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ARTICLE · 21 OCTOBER 2024

FDIC Proposes New Requirements For Custodial Accounts To Qualify For Pass-Through

Jones Day
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On September 17, 2024, the Federal Deposit Insurance Corporation ("FDIC") approved a proposed rule ("the Proposal") that would establish new recordkeeping requirements for FDIC-insured depository institutions ("IDIs") with "custodial deposit accounts with transactional features."

United StatesTechnology
Nathan Brownback
Nathan Brownback
Abradat Kamalpour
Abradat Kamalpour
Laura S. Pruitt
Laura S. Pruitt
Mark W. Rasmussen
Mark W. Rasmussen
John Tang
John Tang
Corbin Kennelly
Corbin Kennelly
Sarah Goodman
Sarah Goodman
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In Short

The Situation: On September 17, 2024, the Federal Deposit Insurance Corporation ("FDIC") approved a proposed rule ("the Proposal") that would establish new recordkeeping requirements for FDIC-insured depository institutions ("IDIs") with "custodial deposit accounts with transactional features."

The Result: The new recordkeeping requirements would be necessary before any covered arrangement would be deemed to qualify for pass-through deposit insurance coverage.

Looking Ahead: The Proposal is likely to increase operational and compliance costs for IDIs, and to create additional hurdles for financial technology (fintech) firms and other third-parties that partner with IDIs to provide deposit products.

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