The Federal Deposit Insurance Corporation is proposing to streamline regulations for fiduciary powers of state savings associations, while proposing that both state savings associations and state nonmember banks must obtain the FDIC’s prior written consent to exercise trust powers. The FDIC has also consolidated regulations with the rescission of former Office of Thrift Supervision regulations on required security devices and procedures and for consumer protections in sales of insurance.
Fiduciary Powers. The FDIC is proposing to rescind 12 CFR Part 390 subpart J, and amend 12 CFR Parts 333 and 303, regarding consent to exercise trust powers to reflect the applicability of these parts to both state savings associations and state nonmember banks. The proposal would represent a change for state savings associations, however, as they are not currently required by regulation to receive FDIC's consent before exercising trust powers granted by their chartering authorities.
The proposed amendments would also provide that state savings associations, like state nonmember banks, are not considered to be exercising trust powers when they act as a trustee or custodian of certain qualifying accounts. The procedures to obtain consent from the FDIC to exercise trust powers would be the same for both state nonmember banks and state savings associations. In addition, the proposal provides a more complete description of the documentation that should be submitted by applicants seeking exercise trust powers. There is a 60 day comment period.
Security procedures. The FDIC has rescinded the former Office of Thrift Supervision regulation on required security devices and procedures and made its own regulation applicable to all savings associations. The rule adoption eliminates 12 CFR Part 391, Subpart A—Security Procedures, which was transferred to the FDIC by virtue of the Dodd-Frank Act. All FDIC-supervised financial institutions are now subject to the standards in 12 CFR Part 326, Subpart A—Minimum Security Procedures. The amendments will become effective in 30 days.
Insurance Sales. The Federal Deposit Insurance Corporation has streamlined regulations for consumer protections in sales of insurance. The final rule rescinds regulations transferred from the Office of Thrift Supervision (12 CFR Part 390, subpart I) and includes state savings associations and their subsidiaries within the scope of FDIC regulations governing consumer protections for bank sales of insurance. All FDIC-supervised institutions must comply with 12 CFR Part 343 if they are selling, soliciting, advertising, or offering any insurance product. The amendments are effective 30 days after publication in the Federal Register.
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