Deposit Insurance Coverage Seminars

This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules

Federal Register

13143

Vol. 84, No. 65

Thursday, April 4, 2019

1 See Recordkeeping for Timely Deposit Insurance

Determination, 81 FR 87734 (Dec. 5, 2016); 12 CFR

part 370.

2 The Recordkeeping Rule generally applies to

IDIs that have 2 million or more deposit accounts.

12 CFR 370.2(c).

3 Insured depository institutions that are not

subject to the Recordkeeping Rule are not required

to perform Legacy Data Cleanup, but may choose to

do so to provide added certainty regarding deposit

insurance coverage to their depositors.

4 12 U.S.C. 1819(Tenth); 1820(g).

5 12 U.S.C. 1821(a)(1).

6 12 U.S.C. 1821(a)(1)(B), (C).

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 330

RIN 3064–AF04

Joint Ownership Deposit Accounts

AGENCY: Federal Deposit Insurance

Corporation.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Deposit

Insurance Corporation (FDIC) is seeking

comment on a proposed rule that would

amend the regulation governing one of

the requirements for an account to be

separately insured as a joint account.

Specifically, the proposed rule would

provide an alternative method to satisfy

the ‘‘signature card’’ requirement. Under

the proposal, the ‘‘signature card’’

requirement could be satisfied by

information contained in the deposit

account records of the insured

depository institution establishing co-

ownership of the deposit account, such

as evidence that the institution has

issued a mechanism for accessing the

account to each co-owner or evidence of

usage of the deposit account by each co-

owner.

DATES: Comments will be accepted until

May 6, 2019

irement could be satisfied by

information contained in the deposit

account records of the insured

depository institution establishing co-

ownership of the deposit account, such

as evidence that the institution has

issued a mechanism for accessing the

account to each co-owner or evidence of

usage of the deposit account by each co-

owner.

DATES: Comments will be accepted until

May 6, 2019.

ADDRESSES: You may submit comments

on the notice of proposed rulemaking

using any of the following methods:

• Agency Website: https://

www.fdic.gov/regulations/laws/federal.

Follow the instructions for submitting

comments on the agency website.

• Email: comments@fdic.gov. Include

RIN 3064–AF04 on the subject line of

the message.

• Mail: Robert E. Feldman, Executive

Secretary, Attention: Comments, Federal

Deposit Insurance Corporation, 550 17th

Street NW, Washington, DC 20429.

Include RIN 3064–AF04 on the subject

line of the letter.

• Hand Delivery/Courier: Comments

may be hand delivered to the guard

station at the rear of the 550 17th Street

Building (located on F Street) on

business days between 7 a.m. and 5 p.m.

Include RIN 3064–AF04 on the subject

line of the letter.

• Public Inspection: All comments

received, including any personal

information provided, will be posted

generally without change to https://

www.fdic.gov/regulations/laws/federal.

FOR FURTHER INFORMATION CONTACT:

James Watts, Counsel, Legal Division,

Street

Building (located on F Street) on

business days between 7 a.m. and 5 p.m.

Include RIN 3064–AF04 on the subject

line of the letter.

• Public Inspection: All comments

received, including any personal

information provided, will be posted

generally without change to https://

www.fdic.gov/regulations/laws/federal.

FOR FURTHER INFORMATION CONTACT:

James Watts, Counsel, Legal Division,

(202) 898–6678, jwatts@fdic.gov; Teresa

Franks, Associate Director, Division of

Resolutions and Receiverships, (571)

858–8226, tfranks@fdic.gov; Martin

Becker, Chief, Deposit Insurance,

Division of Depositor and Consumer

Protection, (202) 898–7207, mbecker@

fdic.gov.

SUPPLEMENTARY INFORMATION:

Policy Objectives

The FDIC is proposing to amend its

regulation governing the requirements

for a deposit account to be insured as a

joint account, 12 CFR 330.9, and

specifically, the requirement that each

co-owner of a joint account has

personally signed a deposit account

signature card. The FDIC periodically

receives inquiries regarding this

requirement. Those inquiries have

increased following the issuance of a

rule (Recordkeeping Rule) 1 that requires

certain large insured depository

institutions (covered institutions) to

configure their information technology

systems to be capable of calculating

insurance coverage for deposit accounts

in the event of the institution’s failure.

The Recordkeeping Rule has introduced

an element of pre-judgment involving

identification of account categories and

satisfaction of recordkeeping

requirements for the institutions subject

to that Rule.2 In particular, for purposes

of that Rule, covered institutions are

required to review their records and

update missing and erroneous deposit

account information (Legacy Data

Cleanup).3 As part of the Legacy Data

Cleanup, covered institutions must

obtain signature cards for owners of

accounts with multiple co-owners that

are missing one or more required

signature cards (affected joint accounts)

ticular, for purposes

of that Rule, covered institutions are

required to review their records and

update missing and erroneous deposit

account information (Legacy Data

Cleanup).3 As part of the Legacy Data

Cleanup, covered institutions must

obtain signature cards for owners of

accounts with multiple co-owners that

are missing one or more required

signature cards (affected joint accounts).

Staff at the FDIC has engaged in

discussions with these covered

institutions as part of the

implementation process, and these

discussions have brought to light certain

issues concerning the application of the

signature card requirement, leading the

FDIC to reconsider the methods by

which joint ownership may be

established for purposes of deposit

insurance.

The proposed rule is intended to

reduce the regulatory burden associated

with obtaining deposit account

signature cards for all insured

depository institutions (IDIs). For

covered institutions (i.e., IDIs subject to

the Recordkeeping Rule) discussed

above, the proposed rule also would

reduce the burden of obtaining signature

cards for owners of affected joint

accounts. The proposed rule is intended

to facilitate the prompt payment of

deposit insurance in the event of an

IDI’s failure by providing alternative

methods that the FDIC could use to

determine the owners of joint accounts,

consistent with its statutory authority.

These changes would promote

confidence in FDIC-insured deposits.

