US Code

Public Law 119-73 (01/23/2026)

12 U.S.C. § 1831t

Depository institutions lacking Federal deposit insurance

(a)

Annual independent audit of private deposit insurers

(1)

Audit required

Any private deposit insurer shall obtain an annual audit from an independent auditor using generally accepted auditing standards. The audit shall include a determination of whether the private deposit insurer follows generally accepted accounting principles and has set aside sufficient reserves for losses.

(2)

Providing copies of audit report

(A)

Private deposit insurer

The private deposit insurer shall provide a copy of the audit report—
(i)
to each depository institution the deposits of which are insured by the private deposit insurer, not later than 14 days after the audit is completed;
(ii)
to the appropriate supervisory agency of each State in which such an institution receives deposits, not later than 7 days after the audit is completed; and
(iii)
in the case of depository institutions described in subsection (e)(2)(A) the deposits of which are insured by the private insurer which are members of a Federal home loan bank, to the Federal Housing Finance Agency, not later than 7 days after the audit is completed.
(B)

Depository institution

Any depository institution the deposits of which are insured by the private deposit insurer shall provide a copy of the audit report, upon request, to any current or prospective customer of the institution.

(3)

Enforcement by appropriate State supervisor

Any appropriate State supervisor of a private deposit insurer, and any appropriate State supervisor of a depository institution which receives deposits that are insured by a private deposit insurer, may examine and enforce compliance with this subsection under the applicable regulatory authority of such supervisor.

(b)

Disclosure required

Any depository institution lacking Federal deposit insurance shall, within the United States, do the following:
(1)

Periodic statements; account records

1

1 So in original. The period probably should not appear.
Include conspicuously in all periodic statements of account, on each signature card, and on each passbook, certificate of deposit, or share certificate. a notice that the institution is not federally insured, and that if the institution fails, the Federal Government does not guarantee that depositors will get back their money.

(2)

Advertising; premises

(A)

In general

Include clearly and conspicuously in all advertising, except as provided in subparagraph (B); and at each station or window where deposits are normally received, its principal place of business and all its branches where it accepts deposits or opens accounts (excluding automated teller machines or point of sale terminals), and on its main Internet page, a notice that the institution is not federally insured.

(B)

Exceptions

The following need not include a notice that the institution is not federally insured:
(i)
Any sign, document, or other item that contains the name of the depository institution, its logo, or its contact information, but only if the sign, document, or item does not include any information about the institution’s products or services or information otherwise promoting the institution.
(ii)
Small utilitarian items that do not mention deposit products or insurance if inclusion of the notice would be impractical.
(3)

Acknowledgment of disclosure

(A)

New depositors obtained other than through a conversion or merger

With respect to any depositor who was not a depositor at the depository institution before , and who is not a depositor as described in subparagraph (B), receive any deposit for the account of such depositor only if the depositor has signed a written acknowledgement that—
(i)
the institution is not federally insured; and
(ii)
if the institution fails, the Federal Government does not guarantee that the depositor will get back the depositor’s money.
(B)

New depositors obtained through a conversion or merger

With respect to a depositor at a federally insured depository institution that converts to, or merges into, a depository institution lacking federal insurance after , receive any deposit for the account of such depositor only if—
(i)
the depositor has signed a written acknowledgement described in subparagraph (A); or
(ii)
the institution makes an attempt, as described in subparagraph (D) and sent by mail no later than 45 days after the effective date of the conversion or merger, to obtain the acknowledgment.
(C)

Current depositors

Receive any deposit after , for the account of any depositor who was a depositor on that date only if—
(i)
the depositor has signed a written acknowledgement described in subparagraph (A); or
(ii)
the institution has complied with the provisions of subparagraph (E) which are applicable as of the date of the deposit.
(D)

Alternative provision of notice to new depositors obtained through a conversion or merger

(i)

2
2 So in original. No cl. (ii) has been enacted.
  In general

Transmit to each depositor who has not signed a written acknowledgement described in subparagraph (A)—
(I)
a conspicuous card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and
(II)
accompanying materials requesting the depositor to sign the card, and return the signed card to the institution.
(E)

Alternative provision of notice to current depositors

(i)

In general

Transmit to each depositor who was a depositor before , and has not signed a written acknowledgement described in subparagraph (A)—
(I)
a conspicuous card containing the information described in clauses (i) and (ii) of subparagraph (A), and a line for the signature of the depositor; and
(II)
accompanying materials requesting the depositor to sign the card, and return the signed card to the institution.
(ii)

Manner and timing of notice

(I)

First notice

Make the transmission described in clause (i) via mail not later than three months after .

