Banks would have to provide more training for their employees and more information to their customers under a proposed rule issued recently by the Federal Deposit Insurance Corporation.

Published in the Federal Register on February 11, 2011, the proposal calls for any employee of an insured depository institution (IDI) who is authorized to open deposit accounts and/or respond to customer questions about FDIC deposit insurance to complete training on the fundamentals of FDIC insurance coverage. The training would be in the form of a computer-based instructional program provided to the IDI by the FDIC. All employees would be required to complete the training once in every 12-month period, with the training to be taken by new employees within 30 days of beginning employment and by current employees within 60 days of the effective date of a final rule.

The proposal would also require IDIs to institute procedures directing employees, when opening a new deposit account, to inquire whether the customer has other deposit accounts at the same IDI and, if so, whether the combined account balance exceeds the standard maximum deposit insurance amount (currently $250,000). If the response regarding the combined balance is affirmative, the employee would have to provide the customer with a copy of the FDIC publication Deposit Insurance Summary. The rule would apply to all deposit accounts other than pass-through accounts, for which an IDI does not, in the normal course of business, keep records of beneficial owners.

Additionally, under the proposed rule, every IDI would have to provide a link to the FDIC’s Electronic Deposit Insurance Estimator on any Web site it maintains for customer use.

The FDIC, in announcing the rule, stated that it believes its proposal demands a minimum regulatory burden while ensuring that depositors are better informed. Comments on the proposal must be filed by April 12, 2011.

Ballard Spahr’s Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs). For more information, please contact group Chair Alan S. Kaplinsky, 215.864.8544 or; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or; John L. Culhane, Jr., 215.864.8535 or; Barbara S. Mishkin, 215.864.8528 or; or Mark J. Furletti, 215.864.8138 or




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