This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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Rules and Regulations Federal Register

47711 

Vol. 74, No. 179 

Thursday, September 17, 2009 

1Public Law 110–343 (Oct. 3, 2008). 

2 73 FR 61658 (Oct. 17, 2008). 

3Public Law 111–22 (May 20, 2009). 4 73 FR 56706 (Sept. 30, 2008). 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Parts 330 and 347 

RIN 3064–AD36 

Deposit Insurance Regulations; 

Temporary Increase in Standard 

Coverage Amount; Mortgage Servicing 

Accounts; Revocable Trust Accounts; 

International Banking; Foreign Banks 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Final rule. 

SUMMARY: The FDIC is adopting a final 

rule amending its deposit insurance 

regulations to: Reflect Congress’s 

extension, until December 31, 2013, of 

the temporary increase in the standard 

maximum deposit insurance amount 

(‘‘SMDIA’’) from $100,000 to $250,000; 

finalize the interim rule, with minor 

modifications, on revocable trust 

accounts; and finalize the interim rule 

on mortgage servicing accounts. The 

FDIC is also adopting technical, 

conforming amendments to its 

international banking regulations to 

substitute several existing references to 

‘‘$100,000’’ with references to the 

SMDIA. 

DATES: Effective Date: The final rule is 

effective October 19, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Joseph A. DiNuzzo, Counsel, Legal 

Division (202) 898–7349; Christopher 

Hencke, Counsel, Legal Division (202) 

898–8839; Daniel G. Lonergan, Counsel, 

Legal Division (202) 898–6791; or James 

V. Deveney, Section Chief, Deposit 

Insurance Section, Division of 

Supervision and Compliance (202) 898– 

6687, Federal Deposit Insurance 

Corporation, Washington, DC 20429. 

SUPPLEMENTARY INFORMATION: 

Overview 

In the last quarter of 2008, the FDIC 

issued interim rules on three depositinsurance related matters: (1) The 

temporary increase in the SMDIA from 

$100,000 to $250,000; (2) revisions to 

the rules on revocable trust accounts; 

and (3) revisions to the rules on 

mortgage servicing accounts. In this 

final rule, the FDIC is amending its 

insurance regulations to reflect 

Congress’s extension of the temporary 

increase in the SMDIA (from $100,000 

to $250,000) through December 31, 

2013, and finalizing the interim rules on 

revocable trust accounts and mortgage 

servicing accounts. The four-year 

extension of the increase in the SMDIA, 

which necessitates revisions to the 

deposit insurance regulations and 

examples therein, also affords the FDIC 

with the opportunity to now make 

technical amendments to the FDIC’s 

international banking regulations (12 

CFR Part 347) to replace several 

references therein to a ‘‘$100,000’’ 

benchmark with references to the 

SMDIA, consistent with the Federal 

Deposit Insurance Reform Conforming 

Amendments Act of 2005 (Pub. L. 109– 

173). 

I. Extension of Temporary Increase in 

the SMDIA 

Background 

The Emergency Economic 

Stabilization Act of 2008 temporarily 

increased the SMDIA from $100,000 to 

$250,000, effective October 3, 2008, 

through December 31, 2009.1 On 

October 17, 2008, the FDIC adopted an 

interim rule amending its deposit 

insurance regulations to reflect this 

temporary increase in the SMDIA.2

Subsequent to the issuance of this 

interim rule, on May 20, 2009, the 

President signed the Helping Families 

Save Their Homes Act of 2009, which, 

among other provisions, extended the 

temporary increase in the SMDIA from 

December 31, 2009 to December 31, 

2013.3 After December 31, 2013, the 

SMDIA will, by law, return to $100,000. 

The Final Rule 

The final rule amends the FDIC’s 

deposit insurance rules (12 CFR Part 

330) to indicate that the increase in the 

SMDIA from $100,000 to $250,000 is 

effective through December 31, 2013. In 

light of this long-term extension of the 

SMDIA, the FDIC also has updated the 

deposit insurance coverage examples 

provided in the insurance rules to 

reflect $250,000 as the SMDIA. The 

FDIC believes this will help to avoid 

any confusion that might result among 

depositors and financial institution 

employees if the examples continue to 

employ the $100,000 SMDIA and 

related numerical values. 

II. Deposit Insurance Coverage of 

Revocable Trust Accounts 

The Interim Revocable Trust Account 

Rule 

In September 2008, the FDIC issued 

an interim rule designed to make the 

coverage rules for revocable trust 

accounts easier to understand and 

apply.4 In particular, the interim rule 

eliminated the concept of ‘‘qualifying 

beneficiaries.’’ The elimination of the 

‘‘qualifying beneficiary’’ concept was 

intended to achieve greater fairness by 

broadening the scope of eligible 

beneficiaries and facilitate deposit 

insurance determinations on revocable 

trust accounts. 

Also, the interim rule provided a twopart deposit insurance coverage 

calculation method for revocable trust 

accounts. Under the rule, where a trust 

account owner has five times the 

SMDIA ($1,250,000) or less in revocable 

trust accounts at one FDIC-insured 

institution, the owner is insured up to 

the SMDIA ($250,000) per beneficiary— 

without regard to the exact beneficial 

interest of each beneficiary in the trust. 

For a revocable trust account owner 

with both more than $1,250,000 and 

more than five different beneficiaries 

named in the trust(s), the interim rule 

insures the owner for the greater of 

either: $1,250,000, or the aggregate total 

of all the beneficiaries’ actual interests 

in the trust(s) limited to $250,000 for 

each beneficiary. 

In addition, the interim rule sought to 

simplify the application of the deposit 

insurance rules to both life-estate 

interests and to irrevocable trusts 

springing from a revocable trust. The 

interim rule simplified the deposit 

insurance coverage rules to deem the 

value of each life estate interest to be the 

SMDIA amount. Thus, for example, 


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47712 Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 

5For example, assume that account owner ‘‘A’’ 

establishes a living trust that names three children 

as beneficiaries. Assume also that the trust 

agreement specifies that the revocable trust shall 

become an irrevocable trust upon the owner’s 

(grantor’s) death. In this example, during the life of 

the owner, the insurance coverage of an account in 

the name of the trust would be determined by 

multiplying the number of beneficiaries (3) by the 

SMDIA ($250,000). Thus, the account would be 

insured up to $750,000. Following the death of the 

owner, however, the coverage would change 

because the trust itself would change from a 

revocable trust to an irrevocable trust. Under the 

prior rules, the coverage of an irrevocable trust 

account would depend upon whether the interests 

of the beneficiaries were contingent (for example, 

contingent upon graduating from college or 

contingent upon the discretion of the trustee). 