Finally, the proposal embodies a

forward-looking approach that would

permit the use of new and innovative

technologies and processes to meet the

FDIC’s policy objectives

IDI’s failure by providing alternative

methods that the FDIC could use to

determine the owners of joint accounts,

consistent with its statutory authority.

These changes would promote

confidence in FDIC-insured deposits.

Finally, the proposal embodies a

forward-looking approach that would

permit the use of new and innovative

technologies and processes to meet the

FDIC’s policy objectives.

Background: Current Regulatory

Approach

The FDIC is authorized to prescribe

rules and regulations as it may deem

necessary to carry out the provisions of

the Federal Deposit Insurance Act (FDI

Act).4 Under the FDI Act, the FDIC is

responsible for paying deposit insurance

in the event of an IDI’s failure up to the

standard maximum deposit insurance

amount, which is currently set at

$250,000.5 The statute provides that

deposits maintained by each depositor

in the same capacity and the same right

at the same IDI generally must be

aggregated and insured up to the

standard maximum deposit insurance

amount.6 Because the statute does not

define ‘‘capacity’’ or ‘‘right,’’ the FDIC

has implemented these terms by issuing

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7 See 12 CFR part 330.

8 12 CFR 330.9(a).

9 12 CFR 330.9(c)(1). The signature card

requirement does not apply to certificates of

deposit, deposits evidenced by negotiable

instruments, or accounts maintained by an agent,

nominee, guardian, or conservator on behalf of two

or more persons. 12 CFR 330.9(c)(2).

10 12 CFR 330.9(d)

ter / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules

7 See 12 CFR part 330.

8 12 CFR 330.9(a).

9 12 CFR 330.9(c)(1). The signature card

requirement does not apply to certificates of

deposit, deposits evidenced by negotiable

instruments, or accounts maintained by an agent,

nominee, guardian, or conservator on behalf of two

or more persons. 12 CFR 330.9(c)(2).

10 12 CFR 330.9(d).

11 See 32 FR 10408, 10409 (July 14, 1967) (‘‘A

joint deposit account shall be deemed to exist, for

purposes of insurance of accounts, only if each co-

owner has personally executed a deposit account

signature card and possesses withdrawal rights.’’)

12 The FDIC stated that its purpose was to ‘‘carry

out the concept of limited insurance coverage

intended by Federal deposit insurance,’’ and it

interpreted the FDI Act to ‘‘limit the various devices

commonly used to increase such coverage beyond

that meant to be provided by law.’’ 32 FR 10408

(July 14, 1967).

13 See, e.g., 55 FR 20111, 20113 (May 15, 1990).

14 See FDIC Financial Institution Employee’s

Guide to Deposit Insurance, 2016 ed., at 34.

15 See 12 CFR 330.5.

16 Public Law 106–229; 15 U.S.C. 7001(a).

regulations recognizing particular

categories of accounts, such as single

ownership accounts and joint

ownership accounts.7 If a deposit meets

the requirements for a particular

category, the deposit is insured up to

the $250,000 limit separately from

deposits held by the depositor in a

different category at the same IDI. For

example, deposits in the single

ownership category will be separately

insured from deposits in the joint

ownership category held by the same

depositor at the same IDI.

Section 330.9 of the FDIC’s

regulations governs insurance coverage

for joint ownership accounts. Joint

ownership accounts include deposit

accounts held pursuant to various forms

of co-ownership under state law. For

example, joint tenants could each hold

an equal, undivided interest in a deposit

account

deposits in the joint

ownership category held by the same

depositor at the same IDI.

Section 330.9 of the FDIC’s

regulations governs insurance coverage

for joint ownership accounts. Joint

ownership accounts include deposit

accounts held pursuant to various forms

of co-ownership under state law. For

example, joint tenants could each hold

an equal, undivided interest in a deposit

account. Section 330.9 provides that

only ‘‘qualifying joint accounts’’

(whether owned as joint tenants with

the right of survivorship, as tenants in

common, or as tenants by the entirety)

are insured separately from

individually-owned deposit accounts

maintained by the co-owners.8

‘‘Qualifying joint accounts’’ generally

must satisfy three requirements: (1) All

co-owners of the funds in the account

are ‘‘natural persons,’’ as defined in

section 330.1(l) of the regulations; (2)

each co-owner has personally signed a

deposit account signature card; and (3)

each co-owner possesses withdrawal

rights on the same basis.9 If a joint

deposit account is not a qualifying joint

account, each co-owner’s actual

ownership interest in the account is

aggregated with other single ownership

accounts of such individual or other

accounts of such entity.10 This may

result in some uninsured deposits if a

depositor’s single ownership accounts at

the same IDI, including deposits in any

non-qualifying joint accounts, exceed

$250,000

deposit account is not a qualifying joint

account, each co-owner’s actual

ownership interest in the account is

aggregated with other single ownership

accounts of such individual or other

accounts of such entity.10 This may

result in some uninsured deposits if a

depositor’s single ownership accounts at

the same IDI, including deposits in any

non-qualifying joint accounts, exceed

$250,000.

The requirement that each co-owner

of a joint account has personally signed

a deposit account signature card

(signature card requirement) in order for

the account to be insured as a joint

account has been included in the

regulation governing insurance coverage

since 1967.11 This requirement was

intended to address practices such as

the addition of nominal co-owners to an

account solely to increase deposit

insurance coverage.12 The FDIC has

periodically considered whether the

signature card requirement should be

eliminated, but retained the

requirement, concluding that signature

cards are reliable indicators of deposit

ownership.13 The FDIC continues to

view the signature card requirement as

important to ensuring consistency with

the FDI Act, which expressly limits the

amount of deposit insurance coverage

available to each depositor at a

particular IDI based on the right and

capacity in which funds are held.

