Anybody seen this?
http://www.fdic.gov/news/news/press/2008/pr08086.html

If I'm reading correctly, you can now name ANY beneficiary and receive coverage. However, when I go to EDIE it doesn't calculate that way. Hopefully it just means that they haven't updated EDIE yet??

Listening to today's conference call right now - EDIE won't be updated until this weekend. BIG changes! kinship rule is out....for one thing

What conference call?

FDIC has been doing a series of insurance conference, the basis of which is to educate bankers on how FDIC works in this time of heightened sensitivity and concern...

http://www.fdic.gov/news/news/financial/2008/fil08085.html#body

Mary Beth posted this info a little earlier - and yes EDIE will be updated over the weekdend and yes, if I read it correctly...
"Virtually" anyone can be named as a beneficiary (immediate family requirement is gone) and limit is $500k per account.

Thanks Tx Trainer for pointing out my error.
NOT A LIMIT OF $500k per account.

Limit is NOT $500k per account -

See attached and notice second paragraph, last sentence - I think we should wait for the guru's to break do for us before everyone gets very confused...

http://www.fdic.gov/news/news/press/2008/pr08086.html

Here's my breakdown:


BOL Special Briefing on Deposit Insurance Changes

can you give an example of when the $500,000 limit will come into play. It's Friday and my mind is toast!

I put a call in to David Barr, the FDIC spokesman, about an hour ago. The $500,000 reference makes no sense and I'm wondering if the press release from FDIC has a typo and should have said the LESSER of $500,000 or up to $100,000 per beneficiary.

You're right. It is Friday. My mind is boggled, too, and I was unable to figure out what would make the $500,000 reference make sense.

It had something to do with disproportionate assignment of funds to beneficiaries and I'm not sure I heard an equation, but it would seem like there should be one....

Earlier today the FDIC updated the Board's meeting notice for today by adding links to two documents. Here's a link to the meeting notice. http://www.fdic.gov/news/board/notice26Sept2008.html

The first link within the notice was to the FDIC staff memo to the Board about the draft interim rule. The second link was to the draft interim rule.

Here's the link to the memo. http://www.fdic.gov/news/board/08sep26memo.pdf

Here's the link to the draft interim rule. http://www.fdic.gov/news/board/08sep26rule.pdf

I had started a thread earlier today in the General Discussion forum about this. http://www.bankersonline.com/forum/ubbth...e=1#Post1051250

The FDIC just released a FIL on the topic. Here's a link to it.
http://www.fdic.gov/news/news/financial/2008/fil08099.html

From the Release: For revocable trust account owners with more than $500,000 in such accounts naming more than five beneficiaries, the coverage is the greater of either $500,000 or the sum of all the named beneficiaries' proportional interest in the trusts, limited to $100,000 per different beneficiary.

I'm pretty sure the proportinal interest bit was already a part of the rules. If so, here is what I think it means:

Customer has $600,000 CD on deposit w/ 6 beneficaries. One beneficiary's interest is 50% of the funds or $300,000. The other five beneficiaries' interests are 10% each or $60,000 each. Under the current rules I believe the account would only be insured up to $400,000 (the beneficiary who has a 50% interest would only be insured up to 100,000 for his interest in the account)

Under the new rules it looks like the account will be insured for $500,000 using the greater of $500,000 OR the beneficiaries' proportional interest (limited to $100,000 each).

Am I right? Am I wrong? Do you think this situation will come up much at all?

Here's the scoop directly from my conversation with David Barr of FDIC later this afternoon.

If there is a revocable trust account with $500,000 or less and at least 5 beneficiaries, the FDIC will assume proportional interest, consider the funds insured, and pay out to the account owner. No (or few) questions asked so that they can expeditiously move forward, rather than having to interact with the grantor or trustee. So, the account will be insured on the basis of a theoretical equal share for each beneficiary, rather than on the basis of what each beneficiary actually is slated to receive under the terms of the trust instrument.

If the trust account is larger than that, however, the FDIC will actually examine the trust to determine what quantum of interest each beneficiary was to have. The account will be insured on a per beneficiary basis based upon the actual interest of each beneficiary up to $100,000 per -- OR the account will be insured for $500,000, whichever is greater. So, if you have $700,000 in the account and 7 beneficiaries, but one is to receive $400,000, one is to receive $200,000 and the remaining 5 beneficiaries would receive $20,000 each, the calculation would be $300,000 on the per beneficiary basis, but since the test is the greater of the actual (up to $100,000 per beneficiary, so we'd have 2 at 100,000 and 5 at $20,000, for a total of $300,000) OR $500,000 -- the insurance on the account would be $500,000.

The bad news is that this will be a hard concept to get straight initially. The good news is that it won't come up very often.

Can a depositor name a church or other organization as a beneficiary? Or does it have to be a person?

"Under the interim rule, coverage is based on the existence of any beneficiary named in the revocable trust, as long as the beneficiary is a natural person, or a charity or other non-profit organization."

MarkB

Yes, refer to MBG's posting above - the special briefing.