Assuming that all beneficial interests were 

contingent, the coverage of the account would be 

$250,000. Thus, in this example, the coverage 

would decrease from $750,000 to $250,000 

following the death of the owner (and following the 

expiration of the FDIC’s six-month grace period). 6The reserve ratio is determined by dividing the 

DIF fund balance by the estimated insured deposits 

by the industry, 12 U.S.C. 1817(1). 

where the owner creates a living trust 

account and provides a life estate 

interest for the owner’s spouse, in 

addition to specific bequests to named 

beneficiaries, the spousal interest is 

deemed to be the SMDIA. 

Another complication is presented 

when an irrevocable living trust springs 

from a revocable trust upon the owner’s 

death. Under the prior rules, the 

coverage of the trust account often 

would decrease because the FDIC’s rules 

governing irrevocable trust accounts 

were stricter than the rules governing 

revocable trust accounts.5 To prevent 

this decrease in coverage, the interim 

rule provided that irrevocable trust 

accounts would be governed by the 

same rules as revocable trust accounts 

when the irrevocable trust is created 

through the death of the owner (grantor) 

of a revocable living trust. 

Finally, the interim rule solicited 

specific comment on the effect that the 

revocable trust simplifications 

enunciated in the interim rule might 

have on the Deposit Insurance Fund 

(‘‘DIF’’) reserve ratio.6

The FDIC solicited comment on all 

aspects of the interim rule, and 

explicitly solicited comment on: (1) 

Whether the $1,250,000 threshold is a 

proper benchmark for distinguishing 

coverage for revocable trust owners 

based on the beneficial interests of the 

trust beneficiaries; (2) whether the 

FDIC’s irrevocable trust accounts rules 

should be revised in order that all trusts 

are covered by similar rules; and (3) 

what effect the interim rule will have on 

the level of insured deposits. 

Comments Received on the Interim 

Revocable Trust Rule 

The FDIC received eighteen 

comments on the interim rule for 

revocable trust accounts. These 

comments included one from a large 

bank trade association representing all 

types of banks, one from a bank trade 

association representing community 

banks, and one from a smaller trade 

association representing community and 

regional banks, and thrifts, operating in 

one particular State. The FDIC also 

received fourteen comments from 

private citizens and one comment from 

some members of a national trade 

association for lawyers. Overall, these 

comments were highly favorable. 

Eight commenters addressed the 

interim rule’s overall goal of, and 

success at achieving, simplification, and 

applauded the FDIC’s efforts to clarify 

the deposit insurance rules. One 

commenter advocated greater clarity in 

the application of the revocable trust 

rule’s coverage of trust accounts with 

balances exceeding $1,250,000 and 

naming more than five beneficiaries, 

and another generally asserted that the 

rule contained ambiguities. 

With regard to specific issues within 

the interim rule, ten commenters 

expressed strong support for the interim 

rule’s deletion of the former rule’s 

‘‘qualifying beneficiary’’ concept. One 

commenter advocated that the effective 

date of this change be made retroactive 

to an earlier point in time in order to 

provide favorable treatment to 

depositors who had uninsured deposits 

in bank failures occurring in early 2008. 

In response to the FDIC’s specific 

solicitation of comment on the interim 

rule’s use of a $500,000 benchmark 

(presently $1,250,000) for delineating 

separate deposit insurance treatment for 

higher-dollar revocable trust interests, 

five commenters deemed this to be a 

reasonable benchmark, although one 

advocated that the amount be raised 

significantly. One commenter observed 

that because most owners of a revocable 

trust account at an insured depository 

institution will commonly fall below the 

benchmark, the interim rule’s lowerdollar coverage approach—that fails to 

distinguish unequal beneficial 

interests—will simplify coverage. 

In response to the interim rule’s 

specific solicitation of comment 

regarding the Deposit Insurance Fund, 

one commenter suggested that it is 

likely difficult to clearly determine 

whether the interim rule will result in 

a net increase in the level of insured 

deposits. In short, the commenter 

postulated that, while the increase in 

deposit insurance limits and other 

changes made in the interim rule may 

permit more deposits to be deemed 

‘‘insured,’’ it may also be the case that 

the rule’s effect will be to simply permit 

depositors to leave higher account sums 

at one insured depository institution 

instead of having to spread such 

revocable trust deposits over multiple 

institutions. 

Four commenters expressly requested 

that the FDIC clarify the rules regarding 

the proper manner of ‘‘titling’’ a 

payable-on-death (‘‘POD’’) account in 

order to ensure that the revocable trust 

account funds are fully insured. 

Specifically, one citizen commenter 

relayed that she had received conflicting 

advice from numerous local banks as to 

whether or not the title of her revocable 

trust POD account had to expressly 

include the acronym ‘‘POD,’’ the phrase 

‘‘in trust for’’ (‘‘ITF’’), or whether it had 

to include the name of a beneficiary in 

the title, either along with, or without, 

such acronyms. The commenter was 

unsure whether current FDIC rules 

deem it sufficient that the other account 

records at the depository institution 

contain this information. This 

commenter advocated that the burden 

should not fall on the public to learn 

and clarify the titling rules. Another 

commenter advocated eliminating the 

requirement that the POD account title 

contain the POD/ITF designation, and 

asserted that it should be sufficient that 

the owner’s account records at the bank 

reflect the beneficiaries. A third 

commenter expressed the view that 

banks appear to take different 

approaches to titling these accounts and 

recommended uniform rules to address 

this titling issue. Two of these 

commenters suggested that some banks’ 

software does not easily permit the 

addition of ‘‘POD’’ or ‘‘ITF’’ to account 

titles. One bank trade association 

observed that the purpose of the account 

titling requirement is to facilitate FDIC 

staff’s ability, at resolution, to quickly 

determine deposit insurance eligibility, 

and asked whether a bank’s utilization 

of a computer code in the title to denote 

account ownership could be deemed 

sufficient to meet the revocable trust 

account titling requirements. On a 

separate titling issue, one commenter 

asked that the FDIC clarify that an 

owner may, in naming a POD account, 

name a revocable trust as a beneficiary. 

The FDIC expressly solicited 

comment on whether the FDIC’s 

irrevocable trust account rules should 

be revised so that all trusts are covered 

by substantially the same rules. Four 

comments addressed the interim rule’s 

continuing application of the revocable 

trust rules to a living trust after the 

death of the owner (and 

notwithstanding the fact that such trust 

converts to an irrevocable trust upon 

such event), and all commented 

favorably. These commenters also urged 

that the deposit insurance rules for 


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Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 47713 

7 73 FR 61658 (Oct. 17, 2008). 

irrevocable and revocable trusts should 

be the same. 

One commenter also expressly 

advocated that the FDIC clarify that 

when a ‘‘sole proprietor’’ is a named 

beneficiary, then the sole proprietor is 

covered by the rule in his or her 

individual capacity. Lastly, one 

commenter recommended that the 

definition of ‘‘non-contingent trust 

interest’’ be expanded to include the 

interest of a discretionary beneficiary 

and presumptive remainderman of a 

discretionary trust. 

