The FDIC today proposed to eliminate a regulation requiring large banks to maintain certain recordkeeping systems for deposit insurance purposes.
In 2016, the FDIC adopted a rule requiring banks with at least $2 billion in deposits to maintain systems that can provide the agency with deposit account and customer information following a bank failure. The rule also requires those institutions to have mechanisms that enable the automated placement and release of provisional holds on liability accounts, including deposit accounts.
In the proposed rulemaking, the agency said that advancements in its capabilities and systems have improved its ability to promptly calculate the deposit insurance coverage needed following a bank failure, and therefore eliminating the requirement would reduce the regulatory burden for large banks.
In addition to the proposed rulemaking, the FDIC plans to revise its data retention practices to minimize the volume of sensitive information it holds.
“Our objectives are straightforward: to rescind regulatory requirements that are no longer needed, while continuing to ensure we can execute on our core responsibility to resolve failed banks in an orderly manner and return insured funds to depositors as quickly as possible,” FDIC Chairman Travis Hill said.
