New FDIC Rule Changes for Trusts & Mortgage Servicing Accounts

The FDIC is amending the rules governing deposit insurance coverage.  The amendments simplify the regulations by putting both revocable and irrevocable trust categories into one “trust accounts” category. It will use a common calculation for both and provide consistent deposit insurance treatment for all mortgage servicing account balances held to satisfy principal and interest obligations to a lender.

Coverage for trust account deposits will be determined through a simple calculation.  Each grantor’s trust deposits will be insured up to the standard maximum deposit insurance amount (currently $250,000), multiplied by the number of trust beneficiaries, not to exceed five.  This, in effect, will limit coverage for a grantor’s trust deposits at each insured depository institution (IDI) to a total of $1,250,000 – a maximum of $250,000 per beneficiary for up to five beneficiaries.  What does this mean for your bank and customers?  Some of your larger trust customers may not be adequately insured!  Learn more during this pragmatic program.