The Final Revocable Trust Rule 

The final rule closely follows the 

interim rule, with minor revisions. 

Notably, in light of the statutory 

extension of the temporary increase in 

the SMDIA, the final rule reflects the 

new $250,000 SMDIA, the new 

$1,250,000 benchmark for revocable 

trust account coverage following this 

change, and revised examples 

employing both of these dollar values 

and revised values for the hypothetical 

sums within the examples to enhance 

their illustrative utility. We also have 

provided additional examples 

illustrating how the revised rules would 

apply. Pursuant to statute, December 31, 

2013 is the ending date for the $250,000 

SMDIA, and after this date the SMDIA 

will revert to $100,000. At that time the 

FDIC will revisit the need to revise these 

limits and examples. 

In response to several specific 

questions raised by commenters about 

the titling requirements for revocable 

trust accounts, clarifying language has 

been incorporated into the final rule to 

address titling of revocable trust 

accounts. Simply, the rule provides that, 

for revocable trust accounts, ‘‘title’’ 

includes an insured depository 

institution’s electronic deposit account 

records. In addressing this issue, the 

FDIC is retaining the requirement that 

the title of a revocable trust account 

identify the account as such in order to 

qualify for coverage under the revocable 

trust account rules; however, the final 

rule clarifies that the FDIC will consider 

information in an insured depository 

institution’s electronic deposit account 

records to determine if the titling 

requirement is satisfied. For example, 

the FDIC would recognize an account as 

a revocable trust account even if the 

account signature card does not 

designate the account as a revocable 

trust account as long as the institution’s 

electronic deposit account records 

identify (through a code or otherwise) 

the account as a revocable trust account. 

The final rule, like the interim rule, 

eliminates the concept of ‘‘qualifying 

beneficiaries,’’ and requires only that a 

revocable trust beneficiary be a natural 

person, or a charity or other non-profit 

organization. This change was 

universally applauded by commenters 

to the interim rule. The final rule also 

incorporates the interim rule’s two-part 

calculation method for deposit 

insurance coverage of revocable trust 

accounts. While, as a result of the 

temporary increase in the SMDIA, the 

benchmark between the lower-dollar 

and higher-dollar revocable trust 

deposit insurance treatments has 

increased to $1,250,000 (from $500,000 

as set forth in the originally-issued 

interim rule), it is anticipated that the 

lower-balance treatment for revocable 

trust ownership interests falling below 

$1,250,000 at one institution will likely 

capture most revocable trust accounts, 

and this should advance the FDIC’s 

goals of simplifying the treatment of 

unequal beneficial interests and 

quickening deposit insurance coverage 

determinations. The deposit insurance 

coverage calculation method for 

revocable trust ownership interests that 

are both above this $1,250,000 

benchmark and involve more than five 

beneficiaries, consistent with the 

interim rule, will ensure that reasonable 

limits remain on the maximum coverage 

available to revocable trust account 

owners and avoid the potential of 

unlimited coverage being afforded to 

such accounts through contrived trust 

structures. Moreover, consistent with 

the interim rule, where a POD account 

owner names his or her living trust as 

a beneficiary of the POD account, for 

insurance purposes, the FDIC will 

consider the beneficiaries of the trust to 

be the beneficiaries of the POD account. 

III. Mortgage Servicing Accounts 

Background 

The FDIC’s deposit insurance 

regulations include specific rules 

addressing the deposit insurance 

coverage of payments collected by 

mortgage servicers and deposited in 

accounts at insured depository 

institutions (‘‘mortgage servicing 

accounts’’). 12 CFR 330.7(d). Accounts 

maintained by mortgage servicers in a 

custodial or other fiduciary capacity 

may include funds paid by mortgagors 

(borrowers) for principal and interest, 

and may also include funds mortgagors 

advance as amounts held for the 

payment of taxes and insurance 

premiums. 

Historically, under section 330.7(d), 

funds representing principal and 

interest payments in a mortgage 

servicing account were insured for the 

interest of each owner (mortgagee, 

investor or security holder) in those 

accounts. On the other hand, funds 

maintained by a servicer in a custodial 

or fiduciary capacity representing 

payments by mortgagors of taxes and 

insurance premiums are added together 

and insured for the ownership interest 

of each mortgagor in those accounts. 

Thus, funds representing payments of 

principal and interest were insurable on 

a pass-through basis to each mortgagee, 

investor, or security holder, while funds 

representing payments of taxes and 

insurance have been insurable on a 

pass-through basis to each mortgagor or 

borrower. This treatment was consistent 

with the FDIC’s longstanding view, 

dating from the adoption of the rules, 

that principal and interest funds are 

owned by the owners (or mortgagee, 

investor or security holder) on whose 

behalf the servicer, as agent, accepts the 

principal and interest payments, and are 

not funds owned by the borrowers. 

Taxes and insurance funds, on the other 

hand, are insured to the mortgagors or 

borrowers under the view that the latter 

funds are still owned by the borrower 

until the servicer actually pays the tax 

and insurance bills. 

In October of last year, the FDIC 

issued an interim rule addressing the 

insurance coverage of mortgage 

servicing accounts.7 In the interim rule, 

the FDIC acknowledged that 

securitization methods for mortgages 

have become increasingly complex, 

with multi-layer securitization 

structures possible, and indicated that 

as a consequence it has become both 

more difficult and time-consuming for a 

servicer to identify and determine the 

share of any investor in a securitization 

and in the principal and interest funds 

on deposit at an insured depository 

institution. Prior to the issuance of the 

interim rule, the FDIC had become 

increasingly concerned that, in the 

event of a failure of an FDIC-insured 

depository institution, a servicer 

holding a deposit account in the 

institution would have a difficult and 

time-consuming task to identify every 

security holder in the securitization and 

determine his or her share. Further, the 

FDIC believed that application of the 

prior deposit insurance rule could result 

in delays in the servicer receiving the 

insured amounts, and result in losses for 

amounts that, due to the complexity of 

the securitization agreements, could not 

be attributed to the particular investors 

to whom the funds belong. Ultimately, 

because the FDIC concluded that 

application of the previous rule could 

potentially result in increased losses to 

otherwise insured depositors, lead to 

withdrawal of deposits for principal and 


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47714 Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 

interest payments from depository 

institutions, and unnecessarily reduce 

liquidity for such institutions, the FDIC 

issued the interim rule. 

In issuing the interim rule, the FDIC 

sought to make the deposit insurance 

coverage rules for mortgage servicing 

accounts easy to understand and apply. 

Moreover, because the considerable sum 

of principal and interest funds on 

deposit at insured depository 

institutions serve as a significant source 

of liquidity for the institutions and a 

source of credit to the institutions’ 

respective communities, the FDIC 

sought to prevent the application of the 

insurance rules from prompting any 

inadvertent, adverse consequences. To 

address these aims, as well as the 

practical issues presented by 

increasingly complex securitization 

methods, the interim rule determined 

deposit insurance coverage on principal 

and interest payments in a mortgage 

servicing account on a per-mortgagor (or 

per-borrower) basis—and not on a passthrough basis to each mortgagee, 

investor, or security holder—due to the 

fact that servicers are able to identify 

mortgagors more quickly than investors. 

