FDIC Part 370: Planning for Future Rule Changes
In my previous post, “FDIC Part 370 Rule Extension," I touched on the impact of extending your deadline for compliance. This post examines another aspect of resource management, cost, and project planning associated with compliance.
The FDIC’s July 2019 Part 370 amendment addressed the types of allowances that would be made for any future rule changes. Given that it is expected that this rule will evolve over time (especially post-audit) and similar rules have lasted for over a decade, I wanted to share my thoughts on how you should be planning for upcoming rule changes. Please see the links at the bottom for our previous Part 370 articles.
Covered Institution Request: Banks requested that the FDIC should provide a minimum fixed period of 12-18 months to update data records and make system changes following any changes to the regulation. The FDIC should use its discretion to determine whether this minimum period would be sufficient, or if more time would be necessary.
FDIC Response: The FDIC did not believe it was appropriate to set a minimum time period to resolve deficiencies because the amount of time needed would depend on the scope of the change. The FDIC will have the freedom to determine the appropriate time frame to re-establish compliance and will publish notice of the specified time period in the Federal Register.
Impact: Covered institutions should be able to quickly re-assemble their core Part 370 team or find external resources in a tight timeframe to address required rule changes and remain compliant.
Retaining Part 370 Expertise Post-Audit
As many of our clients are experiencing, it takes years for your internal staff and vendors to build the expertise necessary to thoroughly analyze and clean up depositor data and fulfill the IT system requirements.
Data Cleanup expertise may include the following:
- Knowledge of the landscape of your deposit systems and scope and purpose of each of those systems
- An understanding of the data elements that exist across all of your deposit platforms
- Expertise about how each of those data elements relate to the required FDIC output files
- Using ETL processes to synthesize new data elements as required by the rule
IT System expertise may include the following:
- Knowledge gained from analyzing the requirements of the FDIC IT Functional Guide
- Expertise from obtaining answers to aspects of the ITFG that are open for interpretation
- Experience translating the requirements of the ITFG into a comprehensive IT project plan
- Identification of the internal and external points of contact across various departments to obtain the necessary information to execute the project
- Improper identification of all required platforms
- Deficiencies in fields aggregated from these platforms and how they tie into your Part 370 IT System
- Deficiencies in the data quality required for your IT system to properly calculate insurance
- Inadequate logic in your IT system to properly calculate insurance for all 16 ORCs
Before you go, I’m curious…how are you thinking about future rule changes? Hit “Reply” and tell me about it. We can share our findings and hopefully learn from each other.
Stay in touch,
Loc Nguyen, Managing Partner at Fintria
Loc.Nguyen@Fintria.com | (800) 913-9730
Fintria is a RegTech solutions provider based out of the Washington D.C. area. With our combined 50+ years of FDIC DRR experience, our team has closed hundreds of banks and helped build the original FDIC insurance engine; there isn't a Part 370 question that we can't answer. We leveraged this experience to help our clients overcome Part 370 challenges and build our proven Part 370 product, RCS 370, which is currently live at the nation's largest institutions.
RCS 370 is an end-to-end solution that identifies data deficiencies and produces a complete dataset, contains an Insurance Engine that incorporates hundreds of rules for thousands of insurance scenarios and complies with the ITFG, and produces all required deliverables for the FDIC.
Fintria's Part 370 experts and proven product can supplement your project in the following ways:
- Project Plan Creation: Advice or assistance in forming your Part 370 team or developing a comprehensive project plan. This ensures you are executing steps in the proper order to mitigate risk of project delays from common insurance determination pitfalls
- SME and Data Resources: You have already developed your project plan, but have detailed questions or need support with data mapping, data cleanup, building a compliant IT system, or any of the steps outlined in our webinar
- Internal Audit Support: You have completed your Part 370 project and want your efforts internally audited before the FDIC audit
- Outsourcing ITFG Requirements: Integrate RCS 370 with your existing systems, allowing your team to focus on data cleanup
How Fintria Can Help for Future Rule Changes
Fintria's Part 370 experts are available to help supplement your existing data or IT team, as necessary.
Our clients that use RCS 370 will never have to worry about remaining in compliance due to future rules changes since we update the product as the rule evolves at no additional cost.
Since we can update one system for all of our clients, using our software dramatically reduces the risk of non-compliance, cost, and effort of resource ramp-up and ramp-down required to make future changes.
Previous Part 370 Articles
FDIC Part 370 Webinar - "A 10-Step Roadmap to Compliance": Based on the incredible feedback we've received from affected institutions, the FDIC, and trade organizations, we highly recommend spending 30 minutes to watch the replay.
"Part 370 Rule Extension": This article details how we are advising our clients to maximize the benefits of the one-year extension.
"Fintria’s ABA Conference Podcast": Fintria's live podcast at the ABA Regulatory Compliance Conference
"Fintria Launches FDIC Rule 370 Product that Guarantees Compliance and Reduces Cost": Fintria's RCS 370 product launch announcement