Neither the FDI Act nor the FDIC’s

regulations define the term ‘‘signature

card.’’ FDIC staff has taken the position

that section 330.9 does not require any

particular format for a deposit account

signature card. Therefore, staff has

previously concluded that IDIs may

satisfy the requirement through various

forms of documentation used in their

account opening processes. For

example, staff has concluded that a

deposit account agreement signed by

each of an account’s co-owners would

satisfy the signature card requirement

9 does not require any

particular format for a deposit account

signature card. Therefore, staff has

previously concluded that IDIs may

satisfy the requirement through various

forms of documentation used in their

account opening processes. For

example, staff has concluded that a

deposit account agreement signed by

each of an account’s co-owners would

satisfy the signature card requirement.

Published guidance also states that

electronic signatures satisfy the

requirement.14

Description of the Proposed Rule

The FDIC is proposing to amend

section 330.9 to provide an alternative

method to satisfy the signature card

requirement. The proposed rule would

allow the signature card requirement to

be satisfied by information contained in

the deposit account records of the IDI

establishing co-ownership of the deposit

account, such as evidence that the

institution has issued a mechanism for

accessing the account to each co-owner

or evidence of usage of the deposit

account by each co-owner. For example,

under this proposal, the requirement

could be satisfied by evidence that an

IDI has issued a debit card to each co-

owner of the account or evidence that

each co-owner of the account has

transacted using the deposit account.

These examples, however, are not

intended to define the only forms of

evidence of co-ownership that could

satisfy the signature card requirement.

The proposed rule only would affect

a requirement in the FDIC’s regulations

that must be satisfied for a deposit

account to be separately insured as a

joint account; it would not affect any

other legal requirements applicable to

IDIs. IDIs may, for legal or other reasons,

find it appropriate or necessary to

continue collecting customers’

signatures

satisfy the signature card requirement.

The proposed rule only would affect

a requirement in the FDIC’s regulations

that must be satisfied for a deposit

account to be separately insured as a

joint account; it would not affect any

other legal requirements applicable to

IDIs. IDIs may, for legal or other reasons,

find it appropriate or necessary to

continue collecting customers’

signatures.

The proposed rule also would not

affect the general provisions contained

in the FDIC’s deposit insurance

regulations regarding recognition of

deposit ownership.15 These general

rules concerning recognition of deposit

ownership would continue to apply to

all deposit accounts, including joint

accounts.

The proposed rule would not

introduce new requirements with

respect to the requirements for an

account to be insured as a joint account,

and would not reduce or affect

insurance coverage for any account for

which the existing joint account

requirements are satisfied. The

proposed rule simply would provide an

alternative method to satisfy the existing

signature card requirement. If each co-

owner of a joint account signs, or has

previously signed, a deposit account

signature card in accordance with the

existing requirement, the alternative

method provided by the proposed rule

would be unnecessary. Assuming that

the remaining joint account

requirements are satisfied—that is, all

co-owners of the account are natural

persons and possess equal withdrawal

rights—the account would be insured as

a joint account.

The FDIC is also proposing a

conforming amendment to section 330.9

consistent with the Electronic

Signatures in Global and National

Commerce Act (E-Sign Act).16

Specifically, the FDIC proposes to

amend the regulation to state expressly

that the signature card requirement may

be satisfied electronically

and possess equal withdrawal

rights—the account would be insured as

a joint account.

The FDIC is also proposing a

conforming amendment to section 330.9

consistent with the Electronic

Signatures in Global and National

Commerce Act (E-Sign Act).16

Specifically, the FDIC proposes to

amend the regulation to state expressly

that the signature card requirement may

be satisfied electronically. The current

requirement that each depositor has

personally signed a deposit account

signature card would be amended to

require that each depositor has

personally signed, which may include

signing electronically, a deposit account

signature card. This amendment would

clarify for IDIs and depositors the

manner in which the signature card

requirement may be satisfied, and is

consistent with published guidance and

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17 See FDIC Financial Institution Employee’s

Guide to Deposit Insurance, 2016 ed., at 34.

18 See 81 FR 87742–43. The analysis for the

Recordkeeping Rule estimated that approximately 5

percent of the approximately 416 million deposit

accounts held by covered institutions would require

manual data cleanup.

19 The $226 million estimate includes both costs

incurred by the institutions and costs incurred by

depositors to update missing account information.

See 81 FR 87747.

20 81 FR 87742.

21 FDIC Consolidated Reports of Condition and

Income, as of December 31, 2018.

22 According to recent Census estimates,

approximately 60 percent of Americans live with a

spouse or partner (U.S. Census Bureau, Current

Population Survey, Annual Social and Economic

Supplement, 1967 to 2018)

costs incurred by

depositors to update missing account information.

See 81 FR 87747.

20 81 FR 87742.

21 FDIC Consolidated Reports of Condition and

Income, as of December 31, 2018.

22 According to recent Census estimates,

approximately 60 percent of Americans live with a

spouse or partner (U.S. Census Bureau, Current

Population Survey, Annual Social and Economic

Supplement, 1967 to 2018). In addition, according

to a recent banking survey, 58 to 76 percent of

Americans in relationships have at least one joint

account (TD Love & Money, Report of Findings,

Customer Insights, July 2017). Based on these

figures, the FDIC estimates that between 35 and 46

percent of Americans hold a joint account.

Assuming that joint accounts have two owners on

average, the FDIC estimates that between 21 and 30

percent of deposit accounts are joint. (For example,

if 35 percent of Americans share a joint account

with another American and the remaining 65

percent each has a personal account, then (35/2)/

(35/2 + 65) = 21 percent of accounts are joint). For

this analysis, the FDIC assumes the middle value

of 25% as an estimate of the percent of accounts

that are joint.

23 Following the analysis in the Recordkeeping

Rule, the FDIC assumes that 5% of accounts will

require data cleanup.

staff interpretations of section 330.9.17 It

would not substantively alter the

regulatory requirements for joint

accounts.

Expected Effects

The proposed rule would apply to all

IDIs and is expected to broaden the

types of documentation that would be

acceptable to satisfy the signature card

requirement at the time of an IDI’s

failure. In this way, for all IDIs, the

proposed rule is intended to reduce the

regulatory burden associated with

obtaining deposit account signature

cards. It would not impose any new

recordkeeping requirements for joint

accounts.

