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FDIC proposes ending large banks' requirement to calculate deposit insurance in their own systems

2 min read

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The FDIC proposes removing a rule that requires banks with two million or more deposit accounts to maintain systems capable of calculating deposit insurance. They would instead fall under a revised framework supplying data and provisional-hold capabilities for the FDIC's calculations. The November 4 proposal seeks comments by January 4, 2027; its assessment that payouts would remain prompt is a forecast, not a tested outcome of the proposed changes.

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The Federal Deposit Insurance Corporation proposes removing the requirement that banks with two million or more deposit accounts maintain information systems capable of calculating deposit insurance. The agency would use its own systems to make those calculations, supported by revised bank data and account-hold requirements.

The November 4 proposal is open for comments through January 4, 2027. It does not itself repeal the existing rule.

What would replace the requirement

The FDIC proposes removing part 370 of its regulations and revising section 360.9. Part 370 currently requires covered banks to maintain complete and accurate information needed to determine coverage, alongside their insurance-calculation capabilities.

Under the proposed framework, a 'larger covered institution' would have at least $2 billion in deposits and two million or more deposit accounts. These institutions would have to supply specified depositor and customer data for the FDIC's calculations. They would also need capabilities to place and release provisional holds on accounts.

The FDIC says some recordkeeping requirements most critical to insurance determinations would carry over. It also proposes indexing the framework's dollar thresholds to inflation.

What depositors could face

The FDIC says improved agency systems mean it can remove the bank calculation requirement without materially impeding insurance determinations. That is its assessment of the proposal.

Its own effects discussion identifies a risk: if the proposal delayed determinations after a bank failure, inaccurate payouts could cause losses to the Deposit Insurance Fund, or longer waits could disrupt account holders and reduce confidence. The agency calls that outcome highly unlikely, citing its enhanced capabilities and retained data requirements. The proposal does not establish the actual timing of a future payout.

How to comment

Comments should identify RIN 3064-AG35 and use a submission method listed in the document. The FDIC specifically asks about the effects of changing data formats and whether it should retain part 370. It warns that comments, including supplied personal information, will generally be posted publicly.

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