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#1506713 - 02/08/11 06:47 PM FDIC Proposed Rulemaking - Required Training
ChrisseyNJ Offline
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Joined: Feb 2010
Posts: 40
New Jersey
Interested to hear feedback on this goodie --

FDIC Proposes Rule to Require Deposit Insurance Training
The FDIC issued a Notice of Proposed Rulemaking that would require bank employees who open accounts or are authorized to answer deposit insurance questions to complete an annual 2-hour training course on the basics of deposit insurance.

The computer-based course will provided by the FDIC. No recordkeeping would be required of the institution.The proposal also requires insured depository institution staff opening a new account to inquire whether the customer has other accounts at that institution and whether the aggregate deposits may exceed the deposit insurance limit of $250,000. If the customer does not have other accounts at the bank, the employee's obligation under the proposed regulation would end. Otherwise, the employee would have to provide basic literature on deposit insurance coverage, but would not be required to advise depositors on maximizing deposit insurance coverage.

Qualifying current employees would be required to take the training within 60 days of the rule’s effective date. Qualifying new employees would be required to take the training 30 days after commencing employment.

Finally, the rule would require institutions to provide a link to EDIE (FDIC’s deposit insurance coverage resource) on any website it maintains for use by customers.

Comments are due 60 days after publication in the Federal Register.

While not a requirement of the Dodd-Frank Act, the rule is proposed by the FDIC's Division of Supervision and Consumer Protection and impacts banks and depositors.
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#1506732 - 02/08/11 06:59 PM Re: FDIC Proposed Rulemaking - Required Training ChrisseyNJ
Elwood P. Dowd Offline
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Practice your comments on each other, and then tell them. Request for comment

A web site link to EDIE is a no brainer. Every bank should have thought of that before being prompted.
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#1506745 - 02/08/11 07:12 PM Re: FDIC Proposed Rulemaking - Required Training Elwood P. Dowd
ChrisseyNJ Offline
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New Jersey
Hence the lob to the masses here!

I lead our training department; if no recordkeeping is required, how will we know who is due and who isnt? One would presume there will be an annual window in which to comply; opens May 1 closes June 30? "No record keeping" -- cant quite get my head around that one!

The banker process as described just seems silly - They can inform a depositor if about to exceed the threshold, but not advise any further? Will advice on how to structure deposits be prohibited in another rule later? And a banker should provide the FDIC brochure? Will this be another audit exception should a banker have a brochure holder on their desk full of them, but fail to put it in a customers hands?
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#1506749 - 02/08/11 07:15 PM Re: FDIC Proposed Rulemaking - Required Training ChrisseyNJ
RR Joker Offline
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And, last I checked, the brochures were STILL NOT UPDATED! wink
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#1506922 - 02/08/11 09:51 PM Re: FDIC Proposed Rulemaking - Required Training RR Joker
John Burnett Offline
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The "no recordkeeping" statement by the FDIC is just so naive! What ever happened to the wisdom of "if you don't document it, it didn't happen"? Couple "no recordkeeping" with "new hires must complete training within 30 days" and one just has to wonder.

The second leg of this three-legged stool could be so much easier: just require that an FDIC brochure get delivered as part of the new account process. Of course, the FDIC would have to make sure its brochures are actually current.

As for the link to EDIE -- it's the one common-sense piece of the entire proposal.
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#1507100 - 02/09/11 02:37 PM Re: FDIC Proposed Rulemaking - Required Training John Burnett
Georgia Plum
Unregistered

While we do try to help consumers understand the FDIC coverage, the bottom line is, the Bank should not be put in a position of 'advising' consumers on FDIC coverage and where/how to bank their monies. If we do and it's wrong and the customer is not covered, then couldn't the Bank could be held liable? We always give the brochure and the EDIE link to anyone who questions FDIC coverage.

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#1507140 - 02/09/11 03:08 PM Re: FDIC Proposed Rulemaking - Required Training
Irishguy Offline
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Kentucky
I just have to vent over this a bit. Where did personal responsibility go? Why must the big bad banks hold everyone's hand through every single banking process known to man? If law makers are giong to continue to pass this type of legislation, shouldn't they be required to work in a bank for a period of time to see the day to day operations of a bank? When will the insanity stop???????

Ok....I feel a bit better. Thanks for letting me vent.

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#1507208 - 02/09/11 04:17 PM Re: FDIC Proposed Rulemaking - Required Training
Bob The Banker Offline
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Originally Posted By: Georgia Plum
While we do try to help consumers understand the FDIC coverage, the bottom line is, the Bank should not be put in a position of 'advising' consumers on FDIC coverage and where/how to bank their monies. If we do and it's wrong and the customer is not covered, then couldn't the Bank could be held liable? We always give the brochure and the EDIE link to anyone who questions FDIC coverage.

Absolutely it should. It is your responsibility to understand FDIC coverage. Also, as your customer's banker you should advise them to FDIC coverage and how their deposit/loan accounts are arranged -- that is the job of a banker. Are bankers now being reduced to order-takers? Just do what the customer asks and that is it? No, bankers are supposed to provide their customers with knowledge and advisement, and making their money is insured is a part of that.