The proposed rule would, however,

have a more immediate regulatory

burden relief impact on the covered

institutions subject to the

Recordkeeping Rule

IDI’s

failure. In this way, for all IDIs, the

proposed rule is intended to reduce the

regulatory burden associated with

obtaining deposit account signature

cards. It would not impose any new

recordkeeping requirements for joint

accounts.

The proposed rule would, however,

have a more immediate regulatory

burden relief impact on the covered

institutions subject to the

Recordkeeping Rule. For purposes of

that Rule, as discussed above, covered

institutions are currently engaged in

Legacy Data Cleanup. As part of the

Legacy Data Cleanup, covered

institutions must obtain signature cards

for owners of affected joint accounts. By

providing an alternative method to

satisfy the signature card requirement

that relies on other information in the

institution’s deposit account records,

the proposed rule should reduce the

Legacy Data Cleanup burden associated

with obtaining missing signature cards

for covered institutions subject to the

Recordkeeping Rule.

To estimate the burden reduction of

the proposed rule relating to Legacy

Data Cleanup, the FDIC estimates: (1)

The cost of obtaining signature cards for

an affected joint account; and (2) the

total number of affected joint accounts

held at covered institutions subject to

the Recordkeeping Rule. The product of

these two figures is the estimated cost

burden of collecting missing signatures.

The proposed rule would reduce that

burden by allowing covered institutions

subject to the Recordkeeping Rule to

satisfy the signature card requirement

using other information in their deposit

account records establishing co-

ownership of the deposit account.

The FDIC’s estimate of the cost of

obtaining missing signature cards for an

affected joint account is based on cost

estimates used in connection with the

Recordkeeping Rule

by allowing covered institutions

subject to the Recordkeeping Rule to

satisfy the signature card requirement

using other information in their deposit

account records establishing co-

ownership of the deposit account.

The FDIC’s estimate of the cost of

obtaining missing signature cards for an

affected joint account is based on cost

estimates used in connection with the

Recordkeeping Rule. Legacy Data

Cleanup costs for the Recordkeeping

Rule were estimated at $226 million to

address approximately 21 million

deposit accounts held in covered

institutions.18 19 This represents an

average of approximately $11 per

account. Although accounts may require

Legacy Data Cleanup for a variety of

reasons, the Recordkeeping Rule

estimates that ‘‘more than 90 percent of

the legacy data cleanup costs are

associated with manually collecting

account information from customers

and entering it into the covered

institution’s systems.’’ 20 The process of

obtaining a missing signature fits this

description, and the FDIC believes that

$11 per account is a reasonable estimate

of the average cost of obtaining

signatures for an affected joint account.

The cost estimates used in the

Recordkeeping Rule are based on data

from the institutions covered by the

Recordkeeping Rule at the time that

Rule was issued. As of December 31,

2018, 36 covered institutions subject to

the Recordkeeping Rule held

approximately 418 million deposit

accounts.21 Assuming that 25 percent of

those accounts are joint,22 and assuming

that 5 percent of joint accounts are

missing at least one required

signature,23 there are a total of

approximately 5.2 (= 418 * 25% * 5%)

million affected joint accounts. At an

estimated cost of $11 per affected joint

account, the FDIC estimates a total cost

burden of $57 million for covered

institutions subject to the

Recordkeeping Rule to update deposit

account records related to affected joint

accounts

oint accounts are

missing at least one required

signature,23 there are a total of

approximately 5.2 (= 418 * 25% * 5%)

million affected joint accounts. At an

estimated cost of $11 per affected joint

account, the FDIC estimates a total cost

burden of $57 million for covered

institutions subject to the

Recordkeeping Rule to update deposit

account records related to affected joint

accounts. The proposed rule would

reduce this burden, resulting in an

estimated cost savings for these

institutions of $57 million.

IDIs that are not subject to the

Recordkeeping Rule are not required to

perform Legacy Data Cleanup, but some

may, nonetheless, choose to do so to

provide added certainty regarding

deposit insurance coverage to their

depositors. As of December 31, 2018,

there were approximately 162 million

deposit accounts held at 5,379 IDIs not

covered by the Recordkeeping Rule.

Given the same assumptions outlined in

the previous paragraph, the FDIC

estimates there are a total of 2.0 (= 162

* 25% * 5%) million affected joint

accounts held at these IDIs. The

proposed rule would alleviate some of

the burden of addressing these affected

joint accounts, resulting in estimated

cost savings of up to $22 ($11 * 2.0)

million.

The total estimated burden reduction

for the industry associated with

updating deposit account records for

joint accounts is estimated to be

between $57 and $79 million,

depending on the number of IDIs not

subject to the Recordkeeping Rule that

choose to update their deposit account

records. In addition, the proposed rule

could alleviate some of the burden of

obtaining signature cards for new joint

accounts at all IDIs. The FDIC expects

this benefit to be de minimis because

electronic signatures may be used to

satisfy the signature card requirement

pursuant to the E-Sign Act.

The rule also provides non-

quantifiable benefits to owners of joint

accounts

osit account

records. In addition, the proposed rule

could alleviate some of the burden of

obtaining signature cards for new joint

accounts at all IDIs. The FDIC expects

this benefit to be de minimis because

electronic signatures may be used to

satisfy the signature card requirement

pursuant to the E-Sign Act.

The rule also provides non-

quantifiable benefits to owners of joint

accounts. By providing alternative

methods that the FDIC could use to

determine the owners of joint accounts,

the proposed rule would further support

a prompt deposit insurance

determination in the event of an IDI’s

failure, alleviating delays in the

recognition of account ownership and

uncertainty regarding the extent of

deposit insurance coverage. These

benefits would promote depositor

confidence in the nation’s banking

system and particularly in FDIC-insured

deposits.