This approach enables the FDIC to pay 

deposit insurance more quickly. 

Specifically, the interim rule provided 

deposit insurance coverage to a 

mortgage servicing account based on 

each mortgagor’s payments of principal 

and interest into the account up to the 

standard maximum deposit insurance 

amount of $250,000 per mortgagor. 

Coverage is thus provided to the 

mortgagees/investors as a collective 

group, based on the cumulative amount 

of the mortgagors’ payments of principal 

and interest into the account. This 

deposit insurance coverage of payments 

of principal and interest per mortgagor 

is not aggregated with, nor otherwise 

affects, the coverage provided to each 

such mortgagor in other accounts the 

mortgagor might maintain at the same 

depository institution. This is to be 

distinguished from the deposit 

insurance coverage afforded to 

payments of taxes and insurance 

premiums. Consistent with their 

treatment historically under the deposit 

insurance rules, amounts in a mortgage 

servicing account that represent 

payments for taxes and insurance are 

insured on a pass-through basis as the 

funds of each respective mortgagor, but 

unlike a mortgagor’s principal and 

interest payments in the mortgage 

servicing account, the payments for 

taxes and insurance are added to other 

individually owned funds of each 

mortgagor at the same institution and 

insured up to the applicable limit. 

Comments on the Interim Rule’s 

Mortgage Servicing Provisions 

The FDIC received five comments on 

the interim rule addressing the deposit 

insurance coverage of mortgage 

servicing accounts. All five comments 

favored the interim rule’s handling of 

deposit insurance coverage on payments 

of principal and interest in a mortgage 

servicing account on a per-mortgagor (or 

per-borrower) basis. These views 

included comments from a large bank 

trade association, a loan servicer, a large 

government sponsored enterprise, a loan 

securitization professional, along with 

one comment submitted by a national 

bank. Although all five commenters 

supported the FDIC’s interim rule, 

several raised specific issues. 

One commenter advocated that the 

regulations clarify that payments of 

taxes and insurance in mortgage 

servicing accounts and ‘‘any similar 

accounts’’ held by a servicer or paying 

agent should not be aggregated with 

personal accounts of a mortgagor, and 

noted that the interim rule was ‘‘not 

clear’’ in this regard. Two commenters 

urged the FDIC to apply the interim 

rule’s treatment of principal and interest 

payments comprising mortgage 

servicing accounts to other types of 

servicing accounts that similarly consist 

of principal and interest payments but 

for non-mortgage loans, such as motor 

vehicle loans. In short, they suggested 

that the FDIC extend the interim rule’s 

treatment of principal and interest cash 

flows to other types of loan 

securitizations and not simply 

mortgages, and suggested that these 

sums may raise liquidity concerns 

similar to those raised by mortgage loan 

servicing account funds. 

Another commenter supported the 

interim rule but expressed concern that 

several types of mortgage servicing 

deposits might not be adequately 

insured. For example, this commenter 

advocated that the rules provide passthrough deposit insurance coverage, on 

a per-borrower basis, to other types of 

mortgage servicing funds, such as 

‘‘repair escrows, replacement reserve 

escrows, bond related escrow accounts, 

rental achievement escrows, and debt 

service escrows.’’ This commenter urged 

the FDIC to separately insure such 

accounts, as well as escrows for taxes 

and insurance, up to the SMDIA. 

The Final Rule on Mortgage Servicing 

Accounts 

The final rule is essentially 

unchanged from the interim rule. 

Although one commenter urged that the 

FDIC clarify in the rules that payments 

of taxes and insurance in mortgage 

servicing accounts and any ‘‘similar’’ 

accounts held by a servicer should not 

be aggregated with personal accounts of 

a mortgagor, and asserted that the 

interim rule was ‘‘not clear’’ in this 

regard, the FDIC concludes that any 

additional clarification is unneeded. 

The interim rule expressly addressed 

this issue with respect to tax and 

insurance payments in servicing 

accounts, and specifically contrasted the 

deposit insurance treatment of 

payments of taxes and insurance with 

the insurance treatment afforded 

payments of principal and interest in 

servicing accounts. The interim rule 

provided that the FDIC’s historical 

treatment of taxes and insurance 

payments had not changed. Drawing a 

clear distinction with principal and 

interest payments, the interim rule 

provided that taxes and insurance funds 

are instead ‘‘insured to the mortgagors 

or borrowers on the theory that the 

borrower still owns the funds until the 

tax and insurance bills are actually paid 

by the servicer.’’ 

The preamble to the interim rule 

indicated that, although the principal 

and interest payments in mortgage 

servicing accounts are not aggregated for 

insurance purposes with other accounts 

the mortgagor might maintain at the 

same insured depository institution, 

‘‘[a]s under the current insurance rules, 

under the interim rule amounts in a 

mortgage servicing account constituting 

payments of taxes and insurance 

premiums will be insured on a passthrough basis as the funds of each 

respective mortgagor,’’ and such funds 

‘‘will be added to other individually 

owned funds held by each such 

mortgagor at the same insured 

institution.’’ This was also made clear in 

the FDIC’s Financial Institution Letter, 

FIL–111–2008, issued October 8, 2008. 

In short, the interim rule did not alter 

the FDIC’s historical treatment of 

payments by mortgagors of tax and 

insurance premiums in mortgage 

servicing accounts. 

It was also suggested that the FDIC 

extend the interim rule’s deposit 

insurance treatment of principal and 

interest cash flows to servicing accounts 

for other types of loan securitizations— 

and not simply mortgages—such as 

motor vehicle loans. The FDIC declines 

to do so. As noted in the interim rule, 

the FDIC sought to address the 

increasing complexity of mortgage 

securitizations and the resulting impact 

these complexities have upon depositor 

certainty as to the application of deposit 

insurance rules, and have upon the 

timely resolution of deposit insurance 

determinations. 


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Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 47715 

8Per statute, the Reform Conforming Act 

substitution of the SMDIA in the international 

banking provisions was effective on April 1, 2006. 

Reform Conforming Act § 2; 71 FR 14629 (March 23, 

2006). 

The FDIC also declines the 

commenter suggestion that separate 

insurance, on a pass-through, perborrower basis be afforded to other 

types of mortgage servicing funds such 

as ‘‘repair escrows, replacement reserve 

escrows, bond related escrow accounts, 

rental achievement escrows, and debt 

service escrows.’’ As the FDIC noted in 

the interim rule, consistent with its 

previous deposit insurance rules, 

amounts in a mortgage servicing 

account constituting payments of taxes 

and insurance premiums are insured on 

a pass-through basis as the funds of each 

respective mortgagor and are added to 

other individually owned funds held by 

each such mortgagor at the same insured 

institution. The FDIC’s interim rule 

sought to make the deposit insurance 

coverage rules for mortgage servicing 

accounts easy to understand and apply. 

