Deposit Insurance Regulations; Definition of Insured Deposit

Riepilogo

The FDIC is adopting a final rule ("Final Rule") that amends its deposit insurance regulations with respect to deposits in foreign branches of U.S. insured depository institutions ("IDI" or "U.S. bank"). The Final Rule clarifies that deposits in branches of U.S. banks located outside the United States are not FDIC-insured deposits. This would be the case even if they are also payable at an office within the United States ("dual payability"). As discussed further below, a pending proposal by the United Kingdom's Prudential Regulation Authority ("U.K. PRA"), formerly known as the Financial Services Authority, has made it more likely that large U.S. banks will change their U.K. foreign branch deposit agreements to make their U.K. deposits payable both in the United Kingdom and the United States. This action has the potential to expose the Deposit Insurance Fund ("DIF") to expanded deposit insurance liability and create operational complexities if these types of deposits were treated as insured. The purpose of the Final Rule is to protect the DIF against the liability that it would otherwise face as a potential global deposit insurer, preserve confidence in the FDIC deposit insurance s