To me, these are all things you should already be doing. FDIC recommended EDIE a while ago. You should be annually training your staff on FDIC coverage. You should be protecting your customer's best interest by making sure their deposits are insured.
Last edited by Bob The Banker; 02/09/11 04:19 PM.
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#1507269 - 02/09/11 04:47 PM Re: FDIC Proposed Rulemaking - Required Training
Dani York, CRCM Offline
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TN
Originally Posted By: Georgia Plum
While we do try to help consumers understand the FDIC coverage, the bottom line is, the Bank should not be put in a position of 'advising' consumers on FDIC coverage and where/how to bank their monies. If we do and it's wrong and the customer is not covered, then couldn't the Bank could be held liable? We always give the brochure and the EDIE link to anyone who questions FDIC coverage.


From the proposed rule:

The rule would not require an IDI to provide counsel or advice to the customer regarding
how to structure multiple deposit accounts
to maximize deposit insurance coverage.
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#1507277 - 02/09/11 04:50 PM Re: FDIC Proposed Rulemaking - Required Training Dani York, CRCM
Dani York, CRCM Offline
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TN
Also, did anyone else notice that the EDIE reference was not included in the actual proposed FDIC rule amendment on the last 2 pages? They talked all about it in the discussion, but didn't include it in the proposed new section.
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#1507290 - 02/09/11 04:56 PM Re: FDIC Proposed Rulemaking - Required Training
Elwood P. Dowd Offline
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Quote:
the Bank should not be put in a position of 'advising' consumers on FDIC coverage and where/how to bank their monies.


I totally agree. My contacts with this type of advice have all been negative. Customers attempting to maximize deposit insurance 1) who completely blew an expensive estate plan out of the water by creating POD and ITF relationships or 2) who ended up paying state inheritance taxes on a joint account with a child who was discourteous enough to die first.

People whose knowledge on deposit insurance is fantastic often have no knowledge of other, larger considerations. Setting up accounts to "maximize" deposit insurance is the tail wagging the dog.

Quote:
it's wrong and the customer is not covered, then couldn't the Bank could be held liable?


That's my favorite part. If the advice given by the bank is wrong it won't make any difference because the bank won't be there any more. wink
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#1507394 - 02/09/11 06:01 PM Re: FDIC Proposed Rulemaking - Required Training Elwood P. Dowd
Bob The Banker Offline
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I can't believe my eyes Ken. The bank should not be in a position to advise customers? That is the job of a banker!

I know the responsibility of consumers is almsot non-existant in many bases, but for bankers to sit here and say they have no responsibility to advise their depositors is a complete lack of responsibility on the side of a banker.

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#1507395 - 02/09/11 06:02 PM Re: FDIC Proposed Rulemaking - Required Training ChrisseyNJ
Bob The Banker Offline
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Originally Posted By: Jersey Mom
Hence the lob to the masses here!

I lead our training department; if no recordkeeping is required, how will we know who is due and who isnt? One would presume there will be an annual window in which to comply; opens May 1 closes June 30? "No record keeping" -- cant quite get my head around that one!

The banker process as described just seems silly - They can inform a depositor if about to exceed the threshold, but not advise any further? Will advice on how to structure deposits be prohibited in another rule later? And a banker should provide the FDIC brochure? Will this be another audit exception should a banker have a brochure holder on their desk full of them, but fail to put it in a customers hands?

No recordkeeping means you will not have to produce proof of completion. You still have to make sure everyone completes the training, but you will not be relied upon to supply documentation of completion.

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#1507556 - 02/09/11 07:24 PM Re: FDIC Proposed Rulemaking - Required Training Bob The Banker
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Wisconsin
We can tell them HOW FDIC insurance works, but we can NOT tell them HOW they should title their accounts to maximize FDIC insurance coverage. We don't know their financial situation, whether they've done any estate planning or what tax consequences there may be.
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#1507589 - 02/09/11 07:45 PM Re: FDIC Proposed Rulemaking - Required Training BowlingQueen
Reads Regs Offline
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I have an old copy of the FDIC's "Your Insured Deposits" brochure from January 2007. Inside the front cover it said the following:

"Notice

The information provided in this guide is presented in a non-technical way and is not intended to be a legal interpretation of the FDIC's laws and regulations or insurance coverage. For greater detail concerning the technical aspects of insurance coverage, depositors or their counsel may wish to consult the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) and the FDIC's regulations relating to insurance coverage (12 C.F.R. Part 330).

Federal law expressly limits the amount of insurance the FDIC can pay to depositors and no representation made by any person can increase that coverage."

I'm wondering if this same wording will appear in the new brochures when the FDIC finally publishes them or have they changed their position on this.
Last edited by Reads Regs; 02/09/11 09:48 PM. Reason: fixed typo "an" to "any"
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#1507602 - 02/09/11 07:54 PM Re: FDIC Proposed Rulemaking - Required Training Reads Regs
Elwood P. Dowd Offline
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Suggest it in your comment letter...