Additionally, because principal and 

interest funds on deposit at insured 

depository institutions serve as both a 

significant source of liquidity for the 

institutions and a significant source of 

credit to the institution’s community, 

the FDIC sought to ensure that no 

inadvertent adverse consequences 

resulted from the application of the 

deposit insurance rules. It is not clear 

that the suggested revisions would be 

consistent with either of these aims. 

Although commenter[s] suggested that 

other types of ‘‘escrow’’ funds should 

garner similar treatment under the 

insurance rules as do deposits 

representing tax and insurance 

payments, the comment does not clearly 

identify in what specific manner the 

legal rights and obligations attendant to 

these various types of bond-related, debt 

service, and rental achievement escrows 

are similar to the rights and obligations 

of mortgagors in their tax and insurance 

payments. Nor is it clear whether, and 

to what extent, such payments represent 

a significant liquidity source for 

depository institutions such that the 

need for more specific clarity as to 

deposit insurance is needed in order to 

avert any inadvertent consequences or 

losses to borrowers or investors. 

IV. Technical Amendments to FDIC 

International Banking Regulations 

The FDIC is also amending its Part 

347 International Banking regulations to 

make technical, conforming 

amendments relating to the SMDIA. The 

FDI Reform Act introduced the term 

‘‘SMDIA’’ and instituted several 

substantive changes to the deposit 

insurance coverage provisions in the 

FDI Act. Additionally, the Federal 

Deposit Insurance Reform Conforming 

Amendments Act of 2005 (‘‘Reform 

Conforming Act’’), Public Law 109–173, 

amended the International Banking Act 

of 1978, 12 U.S.C. 3104, necessitating 

the need for technical conforming 

amendments to substitute the term 

‘‘SMDIA’’ in place of ‘‘$100,000’’ in the 

FDIC’s International Banking 

regulations. 12 CFR Part 347.8 The fouryear extension in the increase in the 

SMDIA, which provides the FDIC with 

the necessity to make revisions to the 

deposit insurance regulations and 

examples therein, also affords the FDIC 

with the opportunity to now make 

technical amendments to the FDIC’s 

international banking regulations to 

replace several distinct references to a 

‘‘$100,000’’ benchmark with references 

to the SMDIA, consistent with the 

Reform Conforming Act. 

V. Paperwork Reduction Act 

The final rule will revise the FDIC’s 

deposit insurance regulations. It will not 

involve any new collections of 

information pursuant to the Paperwork 

Reduction Act (44 U.S.C. 3501 et seq.). 

Consequently, no information collection 

has been submitted to the Office of 

Management and Budget for review. 

VI. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

requires an agency that is issuing a final 

rule to prepare and make available a 

regulatory flexibility analysis that 

describes the impact of the final rule on 

small entities. 5 U.S.C. 603(a). The 

Regulatory Flexibility Act provides that 

an agency is not required to prepare and 

publish a regulatory flexibility analysis 

if the agency certifies that the final rule 

will not have a significant impact on a 

substantial number of small entities. 

Pursuant to section 605(b) of the 

Regulatory Flexibility Act, the FDIC 

certifies that the final rule will not have 

a significant impact on a substantial 

number of small entities. The final rule 

implements the temporary increase in 

the SMDIA, simplifies the coverage 

rules for mortgage servicing accounts, 

and simplifies the deposit insurance 

rules for revocable trust accounts held at 

FDIC-insured depository institutions. 

VII. The Treasury and General 

Government Appropriations Act, 

1999—Assessment of Federal 

Regulations and Policies on Families 

The FDIC has determined that the 

final rule will not affect family wellbeing within the meaning of section 654 

of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681). 

The final rule should have a positive 

effect on families by clarifying the 

coverage rules for mortgage servicing 

accounts, which contain, for a period of 

time, the mortgage payments from 

borrowers, and the rules for revocable 

trust accounts, a popular type of 

consumer bank account. 

VIII. Small Business Regulatory 

Enforcement Fairness Act 

The Office of Management and Budget 

has determined that the final rule is not 

a ‘‘major rule’’ within the meaning of 

the relevant sections of the Small 

Business Regulatory Enforcement Act of 

1996 (‘‘SBREFA’’) (5 U.S.C. 801 et seq.). 

As required by SBREFA, the FDIC will 

file the appropriate reports with 

Congress and the General Accounting 

Office so that the final rule may be 

reviewed. 

IX. Plain Language 

Section 722 of the Gramm-LeachBlilely Act (Pub. L. 106–102, 113 Stat. 

1338, 1471), requires the Federal 

banking agencies to use plain language 

in all proposed and final rules 

published after January 1, 2000. The 

FDIC has sought to present the final rule 

in a simple and straightforward manner, 

and has made revisions to the previous 

interim rule in response to commenter 

concerns seeking clarification of the 

application of the deposit insurance 

rules. 

List of Subjects 

12 CFR Part 330 

Bank deposit insurance, Banks, 

Banking, Reporting and recordkeeping 

requirements, Savings and loan 

associations, Trusts and trustees. 

12 CFR Part 347 

Bank deposit insurance, Banks, 

Banking, International banking; Foreign 

banks. 

■ For the reasons stated above, the 

Board of Directors of the Federal 

Deposit Insurance Corporation hereby 

amends parts 330 and 347 of title 12 of 

the Code of Federal Regulations as 

follows: 

PART 330—DEPOSIT INSURANCE 

COVERAGE 

■ 1. The authority citation for part 330 

continues to read as follows: 

Authority: 12 U.S.C. 1813(1), 1813(m), 

1817(i), 1818(q), 1819 (Tenth), 1820(f), 

1821(a), 1822(c). 


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47716 Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 

■ 2. In § 330.1, paragraph (n) is revised 

to read as follows: 

§ 330.1 Definitions. 

* * * * * 

(n) Standard maximum deposit 

insurance amount, referred to as the 

‘‘SMDIA’’ hereafter, means $250,000 

from October 3, 2008, until December 

31, 2013. Effective January 1, 2014, the 

SMDIA means $100,000 adjusted 

pursuant to subparagraph (F) of section 

11(a)(1) of the FDI Act (12 U.S.C. 

1821(a)(1)(F)). All examples in this part 

use $250,000 as the SMDIA. 

* * * * * 

■ 3. In § 330.7, paragraph (d) is revised 

to read as follows: 

§ 330.7 Account held by an agent, 

nominee, guardian, custodian or 

conservator. 

* * * * * 

(d) Mortgage servicing accounts. 

