ........ DP_NA_Line_4 .......... Name & Address Line 4: Additional address line.
24 ........ DP_NA_Line_5 .......... Name & Address Line 5: Additional address line.
25 ........ DP_NA_Line_6 .......... Name & Address Line 6: Additional address line.
26 ........ DP_Cur_Bal ............... Current Balance: This amount represents the current balance in the ac-
count at the end of business on the effective date of this file. This
balance should not be reduced by float or holds. For CDs and time
deposits, it should reflect the principal balance plus any interest paid
and available for withdrawal that is not already included in the prin-
cipal (do not include accrued interest not paid). The total of all cur-
rent balances in this file should reconcile to the total deposit trial bal-
ance totals or other summary reconciliation of deposits performed by
the financial institution.
27 ........ DP_Int_Rate .............. Interest Rate: The current interest rate in effect for interest bearing ac-
28 ........ DP_Bas_Days ........... Basis Days: Indicates the basis on which interest is to be paid. Valid
values are:
• 1 = 30/360.
• 2 = 30/365.
• 3 = 365/365 (actual/actual).
29 ........ DP_Int_Type .............. Interest Type: Indicates the type of interest to be paid. Valid values
• S = Simple.
• D = Daily Compounding.
• C = Continuous Compounding.
• O = Other.
30 ........ DP_Int_Factor ............ Interest Rate Daily Factor: This field should reflect the daily interest Are these data available for inter-
rate factor for generating interest. est-bearing accounts?
31 ........ DP_Acc_Int ................ Accrued Interest: This field should reflect the amount of interest that
has been earned but not yet paid to the account as of the date of
the file.
32 ........ DP_Lst_Int_Pd ........... Date Last Interest Paid: This field should indicate the date thru which
interest was last paid to the account. Must be entered in
MMDDYYYY format.
33 ........ DP_Lst_Deposit ......... Date Last Deposit: This date should reflect the last deposit transaction
posted to the account. For example, a deposit that included checks
and or cash. Must be entered in MMDDYYYY format.
34 ........ DP_Open_DT ............ Account Open Date: This date should reflect the date the account was
opened. If the account had previously been closed and re-opened,
this should reflect the most recent re-opened date. Must be entered
in MMDDYYYY format.
35 ........ DP_Nxt_Mat .............. Date of Next Maturity: For CD and time deposit accounts, this is the
next date the account is to mature. For non-renewing CDs that have
matured and are waiting to be redeemed this date may be in the
past. Must be entered in MMDDYYYY format.

Representative Hold Data Elements collateral placed on an account. If an provided to help the Covered
The Hold data elements provide account has more than one collateral Institutions or FDIC to process holds
information related to any holds for hold, additional Hold elements may be more efficiently.

Questions/comments for the

Field name FDIC field description industry
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1 ........... HD_Acct_Numb .............. Account Number ................................................................................... Do we need the branch number to
The account number associated with the hold. Should be the same make this unique across all de-
as the account number in Deposit Record field #1. posit accounts?
2 ........... HD_Sub_Acct_Numb_ID Sub-Account Number:
Account number field that further identifies the account.

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Questions/comments for the

Field name FDIC field description industry

3 ........... HD_Hold_Amt ................ Hold Amount:

Dollar amount of the hold.
4 ........... HD_Hold_Reason .......... Hold Reason: Reason for the hold. Valid values are:
• LN = Loan collateral hold.
• OT = Other—any hold not a collateral hold.
5 ........... HD_Hold_Desc ............... Hold Description: Description of the hold available on the system.
6 ........... HD_Hold_Days ............... Hold Days: The number of days the hold was/is intended. May be Please specify a preference be-
used instead of an expiration date. tween field #6 and field #8.
7 ........... HD_Hold_Start_Dt .......... Hold Start Date: The date the hold was initiated. Must be entered in
MMDDYYYY format.
8 ........... HD_Hold_Exp_Dt ........... Hold Expiration Date: The date the hold is to expire. Must be entered
in MMDDYYYY format. May be used instead of number of hold

