The FDIC adopted a final rule that will rescind regulations concerning the fiduciary powers of state savings associations and amend regulations regarding consent requirements for the exercise of trust powers. The final rule will become effective on January 1, 2019.
The final rule will:
- remove FDIC Part 390 - Subpart J, which regulates the fiduciary (i.e., trust powers) of state savings associations;
- add a new section that explicitly requires state savings associations and state nonmember banks to obtain written consent from the FDIC prior to exercising trust powers;
- amend FDIC Rule 333.101 to clarify that state savings associations and state nonmember banks are not exercising trust powers when they are acting as "trustees or custodians for certain qualified retirement, education, and health savings accounts, or other similar accounts in which the bank's duties are essentially custodial or ministerial in nature and the acceptance of such accounts without trust powers is not contrary to applicable State law"; and
- modify section FDIC Rule 303.242 in order to apply the same application procedures to state savings associations and state nonmember banks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.