Following Regulations

Article excerpt

Deposit insurance and managing official interlocks top agencies' agendas


Issue: Proposal to simplify the process for calculating joint-account insurance coverage (if adopted, an individual's aggregate ownership in all joint accounts will be insured up to $100,000) and to expand the qualified beneficiaries for separate insurance coverage of payable-ondeath accounts.

Agency: FDIC.

IBAA Comments:

Strongly supported the elimination of the first step in the twostep process for calculating coverage for joint accounts, because it would reduce confusion for both bank customers and bank employees;

Strongly supported the expansion of qualified beneficiaries for separate insurance coverage of payable-on-death accounts to include parents and siblings;

Applauded the FDIC for undertaking a more realistic analysis of the costs of these changes, focusing on potential costs to the insurance funds and not potential expansion of coverage; and

Reminded the FDIC of the importance of deposit insurance to community banks, and urged the agency to continue to simplify and streamline the deposit insurance regulations.


Issue: Proposal to update the rules on management official interlocks to comply with recent statutory changes.

Agencies: OCC, Federal Reserve, FDIC and OTS.

IBAA Comments:

Agreed that the size of unaffiliated institutions that may share management officials should be periodically increased to account for inflation, and that the Consumer Price Index is an appropriate benchmark;

Supported presumptions allowing management interlocks when a bank is in troubled condition or is chartered for less than two years, but encouraged the agencies to ensure competition is preserved;

Supported the adoption of a "small market share exemption" that would allow two unaffiliated depository institutions to share officers or directors, provided they do not control more than 20 percent of the deposits in any one market; and urged the agencies to include thrift and credit union deposits in calculating these limits. …