(II)

Second notice

Make a second transmission described in clause (i) via mail not less than 30 days and not more than three months after a transmission to the depositor in accordance with subclause (I), if the institution has not, by the date of such mailing, received from the depositor a card referred to in clause (i) which has been signed by the depositor.

(c)

Manner and content of disclosure

To ensure that current and prospective customers understand the risks involved in foregoing Federal deposit insurance, the Bureau, by regulation or order, shall prescribe the manner and content of disclosure required under this section, which shall be presented in such format and in such type size and manner as to be simple and easy to understand.

(d)

Exceptions for institutions not receiving retail deposits

The Bureau may, by regulation or order, make exceptions to subsection (b) for any depository institution that, within the United States, does not receive initial deposits of less than an amount equal to the standard maximum deposit insurance amount from individuals who are citizens or residents of the United States, other than money received in connection with any draft or similar instrument issued to transmit money.

(e)

Definitions

For purposes of this section:
(1)

Appropriate supervisor

The “appropriate supervisor” of a depository institution means the agency primarily responsible for supervising the institution.

(2)

Depository institution

The term “depository institution” includes—
(A)
section 461(b)(1)(A)(iv) of this title any entity described in ; and
(B)
any entity that, as determined by the Bureau—
(i)
is engaged in the business of receiving deposits; and
(ii)
could reasonably be mistaken for a depository institution by the entity’s current or prospective customers.
(3)

Lacking Federal deposit insurance

A depository institution lacks Federal deposit insurance if the institution is not either—
(A)
an insured depository institution; or
(B)
12 U.S.C. 1752 an insured credit union, as defined in section 101 of the Federal Credit Union Act [].
(4)

Private deposit insurer

The term “private deposit insurer” means any entity insuring the deposits of any depository institution lacking Federal deposit insurance.

(5)

Bureau

The term “Bureau” means the Bureau of Consumer Financial Protection.

(f)

Enforcement

(1)

Limited enforcement authority

12 U.S.C. 551115 U.S.C. 41Compliance with the requirements of subsections (b), (c), and (e), and any regulation prescribed or order issued under such subsection, shall be enforced under the Consumer Financial Protection Act of 2010, by the Bureau, subject to subtitle B of the Consumer Financial Protection Act of 2010 [ et seq.], and under the Federal Trade Commission Act ( et seq.) by the Federal Trade Commission.

(2)

Broad State enforcement authority

(A)

In general

Subject to subparagraph (C), an appropriate State supervisor of a depository institution lacking Federal deposit insurance may examine and enforce compliance with the requirements of this section, and any regulation prescribed under this section.

(B)

State powers

For purposes of bringing any action to enforce compliance with this section, no provision of this section shall be construed as preventing an appropriate State supervisor of a depository institution lacking Federal deposit insurance from exercising any powers conferred on such official by the laws of such State.

(C)

Limitation on State action while Federal action pending

If the Bureau or Federal Trade Commission has instituted an enforcement action for a violation of this section, no appropriate State supervisory agency may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Bureau or Federal Trade Commission for any violation of this section that is alleged in that complaint.

Sept. 21, 1950, ch. 967, § 2Pub. L. 102–242, title I, § 151(a)(1)105 Stat. 2282Pub. L. 102–550, title XVI106 Stat. 4078Pub. L. 103–325, title III, § 340(a)108 Stat. 2237Pub. L. 109–173, § 2(c)(3)119 Stat. 3602Pub. L. 109–351, title V, § 505120 Stat. 1975Pub. L. 111–203, title X, § 1090(2)124 Stat. 2094Pub. L. 114–94, div. G, title LXXXII, § 82001(b)129 Stat. 1796([43], formerly § 2[40], as added , , ; renumbered § 2[43], § 1602(b), , ; amended , , ; , , ; , , ; , , ; , , .)