Accounts maintained by a mortgage 

servicer, in a custodial or other 

fiduciary capacity, which are comprised 

of payments by mortgagors of principal 

and interest, shall be insured for the 

cumulative balance paid into the 

account by the mortgagors, up to the 

limit of the SMDIA per mortgagor. 

Accounts maintained by a mortgage 

servicer, in a custodial or other 

fiduciary capacity, which are comprised 

of payments by mortgagors of taxes and 

insurance premiums shall be added 

together and insured in accordance with 

paragraph (a) of this section for the 

ownership interest of each mortgagor in 

such accounts. This provision is 

effective as of October 10, 2008, for all 

existing and future mortgage servicing 

accounts. 

* * * * * 

■ 4. In § 330.9, paragraph (b) is revised 

to read as follows: 

§ 330.9 Joint ownership accounts. 

* * * * * 

(b) Determination of insurance 

coverage. The interests of each co-owner 

in all qualifying joint accounts shall be 

added together and the total shall be 

insured up to the SMDIA. (Example: 

‘‘A&B’’ have a qualifying joint account 

with a balance of $150,000; ‘‘A&C’’ have 

a qualifying joint account with a balance 

of $200,000; and ‘‘A&B&C’’ have a 

qualifying joint account with a balance 

of $375,000. A’s combined ownership 

interest in all qualifying joint accounts 

would be $300,000 ($75,000 plus 

$100,000 plus $125,000); therefore, A’s 

interest would be insured in the amount 

of $250,000 and uninsured in the 

amount of $50,000. B’s combined 

ownership interest in all qualifying joint 

accounts would be $200,000 ($75,000 

plus $125,000); therefore, B’s interest 

would be fully insured. C’s combined 

ownership interest in all qualifying joint 

accounts would be $225,000 ($100,000 

plus $125,000); therefore, C’s interest 

would be fully insured. 

* * * * * 

■ 5. Section 330.10 is revised to read as 

follows: 

§ 330.10 Revocable trust accounts. 

(a) General rule. Except as provided in 

paragraph (e) of this section, the funds 

owned by an individual and deposited 

into one or more accounts with respect 

to which the owner evidences an 

intention that upon his or her death the 

funds shall belong to one or more 

beneficiaries shall be separately insured 

(from other types of accounts the owner 

has at the same insured depository 

institution) in an amount equal to the 

total number of different beneficiaries 

named in the account(s) multiplied by 

the SMDIA. This section applies to all 

accounts held in connection with 

informal and formal testamentary 

revocable trusts. Such informal trusts 

are commonly referred to as payable-ondeath accounts, in-trust-for accounts or 

Totten Trust accounts, and such formal 

trusts are commonly referred to as living 

trusts or family trusts. (Example 1: 

Account Owner ‘‘A’’ has a living trust 

account with four different beneficiaries 

named in the trust. A has no other 

revocable trust accounts at the same 

FDIC-insured institution. The maximum 

insurance coverage would be 

$1,000,000, determined by multiplying 

4 times $250,000 (the number of 

beneficiaries times the SMDIA). 

(Example 2: Account Owner ‘‘A’’ has a 

payable-on-death account naming his 

niece and cousin as beneficiaries, and A 

also has, at the same FDIC-insured 

institution, another payable-on-death 

account naming the same niece and a 

friend as beneficiaries. The maximum 

coverage available to the account owner 

would be $750,000. This is because the 

account owner has named only three 

different beneficiaries in the revocable 

trust accounts—his niece and cousin in 

the first, and the same niece and a 

friend in the second. The naming of the 

same beneficiary in more than one 

revocable trust account, whether it be a 

payable-on-death account or living trust 

account, does not increase the total 

coverage amount.) (Example 3: Account 

Owner ‘‘A’’ establishes a living trust 

account, with a balance of $300,000, 

naming his two children ‘‘B’’ and ‘‘C’’ 

as beneficiaries. A also establishes, at 

the same FDIC-insured institution, a 

payable-on-death account, with a 

balance of $300,000, also naming his 

children B and C as beneficiaries. The 

maximum coverage available to A is 

$500,000, determined by multiplying 2 

times $250,000 (the number of different 

beneficiaries times the SMDIA). A is 

uninsured in the amount of $100,000. 

This is because all funds that a 

depositor holds in both living trust 

accounts and payable-on-death 

accounts, at the same FDIC-insured 

institution and naming the same 

beneficiaries, are aggregated for 

insurance purposes and insured to the 

applicable coverage limits.) 

(b) Required intention and naming of 

beneficiaries. (1) The required intention 

in paragraph (a) of this section that 

upon the owner’s death the funds shall 

belong to one or more beneficiaries must 

be manifested in the ‘‘title’’ of the 

account using commonly accepted 

terms such as, but not limited to, ‘‘in 

trust for,’’ ‘‘as trustee for,’’ ‘‘payable-ondeath to,’’ or any acronym therefor. For 

purposes of this requirement, ‘‘title’’ 

includes the electronic deposit account 

records of the institution. (For example, 

the FDIC would recognize an account as 

a revocable trust account even if the title 

of the account signature card does not 

designate the account as a revocable 

trust account as long as the institution’s 

electronic deposit account records 

identify (through a code or otherwise) 

the account as a revocable trust 

account.) The settlor of a revocable trust 

shall be presumed to own the funds 

deposited into the account. 

(2) For informal revocable trust 

accounts, the beneficiaries must be 

specifically named in the deposit 

account records of the insured 

depository institution. 

(c) Definition of beneficiary. For 

purposes of this section, a beneficiary 

includes a natural person as well as a 

charitable organization and other nonprofit entity recognized as such under 

the Internal Revenue Code of 1986, as 

amended. 

(d) Interests of beneficiaries outside 

the definition of beneficiary in this 

section. If a beneficiary named in a trust 

covered by this section does not meet 

the definition of beneficiary in 

paragraph (c) of this section, the funds 

corresponding to that beneficiary shall 

be treated as the individually owned 

(single ownership) funds of the 

owner(s). As such, they shall be 

aggregated with any other single 

ownership accounts of such owner(s) 

and insured up to the SMDIA per 

owner. (Example: Account Owner ‘‘A’’ 

establishes a payable-on-death account 

naming a pet as beneficiary with a 

balance of $100,000. A also has an 

individual account at the same FDICinsured institution with a balance of 


cprice-sewell on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 47717 

$175,000. Because the pet is not a 

‘‘beneficiary,’’ the two accounts are 

aggregated and treated as a single 

ownership account. As a result, A is 

insured in the amount of $250,000, but 

is uninsured for the remaining $25,000.) 

