The Importance of 24 Hours in Compliance - Macro Financial
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The Importance of 24 Hours in Compliance

The Importance of 24 Hours in Compliance

Closing a bank is a whirlwind of activity that begins with shutdown of all bank depositor activities on a Friday evening followed by a complete reconciliation of accounts though the weekend to be ready for depositors on Monday morning (either with a new account or a check).  This activity is simulated when testing compliance with the Part 370 rule as outlined in the FDIC IT Functional Guide.  As a result of this, being compliant with the Part 370 rule set means having the ability to complete the depositor accounts’ insurance determination within 24 hours of notification.  This process is handled in the following four steps: Load, Calculate, Report and Remediate.  The first three must be completed within 24 hours:

Load:  Restrict access to all deposit accounts, notify fiduciaries for alternative recordkeeping accounts, and complete end-of-day processing along with maintaining supporting documentation.

Calculate:  With all the depositor accounts aggregated at one time, all deposit insurance calculations may be completed.

Report:  Generate output files and reports in the specified formats and process alternative recordkeeping files with transactional features for further remediation.

These steps have to be carefully planned and regularly rehearsed to ensure compliance.  Preparing the data and then calculating the insurance requirements for tens of millions of depositor records requires tremendous processing power to complete the task in enough time to handle all the reporting and alternative recordkeeping sorting to be done within 24 hours.

Complete and sufficient requests are expected prior to compliance date (April 2020) and will be considered by FDIC with responses expected within 120 days of receipt.  Please refer to the FDIC website for complete and official instructions on the guidelines for relief.