The FDIC will adopt a final rule that will require large insured depository institutions to anticipate for the institution’s failure. In the event of failure, an institution would be required to provide the FDIC with certain account and customer information and provide for the placement and release of holds on liability accounts. The final rule would implement 4 major changes from the proposed rules. First, an FDIC application must be submitted for an exemption for institutions that have a high concentration of deposits incidental to credit card operations. Institutions with strong financial characteristics; those specializing in credit card operations or services to depository institutions; and those with fewer than 250,000 deposit accounts may be exempt. Second, the final rule would allow for the use of alternatives to persistent provisional holds. Third, the final rule would require covered institution to have a standardized process for foreign deposit provisional holds.

Of particular significance, institutions that are undercapitalized; have a CAMELS rating of 3 or higher; or are deemed to have significant capital, funding and liquidity concerns may be eligible for FDIC approval to accelerate the timeframe for all or part of the final rule. The FDIC, in consultation with a covered institution’s primary regulator, will use the following factors in determining whether or not to accelerate: (1) complexity of the institution’s deposit system and operations; (2) extent of asset quality difficulties; (3) volatility of funding sources; (4) expected near-term changes in capital; and (5) other factors the FDIC deems relevant. The final rule will be effective 30 days after publication and, barring an exception, institutions will have 18 months to implement the rule.