(e) Revocable trust accounts with 

aggregate balances exceeding five times 

the SMDIA and naming more than five 

different beneficiaries. Notwithstanding 

the general coverage provisions in 

paragraph (a) of this section, for funds 

owned by an individual in one or more 

revocable trust accounts naming more 

than five different beneficiaries and 

whose aggregate balance is more than 

five times the SMDIA, the maximum 

revocable trust account coverage for the 

account owner shall be the greater of 

either: five times the SMDIA or the 

aggregate amount of the interests of each 

different beneficiary named in the 

trusts, to a limit of the SMDIA per 

different beneficiary. (Example 1: 

Account Owner ‘‘A’’ has a living trust 

with a balance of $1 million and names 

two friends, ‘‘B’’ and ‘‘C’’ as 

beneficiaries. At the same FDIC-insured 

institution, A establishes a payable-ondeath account, with a balance of $1 

million naming his two cousins, ‘‘D’’ 

and ‘‘E’’ as beneficiaries. Coverage is 

determined under the general coverage 

provisions in paragraph (a) of this 

section, and not this paragraph (e). This 

is because all funds that A holds in both 

living trust accounts and payable-ondeath accounts, at the same FDICinsured institution, are aggregated for 

insurance purposes. Although A’s 

aggregated balance of $2 million is more 

than five times the SMDIA, A names 

only four different beneficiaries, and 

coverage under this paragraph (e) 

applies only if there are more than five 

different beneficiaries. A is insured in 

the amount of $1 million (4 

beneficiaries times the SMDIA), and 

uninsured for the remaining $1 million.) 

(Example 2: Account Owner ‘‘A’’ has a 

living trust account with a balance of 

$1,500,000. Under the terms of the trust, 

upon A’s death, A’s three children are 

each entitled to $125,000, A’s friend is 

entitled to $15,000, and a designated 

charity is entitled to $175,000. The trust 

also provides that the remainder of the 

trust assets shall belong to A’s spouse. 

In this case, because the balance of the 

account exceeds $1,250,000 (5 times the 

SMDIA) and there are more than five 

different beneficiaries named in the 

trust, the maximum coverage available 

to A would be the greater of: $1,250,000 

or the aggregate of each different 

beneficiary’s interest to a limit of 

$250,000 per beneficiary. The beneficial 

interests in the trust for purposes of 

determining coverage are: $125,000 for 

each of the children (totaling $375,000), 

$15,000 for the friend, $175,000 for the 

charity, and $250,000 for the spouse 

(because the spouse’s $935,000 is 

subject to the $250,000 per-beneficiary 

limitation). The aggregate beneficial 

interests total $815,000. Thus, the 

maximum coverage afforded to the 

account owner would be $1,250,000, the 

greater of $1,250,000 or $815,000.) 

(f) Co-owned revocable trust accounts. 

(1) Where an account described in 

paragraph (a) of this section is 

established by more than one owner, the 

respective interest of each account 

owner (which shall be deemed equal) 

shall be insured separately, per different 

beneficiary, up to the SMDIA, subject to 

the limitation imposed in paragraph (e) 

of this section. (Example 1: A and B, 

two individuals, establish a payable-ondeath account naming their three nieces 

as beneficiaries. Neither A nor B has any 

other revocable trust accounts at the 

same FDIC-insured institution. The 

maximum coverage afforded to A and B 

would be $1,500,000, determined by 

multiplying the number of owners (2) 

times the SMDIA ($250,000) times the 

number of different beneficiaries (3). In 

this example, A would be entitled to 

revocable trust coverage of $750,000 and 

B would be entitled to revocable trust 

coverage of $750,000.) (Example 2: A 

and B, two individuals, establish a 

payable-on-death account naming their 

two children, two cousins, and a charity 

as beneficiaries. The balance in the 

account is $1,750,000. Neither A nor B 

has any other revocable trust accounts at 

the same FDIC-insured institution. The 

maximum coverage would be 

determined (under paragraph (a) of this 

section) by multiplying the number of 

account owners (2) times the number of 

different beneficiaries (5) times 

$250,000, totaling $2,500,000. Because 

the account balance ($1,750,000) is less 

than the maximum coverage amount 

($2,500,000), the account would be fully 

insured.) (Example 3: A and B, two 

individuals, establish a living trust 

account with a balance of $3.75 million. 

Under the terms of the trust, upon the 

death of both A and B, each of their 

three children is entitled to $600,000, 

B’s cousin is entitled to $380,000, A’s 

friend is entitled to $70,000, and the 

remaining amount ($1,500,000) goes to 

a charity. Under paragraph (e) of this 

section, the maximum coverage, as to 

each co-owned account owner, would 

be the greater of $1,250,000 or the 

aggregate amount (as to each co-owner) 

of the interest of each different 

beneficiary named in the trust, to a limit 

of $250,000 per account owner per 

beneficiary. The beneficial interests in 

the trust considered for purposes of 

determining coverage for account owner 

A are: $750,000 for the children (each 

child’s interest attributable to A, 

$300,000, is subject to the $250,000-perbeneficiary limitation), $190,000 for the 

cousin, $35,000 for the friend, and 

$250,000 for the charity (the charity’s 

interest attributable to A, $750,000, is 

subject to the $250,000 per-beneficiary 

limitation). As to A, the aggregate 

amount of the beneficial interests 

eligible for deposit insurance coverage 

totals $1,225,000. Thus, the maximum 

coverage afforded to account co-owner 

A would be $1,250,000, which is the 

greater of $1,250,000 or the aggregate of 

all the beneficial interests attributable to 

A (limited to $250,000 per beneficiary), 

which totaled slightly less at 

$1,225,000. Because B has equal 

ownership interest in the trust, the same 

analysis and coverage determination 

also would apply to B. Thus, of the total 

account balance of $3.75 million, $2.5 

million would be insured and $1.25 

million would be uninsured.) 

(2) Notwithstanding paragraph (f)(1) 

of this section, where the owners of a 

co-owned revocable trust account are 

themselves the sole beneficiaries of the 

corresponding trust, the account shall 

be insured as a joint account under 

§ 330.9 and shall not be insured under 

the provisions of this section. (Example: 

If A and B establish a payable-on-death 

account naming themselves as the sole 

beneficiaries of the account, the account 

will be insured as a joint account 

because the account does not satisfy the 

intent requirement (under paragraph (a) 

of this section) that the funds in the 

account belong to the named 

beneficiaries upon the owners’ death. 

The beneficiaries are in fact the actual 

owners of the funds during the account 

owners’ lifetimes.) 

(g) For deposit accounts held in 

connection with a living trust that 

provides for a life-estate interest for 

designated beneficiaries, the FDIC shall 

value each such life estate interest as the 

SMDIA for purposes of determining the 

insurance coverage available to the 

account owner under paragraph (e) of 

this section. (Example: Account Owner 

‘‘A’’ has a living trust account with a 

balance of $1,500,000. Under the terms 

of the trust, A provides a life estate 

interest for his spouse. Moreover, A’s 

three children are each entitled to 

$275,000, A’s friend is entitled to 

$15,000, and a designated charity is 

entitled to $175,000. The trust also 

provides that the remainder of the trust 

assets shall belong to A’s granddaughter. 

