As I have mentioned in previous columns, U.S. branches of non-U.S. banks may not take “retail deposits,” which until recently were defined as deposits of less than $100,000. That amount now is $250,000, and U.S. branches of non-U.S. banks were required to put into place, by March 1, 2010, policies and procedures to come into compliance with the new requirements. This month’s column will discuss the background for these changes.
Statutory Background
Prior to 1978, there was no requirement that U.S. branches of non-U.S. banks that took deposits carry federal deposit insurance.1 The International Banking Act (IBA), enacted in 1978, included the requirement that a U.S. branch of a non-U.S. bank obtain deposit insurance from the Federal Deposit Insurance Corporation (FDIC) unless the branch accepted deposits in amounts of $100,000 or more, or either the FDIC (for state-licensed branches) or the Office of the Comptroller of the Currency (OCC) (for OCC-licensed federal branches) determined by law or regulation that the branch was not engaged in “domestic retail deposit activities” requiring deposit insurance protection.2
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