FDIC says banks need to correctly report uninsured deposits

The FDIC today issued a letter to remind financial institutions of their obligation to report estimated uninsured deposits in accordance with the instructions to the Call Report. The notice does not apply to institutions with less than $1 billion in total assets that do not report estimated uninsured deposits, the agency said.

If an institution has deposit accounts with balances in excess of the federal deposit insurance limit that it has collateralized by pledging assets—such as deposits of the U.S. government and of states and political subdivisions in the U.S.—then it should make a reasonable estimate of the portion of these deposits that is uninsured using the data available from its information systems, the FDIC said.

Some institutions incorrectly reduced the amount reported to the extent that the uninsured deposits are collateralized by pledged assets, the FDIC said. “This is incorrect because in and of itself, the existence of collateral has no bearing on the portion of a deposit that is covered by federal deposit insurance.” The agency also said some institutions incorrectly reduced the amount reported on Schedule RC-O by excluding intercompany deposit balances of subsidiaries.