CUNA Regulatory Comment Call

March 23, 2009

FTC Proposed Rule on Disclosures for Non-Federally Insured Institutions


Please submit your comments to CUNA by May 26, 2009. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at or to Senior Assistant General Counsel Jeff Bloch at; or mail them to Mary or Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, 6th Floor, Washington, DC 20004. You may also contact us if you would like a copy of the proposed rule or you may access it here.


FDICIA imposes disclosure requirements for financial institutions that do not provide federal deposit or share insurance. However, Congress prohibited the FTC from spending resources on implementing these requirements until 2003. The FTC then issued a proposed rule in 2005 for these required disclosures, which was never finalized. Click here for CUNA’s Regulatory Comment Call that was issued in 2005, which provides more information about this earlier proposal, and click here for CUNA’s comment letter in response to this proposal.

In general, FIDICA requires non-federally insured financial institutions to disclose that it does not have federal insurance and that the federal government does not guarantee depositors will receive their money if the institution fails. This disclosure must be on periodic statements, signature cards, passbooks, and share certificates. In addition, the institution must disclose that it lacks federal insurance on most advertisements and at deposit windows, principal places of business, and branches.

In 2006, Congress enacted the FSRRA, which amended the FDICIA provisions and addressed many of the concerns raised in comments that were submitted in response to the 2005 proposed rule. The proposed rule now being issued by the FTC incorporates the FSRRA provisions. Although the FTC has not finalized a rule to implement these provisions, non-federally insured institutions are currently required to comply with these statutory disclosure requirements. It is estimated there are about 200 state-chartered credit unions that do not have federal share insurance.


The FSRRA continues to require financial institutions that lack federal insurance to disclose this fact to consumers. However, the FSRRA amends the prior FDICIA provisions as follows, which are incorporated in the proposed rule:

The rule will not apply to institutions that do not receive deposits in amounts less than the maximum insurance level, which is currently $250,000. This threshold will change to the extent the maximum insurance level is changed for banks under the Federal Deposit Insurance Act.

The required disclosures must be in a format, type size, and manner that are simple and easy to understand. The proposal does not provide specific requirements or details regarding the size and format of these disclosures.


Eric Richard • General Counsel • (202) 508-6742 •
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 •
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 •
Luke Martone • Senior Regulatory Counsel • (202) 508-6743 •