In this case, because the balance of the 

account exceeds $1,250,000 ((5) five 


cprice-sewell on DSK2BSOYB1PROD with RULES
47718 Federal Register / Vol. 74, No. 179 / Thursday, September 17, 2009 / Rules and Regulations 

times the SMDIA) and there are more 

than five different beneficiaries named 

in the trust, the maximum coverage 

available to A would be the greater of: 

$1,250,000 or the aggregate of each 

different beneficiary’s interest to a limit 

of $250,000 per beneficiary. The 

beneficial interests in the trust 

considered for purposes of determining 

coverage are: $250,000 for the spouse’s 

life estate, $750,000 for the children 

(because each child’s $275,000 is 

subject to the $250,000 per-beneficiary 

limitation), $15,000 for the friend, 

$175,000 for the charity, and $250,000 

for the granddaughter (because the 

granddaughter’s $310,000 remainder is 

limited by the $250,000 per-beneficiary 

limitation). The aggregate beneficial 

interests total $1,440,000. Thus, the 

maximum coverage afforded to the 

account owner would be $1,440,000, the 

greater of $1,250,000 or $1,440,000.) 

(h) Revocable trusts that become 

irrevocable trusts. Notwithstanding the 

provisions in section 330.13 on the 

insurance coverage of irrevocable trust 

accounts, if a revocable trust account 

converts in part or entirely to an 

irrevocable trust upon the death of one 

or more of the trust’s owners, the trust 

account shall continue to be insured 

under the provisions of this section. 

(Example: Assume A and B have a trust 

account in connection with a living 

trust, of which they are joint grantors. If 

upon the death of either A or B the trust 

transforms into an irrevocable trust as to 

the deceased grantor’s ownership in the 

trust, the account will continue to be 

insured under the provisions of this 

section.) 

(i) This section shall apply to all 

existing and future revocable trust 

accounts and all existing and future 

irrevocable trust accounts resulting from 

formal revocable trust accounts. 

PART 347—INTERNATIONAL 

BANKING 

■ 6. The authority citation for part 347 

continues to read as follows: 

Authority: 12 U.S.C. 1813, 1815, 1817, 

1819, 1820, 1828, 3103, 3104, 3105, 3108, 

3109; Title IX, Pub. L. 98–181, 97 Stat. 1153. 

■ 7. In § 347.202: 

■ A. Paragraph (e) is revised. 

■ B. Paragraphs (v), (w) and (x) are 

redesignated as (w), (x) and (y), 

respectively, and a new paragraph (v) is 

added. 

The revision and addition read as 

follows: 

§ 347.202 Definitions. 

* * * * * 

(e) Domestic retail deposit activity 

means the acceptance by a Federal or 

State branch of any initial deposit of 

less than an amount equal to the 

standard maximum deposit insurance 

amount (‘‘SMDIA’’). 

* * * * * 

(v) Standard maximum deposit 

insurance amount, referred to as the 

‘‘SMDIA’’ hereafter, means $250,000 

from October 3, 2008, until 

December 31, 2013. Effective January 1, 

2014, the SMDIA means $100,000 

adjusted pursuant to subparagraph (F) of 

section 11(a)(1) of the FDI Act (12 U.S.C. 

1821(a)(1)(F)). 

* * * * * 

■ 8. In § 347.206, paragraph (c) is 

revised to read as follows: 

§ 347.206 Domestic retail deposit activity 

requiring deposit insurance by U.S. branch 

of a foreign bank. 

* * * * * 

(c) Grandfathered insured branches. 

Domestic retail accounts with balances 

of less than an amount equal to the 

SMDIA that require deposit insurance 

protection may be accepted or 

maintained in an insured branch of a 

foreign bank only if such branch was an 

insured branch on December 19, 1991. 

* * * * * 

■ 9. In § 347.213, paragraph (a)(1) is 

revised to read as follows: 

§ 347.213 Establishment or operation of 

noninsured foreign branch. 

(a) * * * 

(1) The branch only accepts initial 

deposits in an amount equal to the 

SMDIA or greater; or 

* * * * * 

■ 10. In § 347.215: 

■ A. Paragraph (a) introductory text is 

revised. 

■ B. Paragraph (b)(1) is revised. 

The revisions read as follows: 

§ 347.215 Exemptions from deposit 

insurance requirement. 

(a) Deposit activities not requiring 

insurance. A State branch will not be 

considered to be engaged in domestic 

retail deposit activity that requires the 

foreign bank parent to establish an 

insured U.S. bank subsidiary if the State 

branch accepts initial deposits only in 

an amount of less than an amount equal 

to the SMDIA that are derived solely 

from the following: 

* * * * * 

(b) Application for an exemption. (1) 

Whenever a foreign bank proposes to 

accept at a State branch initial deposits 

of less than an amount equal to the 

SMDIA and such deposits are not 

otherwise exempted under paragraph (a) 

of this section, the foreign bank may 

apply to the FDIC for consent to operate 

the branch as a noninsured branch. The 

Board of Directors may exempt the 

branch from the insurance requirement 

if the branch is not engaged in domestic 

retail deposit activities requiring 

insurance protection. The Board of 

Directors will consider the size and 

nature of depositors and deposit 

accounts, the importance of maintaining 

and improving the availability of credit 

to all sectors of the United States 

economy, including the international 

trade finance sector of the United States 

economy, whether the exemption would 

give the foreign bank an unfair 

competitive advantage over United 

States banking organizations, and any 

other relevant factors in making this 

determination. 

* * * * * 

Dated at Washington, DC, this 9th day of 

September 2009. 

By order of the Board of Directors. 

Robert E. Feldman, 

Executive Secretary, Federal Deposit 

Insurance Corporation. 

[FR Doc. E9–22406 Filed 9–16–09; 8:45 am] 

BILLING CODE 6714–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 73 

[Docket No. FAA–2009–0770; Airspace 

Docket No. 09–ASW–20] 

RIN 2120–AA66 

Amendment to Restricted Areas R– 

5103A, R–5103B, and R–5103C; 

McGregor, NM 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; technical 

amendment. 

SUMMARY: This action amends the 

airspace description of Restricted Areas 

R–5103A, R–5103B, and R–5103C; 

McGregor, NM. In a final rule published 

in the Federal Register on November 3, 

1994, (59 FR 55030), an error was made 

in the airspace description to the time 

of designation for Restricted Areas R– 

5103A, R–5103B, R–5103C and R– 

5103D (R–5130D was subsequently 

revoked on January 20, 2005 (69 FR 

72113)). Specifically, the time of 

designation stated ‘‘0700–2000 local 

time, Monday–Friday, other times by 

NOTAM’’ instead of ‘‘0700–2000 local 

time Monday–Friday; other times by 

NOTAM’’. This action corrects that 

error. 


cprice-sewell on DSK2BSOYB1PROD with RULES