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FDIC Makes Changes to PODs
FDIC has just liberalized its regulations restricting deposit insurance coverage. Two areas are affected: coverage affecting payable on death accounts and joint accounts. The good news is that there is more coverage. FDIC announced the changes on March 23, 1999. They took effect on April 1, 1999, the date they were published in the Federal Register.
The new rule changes the calculation steps for joint account coverage. It uses a one-step calculation. The single step adds the amounts that each individual owns in joint accounts in the same institution together and insures them up to $100,000.
Insurance for joint accounts is in addition to insurance for individually owned accounts. Not only is this calculation easier to do, it will also be easier to explain to customers.
POD accounts now have expanded eligible beneficiaries. In addition to the depositor's spouse, children, and grandchildren, the new rule allows parents and siblings.
If you have been using the FDIC's free tools such as "The Gold Book" for training, EDIE for more training and on-line information for customers, and the free booklets, you can continue to rely on the FDIC. These tools are all being updated to reflect the changes.
If you haven't been using FDIC's resources, start now. Everything is available on their website at www.FDIC.gov.
Copyright © 1999 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 4, 4/99
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