Regulatory Alerts2024-11-18 | FIL-81-2024FDIC Extends Comment Period for Proposed Rule on Custodial Deposit Accounts with Transactional Features and Prompt Payment of Deposit Insurance to Depositors
The Federal Deposit Insurance Corporation extends the comment period for its proposed recordkeeping rule on custodial deposit accounts with transactional features until January 16, 2025. The proposal mandates insured depository institutions to maintain accurate, daily-reconciled records identifying beneficial owners, account balances, and ownership categories using a specified file format. These recordkeeping requirements, subject to specific exemptions and third-party arrangements, enable the FDIC to promptly determine eligibility and pay deposit insurance claims following an institution failure.
Laws and Regulations
November 18, 2024
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Summary The Federal Deposit Insurance Corporation (FDIC) is extending the comment period for the proposed rule on Custodial Deposit Accounts with Transactional Features and Prompt Payment of Deposit Insurance to Depositors from December 2, 2024 to January 16, 2025. Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-insured financial institutions. Highlights To ensure that interested respondents have sufficient time to consider and prepare thoughtful input regarding the proposed rule on recordkeeping for custodial accounts, the FDIC is extending the end of the comment period of the proposal by 45 days. Comments must be received by the FDIC on or before January 16, 2025. On September 17, 2024, the FDIC issued for public comment a notice of proposed rulemaking (proposal) to strengthen FDIC-insured depository institutions’ (IDI) recordkeeping for custodial deposit accounts with transactional features and preserve beneficial owners’ and depositors’ entitlement to the protections afforded by federal deposit insurance. The proposal is intended to promote the FDIC’s ability to promptly make deposit insurance determinations and, if necessary, pay deposit insurance claims “as soon as possible” in the event of the failure of an IDI holding custodial deposit accounts with transactional features. Under the proposal, IDIs holding custodial deposit accounts with transactional features, subject to a list of exemptions, would be required to maintain records relating to the account, using a specific file format provided by the rule. These records would identify, for each custodial account: The beneficial owners of the custodial account, The balance attributable to each beneficial owner, and The ownership category in which the beneficial owner holds the deposited funds. IDIs would be required to implement internal controls to ensure that account balances are accurate, including reconciliations no less frequently than as of the close of business daily. The rule would permit records to be maintained through a third party if certain specific requirements are satisfied. The proposal’s provisions also provide for oversight by the banks’ primary federal supervisor to review for compliance with this rule and enforcement authority to compel compliance if the bank fails to meet these requirements.
FIL-81-2024
Attachment(s)
Financial Institution Letter Requirements for Custodial Deposit Accounts with Transactional Features and Prompt Payment of Deposit Insurance to Depositors
Press Release FDIC Proposed Deposit Insurance Recordkeeping Rule for Banks’ Third-Party Accounts
RIN 3064-AG07 Notice of Proposed Rule - Notice of Proposed Rulemaking on Custodial Deposit Accounts with Transaction Features and Prompt Payment of Deposit Insurance to Depositors
Related Topics
Consumer Compliance/Protection
Deposit Insurance
Third-Party Relationships
Contact(s)
Division of Depositor and Consumer Protection