Hypothetical:

Single account owned by a consumer. Balance is $1,000,000.
Customer does not want to add any additional owners or POD beneficiaries to her account. She requests securities be pledged by the Bank to her uninsured amount in the bank ($750,000).

T or F?

Since the customer has $250,000 in FDIC deposit insurance, the bank only needs to pledge securities valued at $750,000, not $1,000,000.

Thanks for any responses.

First you need to figure out if its allowed under State law. If you are a National Bank, you are out of luck (last I checked) Then under State law, you will have to figure out how the customer will be granted an actual security interest in the securities. If that does not exist, the FDIC will not recognize the pledge.

If that is the goal to cover the additional deposits over $250,000, then you would only pledge $750,000. Depending on your size, someone needs to check to see what that does to your liquidity.

I assume you don't offer Repo accounts.

"Repos" is in the subject line, so I assume that is part of Laketime's thought process. But, you need to go into that product with your eyes wide open. Many legal and operational questions to be answered before you tell the customer you can do this.