On 1/21/2022, the FDIC approved a final rule to simplify aspects of the agency’s deposit insurance coverage rules. In particular, deposit insurance coverage for deposits held in connection with irrevocable and revocable trusts is simplified by combining these two deposit insurance categories under one simpler and common calculation.

According to FDIC, the agency receives more inquiries related to deposit insurance coverage for trust deposits than all other types of deposits combined. Thus, they are making the trust rules consistent and easier to understand for bankers and depositors. In addition, the final rule will facilitate prompt payment of deposit insurance by the FDIC in the event of an insured depository institution’s failure.

The final rule, which will take effect on April 1, 2024, also amends the rule that governs coverage for mortgage servicing accounts to allow principal and interest funds advanced by a mortgage servicer to be included in the deposit insurance calculation.

Read FDIC’s full release here.

See the final rule here and the accompanying Fact Sheet here.

Adam Witmer

Adam Witmer is a speaker, author, and founder of the Compliance Cohort. Adam has taught hundreds of seminars and training sessions to thousands of bankers throughout the United States and teaches on all areas of regulatory compliance. Adam has written five e-books that he never published, hit a grizzly bear while driving in a National Park, and is an award winning photographer and musician (though he no longer takes photos nor plays any instruments). In his spare time, Adam can be found kayaking on the lake, doing taekwondo with his kids, working on his (project) house, or spending time with his family.

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