FDIC Supervisory Insights Summer 2009

Regulatory and Supervisory
Roundup
continued from pg. 43
Subject Summary
Revisions to the Consolidated Reports
of Condition and Income for 2009 (FIL-
7-2009, January 30, 2009)
Interest Rate Restrictions on Institutions
That Are Less Than Well-Capitalized
(PR-9-2009, January 27, 2009;
FIL-5-2009, January 28, 2009; Federal
Register, Vol. 74, No. 21, p. 5904,
February 3, 2009)
Processing of Deposit Accounts in
the Event of an Insured Depository
Institution Failure – Final Rule (PR-
8-2009, January 27, 2009; FIL-9-2009,
February 4, 2009; Federal Register,
Vol. 74, No. 20, p. 5797, February 2,
2009)
Risk Management of Remote Deposit
Capture (FIL-4-2009, January 14, 2009)
Monitoring of the Use of Funding
from Federal Financial Stability and
Guaranty Programs (FIL-1-2009, January
12, 2009)
The Federal Financial Institutions Examination Council has approved revisions to the reporting
requirements for the Consolidated Reports of Condition and Income. These regulatory reporting
revisions will take effect on a phased-in basis during 2009. The U.S. Office of Management and
Budget must approve these changes before they become final.
See http://www.fdic.gov/news/news/financial/2009/fil09007.html.
The FDIC issued a proposed rule that would make certain revisions to the interest rate restrictions
under Part 337.6 (“Brokered Deposits”) of the FDIC Rules and Regulations. The proposal
would redefine the “national rate” as a simple average of deposit rates paid by U.S. depository
institutions, discontinuing the use of Treasury yields (which are currently well below average
deposit rates) in the definition. The proposal, in the absence of contrary evidence as to the rates
in a particular market, also would specify that the prevailing rate in all market areas is deemed to
be the “national rate” as defined by the FDIC. Comments on the proposed rule were due by April
4, 2009. See http://www.fdic.gov/news/news/financial/2009/fil09005.html.
The FDIC issued a final rule on processing deposit accounts in the event of a bank failure. The
rule finalizes the interim rule issued in July 2008, which established the FDIC’s practices for
determining deposit and other liability account balances at a failed insured depository institution.
The final rule also requires institutions to prominently disclose to sweep account customers
whether the swept funds are deposits and the status of the swept funds if the institution were to
fail. The final rule took effect on March 4, 2009; however, the effective date of the sweep account
disclosure requirements is July 1, 2009.
See http://www.fdic.gov/news/news/financial/2009/fil09009.html.
The Federal Financial Institutions Examination Council issued guidance to assist financial institutions
in identifying risks in their remote deposit capture (RDC) systems and evaluating the
adequacy of controls and applicable risk management practices. The guidance addresses the
necessary elements of an RDC risk management process—risk identification, assessment, and
mitigation—and the measurement and monitoring of residual risk exposure. The guidance also
discusses the responsibilities of the board of directors and senior management in overseeing the
development, implementation, and ongoing operation of RDC.
See http://www.fdic.gov/news/news/financial/2009/fil09004.html.
The FDIC announced that state nonmember institutions should implement a process to monitor
their use of capital injections, liquidity support, or financing guarantees obtained through recent
financial stability programs established by the U.S. Department of the Treasury, the FDIC, and the
Federal Reserve. In particular, the monitoring processes should help to determine how participation
in these federal programs has assisted institutions in supporting prudent lending or efforts to
work with existing borrowers to avoid unnecessary foreclosures. The FDIC encourages institutions
to include a summary of this information in shareholder and public reports, annual reports
and financial statements, as applicable.
See http://www.fdic.gov/news/news/financial/2009/fil09001.html.
44 Supervisory Insights Summer 2009