Customer Record Held in Central have more than one deposit account, or deposit account and will be associated
Information File (‘‘CIF’’) or Central may be partial owners of more than one in the deposit record (pointed to or
Information System (‘‘CIS’’) deposit account. Each of the customer’s linked by a linking file). If a linking file
accounts are associated with a customer is required to link customer records to
The Customer Record provides record. If there are multiple owners of deposit records, please provide the
information related to each customer of an account, multiple customer records program along with instructions on how
the financial institution. Customers may (CIF/CIS) will be associated to the to link.

Questions/comments for the

Field name FDIC field description industry

1 ........... CS_Cust_Numb ............. Customer Number: The number assigned to the customer in the
Customer Information System.
2 ........... DP_Acct_Numb .............. Account Number: The unique account number assigned by the insti-
3 ........... CS_Tax_ID ..................... Customer Tax ID Number: Provide the Tax ID number on record for Do you store customer tax ID
the customer. number in your customer
records? If so, is there a possi-
bility that the customer and ac-
count level tax ID numbers are
4 ........... CS_Tax _Code ............... Customer Tax ID Code: This field should identify the type of the Tax
ID number of the customer. Valid values are:
• S = Social Security Number.
• T = Federal Tax Identification Number.
• O = Other.
5 ........... CS_Rel_Code ................ Relationship Code: This code indicates how the customer is related The CIF account is for one person
to the account. Valid values are: or entity. That person may have
• P = Primary Owner. more than one deposit account
• S = Secondary Owner. that is tied to the CIF number.
• B = Beneficiary. The relationship code is given
• T = Trustee. for the person or entity relating
• O = Other. to each account the CIF is tied
• U = Unknown. to. Are these data available
within your customer records?
6 ........... CS_Bene_Code ............. Beneficiary Type Code: If the customer is considered a beneficiary, Are these data available within
enter the type of account associated with this customer. This in- your customer records?
cludes beneficiaries on retirement accounts, trust accounts, minor
accounts, and payable-on-death accounts. Valid values are:
• I = IRA.
• T = Trust—irrevocable.
• R = Trust—revocable.
• M = Uniform Gift to Minor.
• P = Payable on death.
• O = Other.
7 ........... CS_Name ....................... Customer Name: The name of the customer. Provide in the Mapping
document the typical format the bank practices for business cus-
tomers and personal/individual customers, i.e.—Last Name first,
First Name last.
8 ........... CS_Last_Name .............. Customer Last Name: The last name of the individual/ personal cus-
jlentini on PROD1PC65 with PROPOSAL

9 ........... CS_First_Name .............. Customer First Name: The first name of the individual/ personal cus-
10 ......... CS_Middle_Name .......... Customer Middle Name: The middle name of the individual/ personal

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Federal Register / Vol. 71, No. 239 / Wednesday, December 13, 2006 / Proposed Rules 74873

Questions/comments for the

Field name FDIC field description industry

11 ......... CS_Suffix ....................... Customer Suffix: The suffix of the individual/ personal customer—i.e.
Jr., Sr., III, etc.
12 ......... CS_Comp_Name ........... Customer Company Name: The company name of the business cus- How are business customers re-
tomer. flected in your customer
records? Are there multiple
name/address fields?
13 ......... CS_Address_1 ............... Address Line 1: Two lines (Fields 13 & 14) are provided to enter the
street, PO Box, suite number, etc. of the address.
14 ......... CS_Address_2 ............... Address Line 2: Additional address field.
15 ......... CS_City .......................... City: Enter the city associated with the mailing address of the cus-
16 ......... CS_State ........................ State: Enter the state abbreviation associated with the mailing ad-
dress of the customer.
17 ......... CS_ZIP ........................... ZIP: This field allows for the ZIP+ 4 Code associated with the mail-
ing address of the customer.
18 ......... CS_Country .................... Country: This field should identify the country associated with the
mailing address. Provide the name of the country or the standard
country code.
19 ......... CS_Birth_Dt ................... Customer Birth Date: The birth date on record for the customer.
Must be entered in MMDDYYYY format.
20 ......... CS_Telephone ............... Customer Telephone Number: The telephone number on record for
the customer.
21 ......... CS_Email ....................... Customer Email Address: The e-mail address on record for the cus-