The FDIC is also proposing a

conforming amendment to section 330.9

consistent with the E-Sign Act. This

conforming amendment is not expected

to result in any discernable economic

effect, as current FDIC practice already

permits IDIs to use electronic signatures.

The effects of the conforming

amendment would be limited to

eliminating uncertainty regarding the

regulation.

The FDIC invites comments on all

aspects of the information provided in

this section.

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ermits IDIs to use electronic signatures.

The effects of the conforming

amendment would be limited to

eliminating uncertainty regarding the

regulation.

The FDIC invites comments on all

aspects of the information provided in

this section.

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24 See 12 CFR 370.8.

25 5 U.S.C. 601 et seq.

26 5 U.S.C. 605(b).

27 The SBA defines a small banking organization

as having $550 million or less in assets, where an

organization’s ‘‘assets are determined by averaging

Alternatives Considered

The FDIC has considered alternatives

to the proposed rule that could achieve

its policy objectives. A few of these

alternatives are described below.

Alternative 1: Status Quo. The FDIC

considered maintaining the current

requirements for accounts to be insured

as joint accounts. To address burden

issues raised by covered institutions

currently conducting Legacy Data

Cleanup pursuant to the Recordkeeping

Rule, the FDIC notes that such

institutions may request relief pursuant

to that Rule for existing accounts for

which the owners seek deposit

insurance coverage as a joint account.24

However, as discussed above, the

proposed rule would reduce the burden

associated with Legacy Data Cleanup, so

the potential cost savings to covered

institutions subject to the

Recordkeeping Rule would result in a

greater benefit. The proposed rule also

may result in cost savings for IDIs that

are not subject to the Recordkeeping

Rule, but nonetheless choose to perform

Legacy Data Cleanup.

As a subset of Alternative 1, the FDIC

considered whether covered institutions

could simply focus on or prioritize

accounts with balances of more than

$250,000 for purposes of their Legacy

Data Cleanup

ult in a

greater benefit. The proposed rule also

may result in cost savings for IDIs that

are not subject to the Recordkeeping

Rule, but nonetheless choose to perform

Legacy Data Cleanup.

As a subset of Alternative 1, the FDIC

considered whether covered institutions

could simply focus on or prioritize

accounts with balances of more than

$250,000 for purposes of their Legacy

Data Cleanup. This approach may

address regulatory burden to some

degree, but could also be interpreted as

introducing a distinction between large

IDIs and small IDIs with respect to

deposit insurance coverage. Due to this

concern, the expected benefits of this

alternative are smaller than those of the

proposed rule.

Alternative 2: Amend Certification

Requirement for Institutions Subject to

Part 370. As discussed above, the

covered institutions subject to the

Recordkeeping Rule are required to

collect missing signatures for joint

accounts. The FDIC considered

amending the Recordkeeping Rule’s

certification requirements to allow

covered institutions to certify their

compliance based on substantial or good

faith compliance with the deposit

insurance rules with respect to their

joint deposit accounts. This would

allow institutions subject to the

Recordkeeping Rule to certify

compliance with that Rule while

continuing to address data cleanup for

affected deposit accounts. Because

institutions would still incur costs

associated with obtaining missing

signatures, however, the expected

benefits of this alternative are smaller

than the expected benefits of the

proposed rule.

Alternative 3: Eliminate Signature

Card Requirement for Qualifying Joint

Accounts. The FDIC considered

amending section 330.9 to eliminate the

signature card requirement for joint

accounts

ause

institutions would still incur costs

associated with obtaining missing

signatures, however, the expected

benefits of this alternative are smaller

than the expected benefits of the

proposed rule.

Alternative 3: Eliminate Signature

Card Requirement for Qualifying Joint

Accounts. The FDIC considered

amending section 330.9 to eliminate the

signature card requirement for joint

accounts. As discussed above, however,

the FDIC continues to view the

signature card requirement as important

to ensuring consistency with the FDI

Act, particularly, the requirement to

insure depositors based on the right and

capacity in which funds are held. The

signature card requirement is intended

to address practices such as the addition

of nominal co-owners to a deposit

account without their knowledge solely

for the purpose of increasing deposit

insurance coverage. The proposed rule

is intended to retain consistency with

the FDI Act while providing a method

of satisfying the signature card

requirement that reduces regulatory

burden. Given the benefits of keeping

the signature card requirement, the

expected benefits of this alternative are

smaller than those of the proposed rule.

Alternative 4: Leverage Bank Secrecy

Act/Anti-Money Laundering Processes.

The FDIC considered amending section

330.9 to allow IDIs to satisfy the

signature card requirement based on

existing Bank Secrecy Act/Anti-Money

Laundering (BSA/AML) processes. This

could reduce regulatory burden by

leveraging existing compliance

processes. However, while BSA/AML

processes serve a valuable purpose in

identifying the individuals opening

accounts, these processes do not address

the purpose of the signature card

requirement, which is to indicate actual

ownership of the funds in the deposit

account. This approach would

intertwine deposit insurance coverage

with a compliance regime that serves a

different purpose

nce

processes. However, while BSA/AML

processes serve a valuable purpose in

identifying the individuals opening

accounts, these processes do not address

the purpose of the signature card

requirement, which is to indicate actual

ownership of the funds in the deposit

account. This approach would

intertwine deposit insurance coverage

with a compliance regime that serves a

different purpose. Moreover, exceptions

to BSA/AML requirements may apply to

many of the older deposit accounts for

which signature cards are less likely to

be available. Thus, it is unclear that

compliance with BSA/AML

requirements would provide additional

assurance that a deposit account’s titled

co-owners actually own the funds in the

account. In addition, this approach

could allow weaknesses in BSA/AML

compliance to affect deposit insurance

coverage for the IDI’s customers. Due to

the concerns discussed above, the

expected benefits of this alternative are

smaller than those of the proposed rule.

Request for Comment

The FDIC is requesting comment on

all aspects of the proposed rule,

including the alternatives presented.

