Does anyone know how "Internet deposit services" is defined by the FDIC for the proposed rule requiring an IDI to post, prominently, a copy of the notice in the lobby of its main office, in each domestic branch and, if it offers Internet deposit services, on its Web site?

This is from the FAQ's on the FDIC's website:

For institutions that offer internet banking services, does the entire transaction account guarantee program disclosure have to appear on a bank's homepage (or other website that accesses online banking services), or can the institution simply add a link on the homepage that takes accountholders to an appropriate disclosure?

Internet deposit services are defined broadly to include not only deposit taking, but any activity related to a deposit account, such as the ability to pay bills, transfer funds, view account balances, or obtain any account specific information. "Internet deposit services," "online banking services," and "internet banking services" are used interchangeably in these questions and answers. Consistent with the requirements of the Final Rule, the bank's homepage and/or other access point to online banking services must contain the disclosure that the bank is (is not) participating in the transaction account guarantee program. Following such disclosure of participation, an appropriately titled link to additional disclosures would be acceptable. A link titled simply "transaction account guarantee program" does not ensure that accountholders will see the required disclosure. A link titled "FDIC insurance" is even more deficient in that the FDIC transaction account guarantee program does not involve FDIC insurance. Something like "Important disclosures regarding the guarantee program" would seem to be appropriate.

when do the notices have to go out?

The PROPOSED regulation section 330.16 includes requirements for three different forms of notice, one of which is a lobby notice for all insured banks, the second of which would be sent by TAG-participating banks by 12/31/10 to its customers as of that date who have accounts guaranteed under the TAG program. The third is a notice that would be given or sent to customers with non-interest paying DDA accounts if a change made by the bank under a sweep program or to account contracts (such as paying interest on DDAs after 7/21/11) any time between 12/31/10 and 12/31/13) that will change the insurance coverage of the DDA account.
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I'm guessing that FDIC will want banks to notify DDA customers with full coverage in advance of the 12/31/13 sunset date, although that's not seen in the proposed rules.

that's what I thought - thanks John!

After seeing the final rule this morning, wondering when others plan to start posting their main office, branch, and website notices? Sooner or closer to Dec. 31?

I think it would be wise to wait until 12/31 gets closer.

I am wondering if allowed to place this notice in customer statement or required a direct mailing to the customer?

Juby - did the final rule come out? Would you point me to it, please?

The final rule was just release today. It's on the FDIC website

The mailing requirement is to NOW and IOTA customers that were covered under the TAGP advising them that their funds are now subject to the $250,000 general insurance coverage.

The other mailing requirement is to customers to notify them of any action that may affect the coverage. For example, if your bank decides to pay interest on business accounts, which they will be allowed to due effective 7/21/11, then the bank would have to notify the customers that their funds would be subject to the $250,000 general insurance coverage.

SO bottom line:

1. Have to send to Iolta and Now accounts
2. Need a Lobby and/or Website sign using model language
3. If applcable, notices to DDA if this is a change for them.

Does this sound right?

Yes.

We are having a discussion regarding the required mailing to NOW and IOLTA customers. In the esence of time, Management wants mail the verbiage required for the lobby notice.

Is anyone else doing this? Would this be compliant?

Here's the rule. http://www.fdic.gov/news/board/Nov9no4.pdf

Here's an FDIC FIL about the rule. http://www.fdic.gov/news/news/financial/2010/fil10076.html

Does anyone have a bill number for the legislation that the FDIC said some commenters mentioned was pending in Congress that might amend the FDIC Act to have the definition of noninterest-bearing transaction accounts include IOLTAs?

Compliance4521, the reg specifically states that you can use the lobby notice. Seems like an easy solution.

Yeah, you can use the lobby notice, however, how do you do that if you have customers that have more than one account and on page 23 (bottom paragraph) it specifically says

(2) if depositors have more than one affected account, one notice is sufficient if it identifies all the applicable accounts.

So, it's not a matter of just stuffing this notice in an envelope, we've also got to identify the account(s) that's impacted.

If you put a notice in each account statment I wouldn't think you would need to add the account information. If you were going to only send one notice, then you would need to add all of the accounts impacted.

Has anyone considered a statement message or must it be a separate piece of paper?

It says "by mail", including electronic mail. We are limited on how long our stmt messages can be - so it's not an option for us.

MarieR - The lobby notice already identifies the accounts impacted...so wouldn't this already be taken care of not matter how you mailed it???

Sorry, I am somewhat dense about this

We will post our lobby notice and website on 12/31/2010. OUr customer mailings will occur beginning 11/30/2010, this will ensure notices are received prior to 12/31/2010.

I take it to mean that you have to identify specific accounts not just the general account type.

Here is the language from page 23 of the rule that tells about the required notification to NOW and IOLTA account holders.


Because of the potential depositor confusion about this change in the FDIC's treatment of NOWs and IOLTAs, the final rule requires IDIs currently participating in the TAGP to provide individual notices to depositors with NOW accounts currently protected in full under the TAGP and IOLTAs that those accounts will not be insured under the new temporary insurance category for noninterest-bearing transaction accounts. IDIs are required to provide such notice to applicable depositors by mail no later than December 31, 2010. To comply with this requirement, IDIs may use electronic mail for depositors who ordinarily receive account information in this manner. The notice may be in the form of a copy of the notice required to be posted in IDI main offices, branches and on Websites.

This is exactly what I have planned, and will just send a notice in each statement to cover all. Just have to come up with a plan to those whose statements are suppressed due to eStatements.