* * * * * of cracks, in a weld-repaired area on a Engine Certification Office, FAA, Engine

By order of the Board of Directors. forward engine mount platform and a and Propeller Directorate, 12 New
Dated at Washington, DC, this 5th day of forward engine mount yoke, found England Executive Park, Burlington, MA
December, 2006. during a fluorescent penetrant 01803; telephone (781) 238–7176; fax
Federal Deposit Insurance Corporation. inspection (FPI). These parts were weld- (781) 238–7199.
repaired during manufacture. We are SUPPLEMENTARY INFORMATION:
Robert E. Feldman,
proposing this AD to prevent cracks in
Executive Secretary.
the forward engine mount platform and Comments Invited
[FR Doc. E6–21143 Filed 12–12–06; 8:45 am] forward engine mount yoke that could We invite you to send us any written
BILLING CODE 6714–01–P result in possible separation of the relevant data, views, or arguments
engine from the airplane. regarding this proposal. Send your
DATES: We must receive any comments comments to an address listed under
DEPARTMENT OF TRANSPORTATION on this proposed AD by January 12, ADDRESSES. Include ‘‘Docket No. FAA–
2007. 2006–23871; Directorate Identifier
Federal Aviation Administration 2006–NE–01–AD’’ in the subject line of
ADDRESSES: Use one of the following your comments. We specifically invite
14 CFR Part 39 addresses to comment on this proposed comments on the overall regulatory,
AD. economic, environmental, and energy
[Docket No. FAA–2006–23871; Directorate
• DOT Docket Web site: Go to aspects of the proposed AD. We will
Identifier 2006–NE–01–AD] and follow the consider all comments received by the
RIN 2120–AA64 instructions for sending your comments closing date and may amend the
electronically. proposed AD in light of those
Airworthiness Directives; General • Government-wide rulemaking Web
Electric Company (GE) CF6–80C2 comments.
site: Go to We will post all comments we
Turbofan Engines and follow the instructions for sending receive, without change, to http://
AGENCY: Federal Aviation your comments electronically., including any personal
Administration (FAA), Department of • Mail: Docket Management Facility; information you provide. We will also
Transportation (DOT). U.S. Department of Transportation, 400 post a report summarizing each
ACTION: Notice of proposed rulemaking
Seventh Street, SW., Nassif Building, substantive verbal contact with FAA
(NPRM). Room PL–401, Washington, DC 20590– personnel concerning this proposed AD.
0001. Using the search function of the DOT
SUMMARY: The FAA proposes to adopt a • Fax: (202) 493–2251. Web site, anyone can find and read the
new airworthiness directive (AD) for GE • Hand Delivery: Room PL–401 on comments in any of our dockets,
CF6–80C2 series turbofan engines. This the plaza level of the Nassif Building, including the name of the individual
proposed AD would require replacing 400 Seventh Street, SW., Washington, who sent the comment (or signed the
certain installed part number (P/N) and DC, between 9 a.m. and 5 p.m., Monday comment on behalf of an association,
serial number (SN) cast titanium weld- through Friday, except Federal holidays.
jlentini on PROD1PC65 with PROPOSAL

business, labor union, etc.). You may

repaired forward engine mount You may examine the comments on review the DOT’s complete Privacy Act
platforms and cast titanium forward this proposed AD in the AD docket on Statement in the Federal Register
mount yokes, with a forged titanium or the Internet at published on April 11, 2000 (65 FR
a non-welded cast titanium part. This FOR FURTHER INFORMATION CONTACT: 19477–78) or you may visit http://
proposed AD results from the discovery James Lawrence, Aerospace Engineer,

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