As the birth date of The Big Kahuna of Consumer Protection draws nearer and nearer, the FDIC is going to ridiculous lengths to say "Please Notice Me!"
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#1507653 - 02/09/11 08:32 PM Re: FDIC Proposed Rulemaking - Required Training Elwood P. Dowd
ChrisseyNJ Offline
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Joined: Feb 2010
Posts: 40
New Jersey
To Bob and Ken:
I see both sides; and was nearly embarrassed for my position when I read Georgia Plum's "the Bank should not be put in a position of 'advising' consumers on FDIC coverage and where/how to bank their monies."

But then I tried to think real-world:

Sitting at a desk, a banker who understands completely specific components of FDIC and can educate a consumer on the implications of un-insured, under-insured and sufficiently insured deposits is indeed a banker that customer will continue to seek! And thats the kind of banker we attempt to train!

We already have to "zip it" for residential mortgage (MLO? dont get me started!), cannot provide tax advice, cannot provide estate advice, cant do anything but robotically utter compliant words -- But, we cant quite say, "Mr. Consumer (whom regulators believe to be ignorant) please consult your FDIC advisor before making this investment decision in this FDIC insured institution but I am not allowed to provide such FDIC advice."

Seriously? There is no way a well-educated banker will be able to stop themselves short when they have been having these conversations since WaMu failed....
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#1507659 - 02/09/11 08:39 PM Re: FDIC Proposed Rulemaking - Required Training ChrisseyNJ
Burgess Offline
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Ok, what does this mean. The FDIC just approved the proposed rule. so it is law now or does it just mean it is up for comment?

http://www.fdic.gov/news/news/financial/2011/fil11007.html
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#1507666 - 02/09/11 08:49 PM Re: FDIC Proposed Rulemaking - Required Training Burgess
Elwood P. Dowd Offline
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It's a notice of proposed rulemaking on a different subject...
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#1507668 - 02/09/11 08:51 PM Re: FDIC Proposed Rulemaking - Required Training Elwood P. Dowd
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#1507670 - 02/09/11 08:53 PM Re: FDIC Proposed Rulemaking - Required Training Burgess
ATLbanker Offline
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Georgia
I think the FDIC should require individuals who wish to open an account at a FDIC insured institution to undergo training on FDIC insurance so they can understand insurance. Once the training is complete they can print our a certificate of completion. The certificate will be required to be presented before a deposit account can be opened. If a customer has more than $250,000 on deposit, I can provide advice on how to increase their FDIC insurance coverage. But it is still up to the customer to understand what affect different account ownerships may have on their estate planning strategies. Our CSR's are not lawyers and cannot advise customers on how to structure their accounts in order to comply with the requirements of their estate plan.

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#1507720 - 02/09/11 09:34 PM Re: FDIC Proposed Rulemaking - Required Training ATLbanker
Bob The Banker Offline
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Originally Posted By: ATLbanker
I think the FDIC should require individuals who wish to open an account at a FDIC insured institution to undergo training on FDIC insurance so they can understand insurance. Once the training is complete they can print our a certificate of completion. The certificate will be required to be presented before a deposit account can be opened. If a customer has more than $250,000 on deposit, I can provide advice on how to increase their FDIC insurance coverage. But it is still up to the customer to understand what affect different account ownerships may have on their estate planning strategies. Our CSR's are not lawyers and cannot advise customers on how to structure their accounts in order to comply with the requirements of their estate plan.

Let's make everyone licensed to sell insurance before buying car insurance while we are at it.

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#1507746 - 02/09/11 09:47 PM Re: FDIC Proposed Rulemaking - Required Training Burgess
Elwood P. Dowd Offline
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That's it. All the Board approved is a Notice of Proposed Rulemaking, not a final rule.
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#1507785 - 02/09/11 10:38 PM Re: FDIC Proposed Rulemaking - Required Training Bob The Banker
edAudit Offline
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You are here
Originally Posted By: Bob The Banker
I can't believe my eyes Ken. The bank should not be in a position to advise customers? That is the job of a banker!

I know the responsibility of consumers is almsot non-existant in many bases, but for bankers to sit here and say they have no responsibility to advise their depositors is a complete lack of responsibility on the side of a banker.


As I am late to the party I would like to add when we advise the customer to put son/daughter on account and they clean them out or recieve a garnishment. I do not think the customer will react favorably to our advise.
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#1507790 - 02/09/11 10:47 PM Re: FDIC Proposed Rulemaking - Required Training Elwood P. Dowd
Reads Regs Offline
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Originally Posted By: Ken_Pegasus
Suggest it in your comment letter...


I just noticed that the current online version of the brochure has a very similar disclaimer. http://www.fdic.gov/deposit/deposits/insured/index.html

It also says "This brochure does not provide estate-planning advice. Depositors seeking such assistance should contact a financial or legal advisor."
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