Comment is specifically invited with

respect to the following questions:

• Can IDIs, including IDIs that rely on

deposit account systems designed or

maintained by third-party vendors,

obtain information on account usage or

access by the co-owners of an account?

• Would the proposed rule

sufficiently address satisfaction of the

signature card requirement through

electronic methods, given the variety of

account opening procedures used by

IDIs? If not, what clarifications or

changes are necessary?

• Is any data available concerning the

cost or effort that might be required for

IDIs to obtain deposit account signature

cards for co-owners where a signature

card is currently not available in the

deposit account records of the IDI?

• How should the FDIC approach

ensuring that a depositor does not use

another person’s personally identifiable

information to establish a deposit

account

• Is any data available concerning the

cost or effort that might be required for

IDIs to obtain deposit account signature

cards for co-owners where a signature

card is currently not available in the

deposit account records of the IDI?

• How should the FDIC approach

ensuring that a depositor does not use

another person’s personally identifiable

information to establish a deposit

account without the other person’s

knowledge simply to increase deposit

insurance coverage?

• Are there any additional factors that

the FDIC should consider in

determining whether the alternatives to

the proposed rule described above

would better satisfy the agency’s policy

objectives of reducing regulatory burden

and promoting the prompt payment of

deposit insurance consistent with the

FDI Act in the event of an IDI’s failure?

• Are there other alternatives that the

FDIC should consider that would better

satisfy those objectives?

• Does the proposed rule minimize

the potential for depositor confusion

over the requirements for joint

accounts?

Regulatory Analysis

A. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA)

generally requires an agency, in

connection with a proposed rule, to

prepare and make available for public

comment an initial regulatory flexibility

analysis that describes the impact of a

proposed rule on small entities.25

However, an initial regulatory flexibility

analysis is not required if the agency

certifies that the rule will not have a

significant economic impact on a

substantial number of small entities.26

The Small Business Administration

(SBA) has defined ‘‘small entities’’ to

include banking organizations with total

assets of less than or equal to $550

million.27 For the reasons described

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pact on a

substantial number of small entities.26

The Small Business Administration

(SBA) has defined ‘‘small entities’’ to

include banking organizations with total

assets of less than or equal to $550

million.27 For the reasons described

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13147

Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules

the assets reported on its four quarterly financial

statements for the preceding year.’’ See 13 CFR

121.201 (as amended, effective December 2, 2014).

In its determination, the SBA ‘‘counts the receipts,

employees, or other measure of size of the concern

whose size is at issue and all of its domestic and

foreign affiliates.’’ 13 CFR 121.103. Following these

regulations, the FDIC uses a covered entity’s

affiliated and acquired assets, averaged over the

preceding four quarters, to determine whether the

covered entity is ‘‘small’’ for the purposes of RFA.

28 Consolidated Reports of Condition and Income

for the quarter ending September 30, 2018.

29 12 U.S.C. 4802(a).

30 12 U.S.C. 4802(b).

below, the FDIC certifies pursuant to

section 605(b) of the RFA that the

proposed rule will not have a significant

economic impact on a substantial

number of small entities.

As of September 30, 2018, the FDIC

insured 5,486 institutions, of which

4,047 are considered small entities for

the purposes of RFA.28 These small IDIs

hold approximately 31 million deposit

accounts, with an average of 7,700

deposit accounts and a maximum of

approximately 143,000 deposit accounts

held at a single small IDI.

The proposed rule would amend

section 330.9 to provide an alternative

method to satisfy the signature card

requirement for joint accounts based on

information contained in the deposit

account records of the insured

depository institution establishing co-

ownership of the deposit account

deposit accounts and a maximum of

approximately 143,000 deposit accounts

held at a single small IDI.

The proposed rule would amend

section 330.9 to provide an alternative

method to satisfy the signature card

requirement for joint accounts based on

information contained in the deposit

account records of the insured

depository institution establishing co-

ownership of the deposit account. As

discussed in Expected Effects section,

because no small IDIs are covered by the

Recordkeeping Rule, a small IDI would

only experience burden relief from the

proposed rule if it first chose to update

its account records. In this case, the

proposed rule is estimated to reduce

burden in the amount of $11 per

affected joint account. This potential

burden reduction is conditional on the

IDI’s choice to update its records.

Following the burden reduction

estimation outlined in the Expected

Effects section, the FDIC estimates the

burden reduction for each of the 4,047

small IDIs covered by this proposed rule

by multiplying the number of deposit

accounts held at each small IDI by 25

percent to estimate the number of joint

accounts, then by 5 percent to estimate

the number of affected joint accounts,

and finally by $11 to estimate the cost

of addressing those affected joint

accounts. The potential burden

reduction for each institution ranges

from less than a dollar to approximately

twenty thousand dollars, with an

average of approximately one thousand

dollars per small IDI. Expressed as a

proportion of assets, the potential

burden reduction ranges from less than

a millionth of one percent to less than

two hundredths of one percent of total

assets.

The proposed rule would apply to all

IDIs, affecting a substantial number of

small entities. However, the economic

impact on each small entity is

insignificant, with no entity affected by

more than two hundredths of one

percent of total assets held

the potential

burden reduction ranges from less than

a millionth of one percent to less than

two hundredths of one percent of total

assets.

The proposed rule would apply to all

IDIs, affecting a substantial number of

small entities. However, the economic

impact on each small entity is

insignificant, with no entity affected by

more than two hundredths of one

percent of total assets held.

Accordingly, the FDIC certifies that the

proposal will not have a significant

economic impact on a substantial

number of small entities.

The FDIC invites comments on all

aspects of the supporting information

provided in this section, and in

particular, whether the proposed rule

would have any significant effects on

small entities that the FDIC has not

identified.

