FDIC Proposes a More Streamlined Framework for Large-Bank Deposit Insurance Determinations
The Federal Deposit Insurance Corporation (FDIC) has proposed rescinding 12 C.F.R. part 370, which governs deposit account recordkeeping requirements for certain insured depository institutions (IDIs), in full and consolidating all requirements into a revised 12 C.F.R. § 360.9 framework. The proposal is more than just a reorganization– it revises recordkeeping requirements to shift responsibility for calculating deposit insurance from covered banks’ systems to the FDIC, while preserving standardized data and provisional-hold capabilities.
Importantly, the proposal does not change the threshold for covered institutions, rather it retains the same trigger thresholds that currently define institutions being subject to 360.9 provisional hold requirements and additional heightened requirements for the aspects of Part 370 that will be folded into the revised 360.9. The proposal should not materially affect “alternative recordkeepers” – i.e., agents who place deposits into deposit accounts at IDIs and maintain customer level deposit records, such as broker-dealers or custodial banks.
Comments are due January 4, 2027.
Proposal at a glance
- Rescinds part 370 and moves covered institutions into revised § 360.9. Institutions currently subject to part 370 would instead comply with an updated § 360.9 framework.
- Shifts the deposit insurance calculation to the FDIC. Larger covered institutions would provide standardized depositor and customer data but would no longer be required to operate their own systems for calculating insured and uninsured deposit amounts.
- Eliminates the annual part 370 certification and simplifies certain third-party recordkeeping requirements. Banks would retain data, testing, provisional-hold, and production obligations, but the proposal would reduce the compliance framework associated with part 370.
- Introduces Appendix I for pass-through and brokered deposits. Appendix I is the proposed standardized data file for accounts where beneficial-owner information is maintained by a third party, often referred to as an alternative recordkeeper. Following the failure of a larger covered institution, the file would provide the FDIC with the information needed to determine deposit insurance coverage for the underlying beneficial owners.
Key Wins for Institutions Currently Subject to Part 370
1. The FDIC, not the bank, would perform the insurance calculation
The most significant change is the proposed elimination of the requirement that a bank build, operate, continuously enhance, test, and remediate an internal system capable of calculating deposit insurance coverage. The FDIC would use its own systems, supported by data supplied in the prescribed format. Banks would still need reliable data aggregation and delivery capabilities, but the proposal separates those functions from the insurance calculation itself.
2. The compliance framework would be simpler
Rescission of part 370 would eliminate the annual compliance certification and the part 370-specific testing regime. That should reduce recurring governance, documentation, model-management, and remediation work. Revised § 360.9 would continue to require implementation, testing, records retention, and responsive data production, so institutions should view the change as a meaningful reduction in burden rather than a complete elimination of operational obligations.
3. The approach to certain third-party records would be narrower
For certain accounts with transactional features where complete beneficial-owner information is maintained outside the bank, a larger covered institution could satisfy the proposed rule by either making a good-faith effort to obtain a contractual commitment for delivery of Appendix I data within 24 hours after receivership or providing a written disclosure that access to deposits may be delayed until the required information is delivered. Current part 370 generally requires both contractual measures and validated data-delivery capabilities. The proposed alternative should provide banks greater flexibility in structuring third-party arrangements.
What the Proposal Means for Alternative Recordkeepers
The proposal should not materially change the day-to-day regulatory posture of deposit brokers, sweep-program administrators, fintech and banking-as-a-service platforms, prepaid and digital-wallet program managers, and other agents that maintain beneficial-owner records for omnibus or custodial accounts. Revised § 360.9 would impose obligations on the larger covered institution, not directly on the third-party recordkeeper.
- No new stand-alone FDIC compliance regime. Alternative recordkeepers would not become directly subject to revised § 360.9 merely because they maintain beneficial-owner data.
- Appendix I is largely a failure-event file. A third party expecting pass-through insurance would complete the proposed Appendix I file only after the failure of a larger covered institution, not as a routine submission.
- Contract terms may become more flexible, but data readiness still matters. For covered transactional accounts, a bank could pursue a 24-hour delivery covenant or use the prescribed disclosure alternative. Even where the disclosure option is used, delayed or incomplete data could postpone access to insured funds.
- Existing deposit-insurance rules still control. Pass-through coverage would continue to depend on the substantive and recordkeeping requirements in 12 C.F.R. part 330, including recognition of fiduciary relationships and identification of beneficial interests.
Practical caution: “No material impact” does not mean “no preparation.” Alternative recordkeepers would need to confirm that their beneficial-owner records can be mapped to Appendix I, that account titles and fiduciary relationships support pass-through treatment, and that bank agreements and disclosures accurately allocate responsibility following a failure.
Conclusion
The proposal would materially simplify the FDIC’s large-bank deposit insurance determination framework by transferring the calculation function to the FDIC and retiring part 370’s certification and bank-operated calculation-system requirements. For alternative recordkeepers, the proposal is principally a change in the bank’s compliance framework, not a new direct regulatory mandate. The practical priority is to preserve accurate beneficial-owner records and operational readiness so that Appendix I data can be delivered promptly if a larger covered institution fails.
We are continuing to assess the proposal’s operational and compliance implications, including issues that may warrant comment. We expect to address those issues in greater detail in a forthcoming update.
We have prepared a business-friendly redline that clearly identifies the proposed changes to parts 360.9 and 370. To request a copy of the redline or discuss the proposal, please email Jenna Rovira or Casey Jennings.
