National Unrecovered Financial Services Association filed a comment letter on the FDIC’s proposed rule to address the depositor preference issue. The letter asserts that the “dual payability” approach taken in the proposed rule creates significant operational and legal issues, and that a better approach would be for the FDIC to issue a formal interpretation that the term “deposit liability” includes foreign branch deposits regardless of whether they are dually payable. This better, and relatively simple approach, would allow the FDIC to achieve all of its policy objectives and could be adopted alone or as a supplement to the approach taken in the proposed rule.

Related Documents:
FDIC Proposal
FSA Consultation Paper