The FDIC adopted a final rule amending the deposit insurance regulations for trust accounts and mortgage servicing accounts.

The final rule is intended to: (i) make the deposit insurance rules easier to understand; (ii) facilitate timely insurance determinations for trust accounts in the event of a bank failure; and (iii) enhance the consistency of insurance coverage for mortgage servicing account deposits.

Highlights of the final rule include:

  • the merging of revocable and irrevocable trust deposit insurance categories into a new "trust accounts" category;
  • the establishment of a simple formula for calculating deposit insurance coverage for all trust accounts; and
  • the insuring of up to $250,000 per beneficiary (not to exceed five beneficiaries) as to a trust account and, in the case of mortgage servicing accounts, $250,000 per mortgagor.

The final rule will take effect on April 1, 2024 and applies to all FDIC-insured financial institutions.

Primary Sources

  1. FDIC Final Rule: Simplification of Deposit Insurance Rules
  2. FDIC Fact Sheet: Final Rule on Simplification of Deposit Insurance Rules for Trust and Mortgage Servicing Accounts
  3. FDIC Press Release: Final Rulemaking on Simplification of Deposit Insurance Rules for Trust and Mortgage Servicing Accounts

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