Topic: Nondeposit Investment Products
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One of our customers has an account with more than $250,000 in it, and the customer is not interested in repurchase agreements or CEDARS. Are there any other options?
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There is an IDFPR Interpretive Letter, 98-12, explaining that state banks may collateralize a customer’s deposits. The letter states that the Illinois Banking Act does allow the bank to pledge assets to secure deposit accounts, but you should contact the FDIC to see if you need the FDIC’s written consent before pledging any assets.
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We are revising our Retail Repurchase Agreement Policy, and I came across a reference to 12 USC 82 and an OCC interpretive ruling. Are those still in effect?
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In direct response to your question, the law that you cited (12 USC 82) has been repealed and is no longer in effect. As a result, the OCC Interpretive Ruling 7.1131 that you cite, is no longer in effect. Also, we do not believe that the law or the OCC ruling would have been relevant…
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One of our brokers, who is a dual employee with our organization and an investment company, just joined our management committee, which receives daily large deposit and loan change reports. Can we share those reports with the dual employee?
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We do not believe that the federal privacy regulations would prevent you from sharing the management committee reports with the dual employee. With that said, unless the joint marketing agreement exception applies, you will have to follow the privacy regulations’ requirements as to any information disclosed to the investment company through the dual employee. Under…
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Are bankers that are licensed to sell insurance, mutual funds, and stocks prohibited from being paid a percentage of the revenue earned through sales?
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Insurance Once an employee is licensed as an insurance producer, Illinois law does not restrict you from paying commissions, service fees, or other valuable consideration for any insurance sales made by the employee. See 215 ILCS 5/500-80(a)
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Are there any regulations prohibiting a bank from establishing a brokerage/investment firm within its banking facility?
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We are not aware of any problem on the banking regulation side. For example, percentage lease arrangements have been around for at least a quarter century. Those, of course, involve outside brokerage firms (and at one time, insurance agencies) with a presence in the bank.