![]() ![]() This type of loan sweep is not an arrangement used to amortize a loan rather, excess funds in the deposit account are swept daily to pay down the loan balance and the following day the swept funds are made available to the customer's deposit account.ģ. Another arrangement uses the swept funds to pay down the customer's loan with the depository institution. Money market mutual funds.The FDIC also is aware of sweep arrangements that transfer funds into Fed Funds and holding company commercial paper. A Eurodollar deposit (typically a Cayman Island or Nassau branch deposit) or an International Banking Facility (IBF) deposit.Ĭ. Q: What are the most common sweep arrangements covered by the disclosure requirements? A: The three most common sweep arrangements involve: a. Whether or not the customer is aware of such arrangements, a deposit-to-deposit sweep where the insurance status of the customer is unchanged is not covered by the disclosure requirements.Ģ. In some cases, the customer may not be aware that a sub-account has been established. Likewise, reserve sweeps typically involve a transaction deposit account connected to a money market deposit account, usually structured as a sub-account, between which funds are moved on a periodic basis. All accounts associated with a ZBA usually are owned by the same legal entity thus, the movement of funds between the master and subsidiary accounts will not involve a change in insurance status for the customer. The account instructions typically call for any funds residing in the subsidiary accounts at the end of the day to be swept to the master concentration account. ZBAs involve a master concentration account connected with one or more subsidiary accounts. These include zero-balance accounts (ZBAs) and reserve sweeps. Deposit-to-deposit sweeps that do not result in a change in insurance status of the funds. Transactions used to amortize a loan according to a regular payment schedule, such as monthly or biweekly.Ĭ. Customer-initiated transactions not pre-arranged through the deposit account agreement.ī. Excluded from this definition are accounts involving: a. Sweep arrangements subject to the disclosure requirements are those allowing for the recurring movement of funds, typically daily, between the deposit account and the other account or sweep investment vehicle. Q: Could you clarify the types of sweep accounts subject to the disclosure requirements? A: For the purposes of disclosure, a sweep account involves the pre-arranged transfer of funds from a deposit account to: (1) an investment vehicle located outside the depository institution or (2) another account or investment vehicle located within the depository institution. The Federal Register notice provides details on complying with the rule.ġ. 5797, and can be accessed through this link- PDF ( PDF Help). The final rule was published in the Federal Register on Febru(74 Fed. Also, the information is not meant to be all inclusive.) Staff opinions are not binding upon the FDIC or its Board of Directors. (Please note that the opinions expressed in the FAQs are staff views and should only be considered advisory in nature. The information provided in the FAQs is a compilation of staff guidance provided in connection with actual questions received from industry representatives on the applicable issues. The following Frequently Asked Questions (FAQs) address the disclosure requirements of Section 360.8. It also includes disclosure requirements for certain sweep accounts. This rule codifies the FDIC's practices for determining deposit and other account balances at a failed insured depository institution. In January 2009, the FDIC Board of Directors adopted the final rule entitled "Processing of Deposit Accounts in the Event of an Insured Depository Institution Failure" (12 CFR Section 360.8). ![]() Sweep Account Disclosure Requirements Frequently Asked Questions Home > News & Events > Financial Institution Letters including office furniture, fixtures, and equipment. Portion (if any) exceeds coverage limits at that bank.Īre My Deposit Accounts Insured by the FDIC?įDIC-insured institutions to conduct business and exchange Specific group of deposit accounts — what's insured and what ![]() Determine how the insurance rules and limits apply to a ![]()
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