Riegle Community Development and

Regulatory Improvement Act

Section 302 of the Riegle Community

Development and Regulatory

Improvement Act (RCDRIA) requires

that the Federal banking agencies,

including the FDIC, in determining the

effective date and administrative

compliance requirements of new

regulations that impose additional

reporting, disclosure, or other

requirements on insured depository

institutions, consider, consistent with

principles of safety and soundness and

the public interest, any administrative

burdens that such regulations would

place on depository institutions,

including small depository institutions,

and customers of depository

institutions, as well as the benefits of

such regulations.29 Subject to certain

exceptions, new regulations and

amendments to regulations prescribed

by a Federal banking agency which

impose additional reporting,

disclosures, or other new requirements

on insured depository institutions shall

take effect on the first day of a calendar

quarter which begins on or after the date

on which the regulations are published

in final form.30

The proposed rule would not impose

additional reporting or disclosure

requirements on insured depository

institutions, including small depository

e additional reporting,

disclosures, or other new requirements

on insured depository institutions shall

take effect on the first day of a calendar

quarter which begins on or after the date

on which the regulations are published

in final form.30

The proposed rule would not impose

additional reporting or disclosure

requirements on insured depository

institutions, including small depository

institutions, or on the customers of

depository institutions. It would

provide an alternative method to satisfy

the existing signature card requirement

for joint deposit accounts based on

information contained in the deposit

account records of the insured

depository institution. Accordingly,

section 302 of RCDRIA does not apply.

Nevertheless, the requirements of

RCDRIA will be considered as part of

the overall rulemaking process, and the

FDIC invites comments that will further

inform its consideration of RCDRIA.

Paperwork Reduction Act

In accordance with the requirements

of the Paperwork Reduction Act of 1995

(PRA), 44 U.S.C. 3501–3521, the FDIC

may not conduct or sponsor, and the

respondent is not required to respond

to, an information collection unless it

displays a currently valid Office of

Management and Budget (OMB) control

number. The proposed rule would not

require any information collections for

purposes of the PRA, and therefore, no

submission to OMB is required.

The Treasury and General Government

Appropriations Act, 1999—Assessment

of Federal Regulations and Policies on

Families

The FDIC has determined that the

proposed rule will not affect family

well-being within the meaning of

section 654 of the Treasury and General

Government Appropriations Act,

enacted as part of the Omnibus

Consolidated and Emergency

Supplemental Appropriations Act of

1999 (Pub. L. 105–277, 112 Stat. 2681).

Plain Language

Section 722 of the Gramm-Leach-

Bliley Act, Public Law 106–102, 113

Stat. 1338, 1471 (Nov

that the

proposed rule will not affect family

well-being within the meaning of

section 654 of the Treasury and General

Government Appropriations Act,

enacted as part of the Omnibus

Consolidated and Emergency

Supplemental Appropriations Act of

1999 (Pub. L. 105–277, 112 Stat. 2681).

Plain Language

Section 722 of the Gramm-Leach-

Bliley Act, Public Law 106–102, 113

Stat. 1338, 1471 (Nov. 12, 1999),

requires the Federal banking agencies to

use plain language in all proposed and

final rulemakings published in the

Federal Register after January 1, 2000.

The FDIC invites your comments on

how to make this proposal easier to

understand. For example:

• Has the FDIC organized the material

to suit your needs? If not, how could the

material be better organized?

• Are the requirements in the

proposed regulation clearly stated? If

not, how could the regulation be stated

more clearly?

• Does the proposed regulation

contain language or jargon that is

unclear? If so, which language requires

clarification?

• Would a different format (grouping

and order of sections, use of headings,

paragraphing) make the regulation

easier to understand?

List of Subjects in 12 CFR Part 330

Bank deposit insurance, Reporting

and recordkeeping requirements,

Savings associations.

Authority and Issuance

For the reasons stated in the

preamble, the Federal Deposit Insurance

Corporation proposes to amend 12 CFR

part 330 as follows:

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Federal Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules

PART 330—DEPOSIT INSURANCE

COVERAGE

■1. The authority citation for Part 330

continues to read as follows:

Authority: 12 U.S.C. 1813(l), 1813(m),

1817(i), 1818(q), 1819(a)(Tenth), 1820(f),

1820(g), 1821(a), 1821(d), 1822(c).

■2. Revise § 330.9(c) to read as follows:

§ 330.9

Joint ownership accounts.

*

*

*

*

*

deral Register / Vol. 84, No. 65 / Thursday, April 4, 2019 / Proposed Rules

PART 330—DEPOSIT INSURANCE

COVERAGE

■1. The authority citation for Part 330

continues to read as follows:

Authority: 12 U.S.C. 1813(l), 1813(m),

1817(i), 1818(q), 1819(a)(Tenth), 1820(f),

1820(g), 1821(a), 1821(d), 1822(c).

■2. Revise § 330.9(c) to read as follows:

§ 330.9

Joint ownership accounts.

*

*

*

*

*

(c) Qualifying joint accounts. (1)

Qualification requirements. A joint

deposit account shall be deemed to be

a qualifying joint account, for purposes

of this section, only if:

(i) All co-owners of the funds in the

account are ‘‘natural persons’’ (as

defined in § 330.1(l));

(ii) Each co-owner has personally

signed, which may include signing

electronically, a deposit account

signature card; and

(iii) Each co-owner possesses

withdrawal rights on the same basis.

(2) Limited exceptions. The signature-

card requirement of paragraph (c)(1)(ii)

of this section shall not apply to

certificates of deposit, to any deposit

obligation evidenced by a negotiable

instrument, or to any account

maintained by an agent, nominee,

guardian, custodian, or conservator on

behalf of two or more persons.

