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#1718505 - 07/10/12 03:05 PM FDIC insurance disclosure
BNach Offline
Junior Member
Joined: Jul 2011
Posts: 41
Central PA
Does anyone know if the FDIC insurance disclosure is required on a sweep account that sweeps from an interest bearing checking account to a line of credit for the purpose of hitting target balances? The Cash Management group is asking and I originally said no, however something that's bothering me is that FIL 39-2009 makes this distinction in the exclusions: Transactions used to amortize a loan according to a regular payment schedule, such as monthly or biweekly. So, what about sweeps that are not for a regularly scheduled payment?

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Operations Compliance
#1720453 - 07/16/12 09:47 PM Re: FDIC insurance disclosure BNach
J Hunt Offline
100 Club
Joined: Feb 2002
Posts: 132
Phoenix, AZ
B Nach - this is the example I used with my banks to help them understand the type of loan payment sweep situtation that would be subject to the sweep disclosure rules:

Example: Customer has a deposit account and a line of credit attached together. The deposit account is set up with a maximum (ceiling) amount. If the balance at the end of the day is less than the maximum set, funds are swept from the line of credit to the deposit account. If the balance at the end of the day is greater than the maximum set, funds are swept from the deposit account to the line of credit to pay it down, up to the full line of credit amount.

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