Some banks incorrectly reporting uninsured deposit amounts, FDIC says in letter

Some banks are incorrectly omitting uninsured deposits that are collateralized by pledged assets from their call report estimates of uninsured deposits, the Federal Deposit Insurance Corp. (FDIC) said Monday.

In a Financial Institution Letter (FIL), the agency said the existence of collateral “has no bearing on the portion of a deposit that is covered by federal deposit insurance.” It also said some institutions “incorrectly reduced the amount reported on Schedule RC-O by excluding intercompany deposit balances of subsidiaries.”

The FDIC said each insured depository institution is responsible for the accuracy of the data in its call report and for filing amendments as necessary to ensure call report accuracy. Along that line, it said that:

  • In reporting uninsured deposits, if an IDI has deposit accounts with balances in excess of the federal deposit insurance limit that it has collateralized by pledging assets, such as deposits of the U.S. Government and of states and political subdivisions in the U.S., the IDI should make a reasonable estimate of the portion of these deposits that is uninsured using the data available from its information systems.
  • The General Instructions for the Call Reports state that all deposits of subsidiaries (except an insured depository institution subsidiary that is accounted for under the equity method of accounting instead of consolidating) that are consolidated and, therefore, eliminated from reported deposits on the balance sheet, must be reported in Schedule RC-O, items 1 through 3, Memorandum item 1, and, if applicable, Memorandum item 2, estimated amount of uninsured deposits.

“The chief financial officer (or the individual performing an equivalent function) and multiple directors of each IDI are required to attest to the correctness of the Call Report,” the agency wrote in the letter. “Consistent with the requirement to file accurate Call Reports, IDIs that have incorrectly reported uninsured deposits should amend their Call Reports by making the appropriate changes to the data, and submitting the revised data file to the Central Data Repository (CDR) using the same processes as the original filing. Institutions can submit up to three years of revisions, or more, if appropriate,” it said.

FDIC FIL-37-2023