[Federal Register Volume 84, Number 246 (Monday, December 23, 2019)]
[Notices]
[Pages 70527-70528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27626]
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FEDERAL DEPOSIT INSURANCE CORPORATION
Notice of the FDIC's Response to Exception Requests Pursuant to
Recordkeeping for Timely Deposit Insurance Determination
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Notice of the FDIC's response to exception requests pursuant to
the Recordkeeping for Timely Deposit Insurance Determination rule.
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SUMMARY: In accordance with its rule regarding recordkeeping for timely
deposit insurance determination, the FDIC is providing notice to
covered institutions that it has granted a time-limited exception
concerning the requirement to maintain official custodian information
in deposit account records for government deposit accounts, a time-
limited exception concerning the requirement to maintain accurate
beneficiary information in deposit account records for informal
revocable trust accounts, and an indefinite exception concerning the
requirement to maintain certain identifying information for beneficial
owners of deposits in low balance, short-term prepaid card accounts.
DATES: The FDIC's grants of exception relief were effective as of
November 26, 2019.
FOR FUTHER INFORMATION CONTACT: Peter Miller, Assistant Director,
Division of Complex Institution Supervision and Resolution; telephone
917-320-2589.
SUPPLEMENTARY INFORMATION: The FDIC has granted three exception
requests pursuant to the FDIC's rule entitled ``Recordkeeping for
Timely Deposit Insurance Determination,'' codified at 12 CFR part 370
(part 370).\1\ Part 370 generally requires covered institutions to
implement the information technology system and recordkeeping
capabilities needed to quickly calculate the amount of deposit
insurance coverage available for each deposit account in the event of
failure. Pursuant to section 370.8(b)(1), one or more covered
institutions may submit a request in the form of a letter to the FDIC
for an exception from one or more of the requirements of part 370 if
circumstances exist that would make it impracticable or overly
burdensome to meet those requirements. Pursuant to section 370.8(b)(3),
a covered institution may rely upon another covered institution's
exception request which the FDIC has previously granted by notifying
the FDIC that it will invoke relief from certain part 370 requirements
and demonstrating that the covered institution has substantially
similar facts and circumstances to those of the covered institution
that has already received the FDIC's approval. The notification letter
must also include the information required under section 370.8(b)(1)
and cite the applicable notice published pursuant to section
370.8(b)(2). Unless informed otherwise by the FDIC within 120 days
after receipt of a complete notification for exception, the exception
will be deemed granted subject to the same conditions set forth in the
FDIC's published notice.
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\1\ 12 CFR part 370.
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These grants of relief may be rescinded or modified upon material
change of circumstances or conditions related to the subject accounts,
or upon failure to satisfy conditions applicable to each. These grants
of relief will be subject to ongoing FDIC review, analysis, and
verification during the FDIC's routine part 370 compliance tests. The
following exceptions were
[[Page 70528]]
granted by the FDIC as of November 26, 2019.
I. Government Deposit Accounts for Which the Covered Institution Does
Not have the Requisite Information Regarding the Official Custodian
A covered institution was granted a time-limited exception from the
general recordkeeping requirements set forth in section 370.4(a) to
obtain official custodian information needed to calculate deposit
insurance available for government deposit accounts and maintain that
information in its deposit account records. The covered institution did
not collect, or have a mechanism to collect such information prior to
the FDIC's adoption of part 370 and anticipates that it may not be able
to collect such information for all government accounts before its
April 1, 2020 compliance date.
In connection with the FDIC's grant of relief, the covered
institution will implement an outreach plan to obtain the requisite
information directly from the government account holders; update its
electronic deposit account records and make other IT system
enhancements as needed; ensure that, from and after the April 1, 2020
compliance date, holds can be placed on government deposit accounts in
the event of its failure until sufficient information is provided by
the account holder to enable calculation of deposit insurance coverage;
submit a status report to the FDIC at the midpoint of the exception
relief period; and immediately notify the FDIC of any change in
relevant circumstances or conditions.
II. Informal Revocable Trust Accounts for Which the Covered Institution
Needs Additional Time To Integrate Beneficiary Information
A covered institution was granted a time-limited exception from the
general recordkeeping requirements set forth in section 370.4(a) to
identify accurate beneficiary information needed to calculate deposit
insurance coverage for informal revocable trust accounts (also known as
``payable-on-death'' or ``in-trust-for'' accounts) and maintain that
information in a systematic manner that can be used by its IT system to
calculate deposit insurance coverage.
In connection with the FDIC's grant of relief, the covered
institution will implement and complete review of paper-based documents
or contact account holders to obtain the necessary beneficiary
information; update its electronic deposit account records and make
other IT system enhancements as needed; submit a status report to the
FDIC at the midpoint of the period for which relief is granted; and
immediately notify the FDIC of any change in relevant circumstances or
conditions.
III. Deposits Held in Connection With Low Balance, Short-Term Prepaid
Cards
A covered institution was granted an indefinite exception from
section 370.4(a)(1)(ii) for deposit accounts held in connection with
low balance, short-term prepaid cards issued for rebates, refunds,
incentives, and per diem payments. These cards are issued by the
covered institution on behalf of a commercial customer and have been
registered by the cardholders. Although the prepaid cards are
registered, the cardholders do not provide social security numbers,
which are necessary for the covered institution's IT system to
aggregate deposits by owner for deposit insurance calculation purposes.
The covered institution asserts that a certain small population of
prepaid cardholders will not provide personally identifiable
information for a low dollar prepaid card that will be used within
months of issuance. This exception does not include deposit accounts
held in connection with payroll or government prepaid cards, certain
types of loyalty or rebate cards where the cardholder is not the actual
owner of the funds, or per diem cards for which the covered institution
has a social security number.
The covered institution stated that it has not collected social
security numbers prior to issuance of these prepaid cards, nor does it
have a business purpose or mechanism to do so. It also stated that
doing so would jeopardize the commercial viability of the product or
service and that the deposit accounts subject to the exception were a
small subset of the covered institution's prepaid card portfolio and
have low balances and high turnover.
In connection with the FDIC's grant of relief, the covered
institution will: maintain the capability to restrict access to the
deposit accounts subject to the exception to ensure no uninsured funds
leave the covered institution in the event of its failure; maintain at
least one method for the cardholder to register his or her name,
address, and social security number through, for example, a website or
call center; receive daily reports from the prepaid card processor(s)
with customer name, address, transaction data, and end-of-day customer
balances; document the resources, methods, and estimated time needed at
failure to collect social security numbers related to the subject
accounts; include in the institution's current prepaid cardholder
disclosure notices that access to funds will be withheld in the event
of failure pending receipt of sufficient information, including, at a
minimum, government identification, to complete a deposit insurance
calculation; demonstrate the IT system's ability to timely generate the
customer file and process the deposit insurance calculation; and
immediately bring to the FDIC's attention any change of circumstances
or conditions.
Federal Deposit Insurance Corporation.
Dated at Washington, DC on December 18, 2019.
Annmarie H. Boyd,
Assistant Executive Secretary.
[FR Doc. 2019-27626 Filed 12-20-19; 8:45 am]
BILLING CODE 6714-01-P