Deposit Insurer Proposes Scrapping Rule 370 and Rewriting Large-Bank Requirements

The Federal Deposit Insurance Corporation is seeking comment on a proposal to remove 12 CFR part 370, the rule that requires the largest insured depository institutions to build and maintain information technology systems capable of calculating deposit insurance coverage within 24 hours of a failure. The proposal, published as a notice of proposed rulemaking in the Federal Register of 4 November 2026 under document 2026–22495, also rewrites the FDIC’s large-bank determination rule in section 360.9 and indexes the dollar thresholds that trigger it. Comments must be received by 4 January 2027, under RIN 3064–AG35.

What the agency wants to change

Part 370, titled “Recordkeeping for Timely Deposit Insurance Determination,” was adopted in 2016 (81 FR 87734) and obliges any institution with two million or more deposit accounts to configure its own systems to compute insured and uninsured amounts by ownership right and capacity. The FDIC now argues that its own systems have improved enough to perform that calculation without forcing banks to duplicate the work. The agency would “remove and reserve” part 370 in its entirety.

The parallel amendments to section 360.9, “Large-Bank Deposit Insurance Determination Modernization,” would apply to institutions with at least $2 billion in deposits and either 250,000 deposit accounts or $20 billion in total assets. A new defined term, “larger covered institution,” would capture those with at least $2 billion in deposits and two million or more deposit accounts. Among the changes:

• Section 360.9 requirements would be applied to larger covered institutions.
• Twenty-six data fields would become mandatory for those institutions, 21 of which part 370 already requires.
• A standard data exemption would let a larger covered institution seek relief where it lacks information for a limited number of accounts.
• A safe harbor would protect institutions awaiting an FDIC response on an exemption or extension request.
• Release from section 360.9 would become automatic after three consecutive quarters below the covered-institution threshold.
• The definition of foreign deposits and related terms would be aligned with 12 CFR part 330.
• A new Appendix I to part 360 would set the format in which account holders such as brokers or agents submit beneficial-ownership information.

Who is affected and what it saves

As of 31 March 2026 the FDIC insures 4,287 institutions; it estimates 148 would be affected by the proposal, including the 31 currently subject to part 370, of which 29 would become larger covered institutions and remain subject to the revised section 360.9. Another 117 institutions already under section 360.9 would feel the amendments. The 31 are split by complexity: five highest, holding about $6.8 trillion in domestic deposits; 13 middle, with $3.6 trillion; and 13 lowest, with $1.4 trillion.

The FDIC estimates aggregate industry savings of about $33 million a year, offset in the first year by roughly $14 million in one-time transition costs, for a net saving near $19 million in year one and about $32 million annually thereafter, or some $31 million annualized over ten years at a 3.7 percent discount rate. Per-institution transition costs are put at $210,000 for each of 12 lowest-complexity institutions, $254,000 for each of 12 middle-complexity ones and $1.7 million for each of the five highest. Ongoing section 360.9 compliance is estimated at 185 hours, or about $23,000, per institution per year.

Deadlines, data and depositor impact

Institutions that are already larger covered institutions when a final rule takes effect would have six months to meet all section 360.9 requirements other than provisional holds, and 18 months for the provisional hold provisions they lost when part 370 released them from section 360.9. Institutions that cross the threshold later would get 18 months after the end of the second quarter in which they qualify. The agency also plans to retire OMB Control No. 3064–0202, eliminating an estimated 10,169 annual paperwork hours, and to delete depositor data no later than 60 days after a compliance review, replacing Social Security and tax identification numbers with synthetic identifiers.

The FDIC acknowledges the stakes for depositors of large banks. It says a delay in insurance determinations could produce inaccurate payouts, harming the Deposit Insurance Fund, or prolong the wait for account holders, but calls that outcome “highly unlikely” given its expanded claims-processing capacity. The proposal was issued by order of the Board of Directors, dated in Washington on 30 October 2026, with Jennifer M. Jones, Deputy Executive Secretary, signing; Shivali Nangia, Eli Engelbourg, Ryan P. Tetrick and legal staff are listed as contacts.

The outcome matters to every depositor at an institution with two million or more accounts: the rule being withdrawn is what currently obliges those banks to keep account-level data ready for a same-week insurance payout, and the replacement shifts more of that calculation onto the regulator’s own machinery and more of the disclosure burden onto account holders.

Source: Federal Register, Vol. 91, No. 212, 4 November 2026, Proposed Rules, p. 69642 (official reference: 2026–22495).