(3) Evidence of deposit ownership. All

deposit accounts that satisfy the criteria

in paragraph (c)(1) of this section, and

those accounts that come within the

exception provided for in paragraph

(c)(2) of this section, shall be deemed to

be jointly owned provided that, in

accordance with the provisions of

§ 330.5(a), the FDIC determines that the

deposit account records of the insured

depository institution are clear and

unambiguous as to the ownership of the

accounts. If the deposit account records

are ambiguous or unclear as to the

manner in which the deposit accounts

are owned, then the FDIC may, in its

sole discretion, consider evidence other

than the deposit account records of the

insured depository institution for the

purpose of establishing the manner in

which the funds are owned

ion are clear and

unambiguous as to the ownership of the

accounts. If the deposit account records

are ambiguous or unclear as to the

manner in which the deposit accounts

are owned, then the FDIC may, in its

sole discretion, consider evidence other

than the deposit account records of the

insured depository institution for the

purpose of establishing the manner in

which the funds are owned. The

signatures of two or more persons on the

deposit account signature card or the

names of two or more persons on a

certificate of deposit or other deposit

instrument shall be conclusive evidence

that the account is a joint account

(although not necessarily a qualifying

joint account) unless the deposit records

as a whole are ambiguous and some

other evidence indicates, to the

satisfaction of the FDIC, that there is a

contrary ownership capacity.

(4) Alternative method to satisfy

signature-card requirement. The

signature-card requirement of paragraph

(c)(1)(ii) of this section also may be

satisfied by information contained in

the deposit account records of the

insured depository institution

establishing co-ownership of the deposit

account, such as evidence that the

institution has issued a mechanism for

accessing the account to each co-owner

or evidence of usage of the deposit

account by each co-owner.

*

*

*

*

*

By order of the Board of Directors of the

Federal Deposit Insurance Corporation.

Dated at Washington, DC, on March 29,

2019.

Valerie Best,

Assistant Executive Secretary.

[FR Doc. 2019–06534 Filed 4–3–19; 8:45 am]

BILLING CODE 6714–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA–2019–0189; Product

Identifier 2019–NM–001–AD]

RIN 2120–AA64

Airworthiness Directives; Bombardier,

Inc., Airplanes

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking

(NPRM)

cutive Secretary.

[FR Doc. 2019–06534 Filed 4–3–19; 8:45 am]

BILLING CODE 6714–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA–2019–0189; Product

Identifier 2019–NM–001–AD]

RIN 2120–AA64

Airworthiness Directives; Bombardier,

Inc., Airplanes

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: We propose to adopt a new

airworthiness directive (AD) for certain

Bombardier, Inc., Model DHC–8–102,

–103, and –106 airplanes; DHC–8–200

series airplanes; and DHC–8–300 series

airplanes. This proposed AD was

prompted by the reported loss of an

elevator spring tab balance weight prior

to takeoff. This proposed AD would

require inspecting the two balance

weights and the two hinge arms on each

elevator spring tab, and corrective

actions if necessary. We are proposing

this AD to address the unsafe condition

on these products.

DATES: We must receive comments on

this proposed AD by May 20, 2019.

ADDRESSES: You may send comments,

using the procedures found in 14 CFR

11.43 and 11.45, by any of the following

methods:

• Federal eRulemaking Portal: Go to

http://www.regulations.gov. Follow the

instructions for submitting comments.

• Fax: 202–493–2251.

• Mail: U.S. Department of

Transportation, Docket Operations,

M–30, West Building Ground Floor,

Room W12–140, 1200 New Jersey

Avenue SE, Washington, DC 20590.

• Hand Delivery: Deliver to Mail

address above between 9 a.m. and 5

p.m., Monday through Friday, except

Federal holidays.

For service information identified in

this NPRM, contact Bombardier, Inc.,

Q-Series Technical Help Desk, 123

Garratt Boulevard, Toronto, Ontario

M3K 1Y5, Canada; telephone 416–375–

4000; fax 416–375–4539; email

thd.qseries@aero.bombardier.com;

internet http://www.bombardier.com.

You may view this service information

at the FAA, Transport Standards

Branch, 2200 South 216th St., Des

Moines, WA

ervice information identified in

this NPRM, contact Bombardier, Inc.,

Q-Series Technical Help Desk, 123

Garratt Boulevard, Toronto, Ontario

M3K 1Y5, Canada; telephone 416–375–

4000; fax 416–375–4539; email

thd.qseries@aero.bombardier.com;

internet http://www.bombardier.com.

You may view this service information

at the FAA, Transport Standards

Branch, 2200 South 216th St., Des

Moines, WA. For information on the

availability of this material at the FAA,

call 206–231–3195.

Examining the AD Docket

You may examine the AD docket on

the internet at http://

www.regulations.gov by searching for

and locating Docket No. FAA–2019–

0189; or in person at Docket Operations

between 9 a.m. and 5 p.m., Monday

through Friday, except Federal holidays.

The AD docket contains this NPRM, the

regulatory evaluation, any comments

received, and other information. The

street address for Docket Operations

(phone: 800–647–5527) is in the

ADDRESSES section. Comments will be

available in the AD docket shortly after

receipt.

FOR FURTHER INFORMATION CONTACT:

Andrea Jimenez, Aerospace Engineer,

Airframe and Mechanical Systems

Section, FAA, New York ACO Branch,

1600 Stewart Avenue, Suite 410,

Westbury, NY 11590; telephone 516–

228–7330; fax 516–794–5531; email

9-avs-nyaco-cos@faa.gov.

SUPPLEMENTARY INFORMATION:

Comments Invited

We invite you to send any written

relevant data, views, or arguments about

this proposal. Send your comments to

an address listed under the ADDRESSES

section. Include ‘‘Docket No. FAA–

2019–0189; Product Identifier 2019–

NM–001–AD’’ at the beginning of your

comments. We specifically invite

comments on the overall regulatory,

economic, environmental, and energy

aspects of this NPRM. We will consider

all comments received by the closing

date and may amend this NPRM

because of those comments.

We will post all comments we

receive, without change, to http://

www.regulations.gov, including any

personal information you provide

he beginning of your

comments. We specifically invite

comments on the overall regulatory,

economic, environmental, and energy

aspects of this NPRM. We will consider

all comments received by the closing

date and may amend this NPRM

because of those comments.

We will post all comments we

receive, without change, to http://

www.regulations.gov, including any

personal information you provide. We

will also post a report summarizing each

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