FDIC Adopts Rule to Facilitate Payment of Insured Deposits for Large Banks That Fail

The FDIC adopted a final rule regarding recordkeeping requirements that would be used to facilitate the "prompt payment of FDIC-insured deposits when large insured depository institutions fail."

In response to comments received on the initial proposal, the FDIC modified the final rule by:

• bifurcating the recordkeeping requirement to require that a covered institution must ensure that its deposit account records contain the information needed for its IT system to be able to calculate deposit insurance coverage for qualified deposit accounts within 24 hours of a failure;

• permitting a covered institution to meet alternative, instead of general, recordkeeping requirements with respect to certain types of deposit accounts; and

• extending the proposed two-year timeframe for implementation of its IT system and recordkeeping requirements to three years after the effective date.

The final rule is effective on April 1, 2017.