June 4, 1996
TO: BANK AND TRUST ADVISORY COMMITTEE No. 15-96
DIRECT MARKETING COMMITTEE No. 14-96
SALES FORCE MARKETING COMMITTEE No. 16-96
RE: FDIC SURVEY ON NONDEPOSIT INVESTMENT SALES
______________________________________________________________________________
The Federal Deposit Insurance Corporation recently issued the attached study
concerning bank compliance with the bank regulatory agencies Interagency Statement. The
FDIC retained an independent consultant that contacted 1,194 banks and asked for
recommendations on instruments that paid higher rates than certificates of deposit.
According to the FDICs survey, banks were more likely to make required disclosures in
face-to-face meetings than over the telephone. For example, the absence of FDIC disclosure
was explained in 72% of face-to-face contacts but only 45% of telephone contacts. Disclosures
were made more frequently by investment representatives who were members of the National
Association of Securities Dealers, Inc. or employed by a third party of affiliated broker-dealer,
than investment representatives associated with a bank. According to the FDIC study, this
finding indicates that the training of representatives leads to more frequent compliance with
the Interagency Statement.
Diane M. Butler
Director - Operations
and Fund Custody
Attachment