Editorial Notes

References in Text

Pub. L. 111–203124 Stat. 1955section 5301 of this titleThe Consumer Financial Protection Act of 2010, referred to in subsec. (f)(1), is title X of , , , which enacted subchapter V (§ 5481 et seq.) of chapter 53 of this title and enacted, amended, and repealed numerous other sections and notes in the Code. Subtitle B of the Act is classified generally to part B (§ 5511 et seq.) of subchapter V of chapter 53 of this title. For complete classification of this Act to the Code, see Short Title note set out under and Tables.

act Sept. 26, 1914, ch. 31138 Stat. 717section 58 of Title 15The Federal Trade Commission Act, referred to in subsec. (f)(1), is , , which is classified generally to subchapter I (§ 41 et seq.) of chapter 2 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see and Tables.

Amendments

Pub. L. 114–942015—Subsec. (a)(2)(A)(iii). added cl. (iii).

Pub. L. 111–203, § 1090(2)(A)2010—Subsecs. (c), (d), (e)(2)(B). –(C)(i), substituted “Bureau” for “Federal Trade Commission”.

Pub. L. 111–203, § 1090(2)(C)(ii)Subsec. (e)(5). , added par. (5).

Pub. L. 111–203, § 1090(2)(D)(i)Subsec. (f)(1). , added par. (1) and struck out former par. (1). Prior to amendment, text read as follows: “Compliance with the requirements of subsections (b), (c) and (e), and any regulation prescribed or order issued under any such subsection, shall be enforced under the Federal Trade Commission Act by the Federal Trade Commission.”

Pub. L. 111–203, § 1090(2)(D)(ii)Subsec. (f)(2)(C). , added subpar. (C) and struck out former subpar. (C). Prior to amendment, text read as follows: “If the Federal Trade Commission has instituted an enforcement action for a violation of this section, no appropriate State supervisor may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission for any violation of this section that is alleged in that complaint.”

Pub. L. 109–351, § 505(a)2006—Subsec. (a)(3). , added par. (3).

Pub. L. 109–351, § 505(b)Subsec. (b)(1). , substituted “or share certificate.” for “or similar instrument evidencing a deposit”.

Pub. L. 109–351, § 505(c)Subsec. (b)(2). , amended heading and text generally. Prior to amendment, text read as follows: “Include conspicuously in all advertising and at each place where deposits are normally received a notice that the institution is not federally insured.”

Pub. L. 109–351, § 505(d)Subsec. (b)(3). , amended par. (3) generally. Prior to amendment, par. (3) related to acknowledgement of disclosure and consisted of subpars. (A) to (C).

Pub. L. 109–351, § 505(e)Subsec. (c). , amended heading and text generally. Prior to amendment, text read as follows: “To ensure that current and prospective customers understand the risks involved in foregoing Federal deposit insurance, the Federal Trade Commission, by regulation or order, shall prescribe the manner and content of disclosure required under this section.”

Pub. L. 109–173Subsec. (d). substituted “an amount equal to the standard maximum deposit insurance amount” for “$100,000”.

Pub. L. 109–351, § 505(f)Subsec. (e). , redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to eligibility for Federal deposit insurance.

Pub. L. 109–351, § 505(g)Subsec. (f). , amended heading and text generally. Prior to amendment, text read as follows: “Compliance with the requirements of this section, and any regulation prescribed or order issued under this section, shall be enforced under the Federal Trade Commission Act by the Federal Trade Commission.”

Pub. L. 109–351, § 505(f)(2), redesignated subsec. (g) as (f). Former subsec. (f) redesignated (e).

Pub. L. 109–351, § 505(f)(2)Subsec. (g). , redesignated subsec. (g) as (f).

Pub. L. 103–3251994—Subsec. (b)(3). amended heading and text of subsec. (b)(3) generally. Prior to amendment, text read as follows: “Receive deposits only for the account of persons who have signed a written acknowledgment that the institution is not federally insured, and that if the institution fails, the Federal Government does not guarantee that they will get back their money.”

Statutory Notes and Related Subsidiaries

Effective Date of 2010 Amendment

Pub. L. 111–203section 1100H of Pub. L. 111–203section 552a of Title 5Amendment by effective on the designated transfer date, see , set out as a note under , Government Organization and Employees.

Effective Date of 2006 Amendment

Pub. L. 109–173section 2(e) of Pub. L. 109–173section 1785 of this titleAmendment by effective , see , set out as a note under .

Effective Date of 1994 Amendment

Pub. L. 103–325, title III, § 340(b)108 Stat. 2238

12 U.S.C. 1831t(b)(3)“Section 43(b)(3) of the Federal Deposit Insurance Act [], as amended by subsection (a), shall take effect in accordance with section 151(a)(2)(D) of the Federal Deposit Insurance Corporation Improvement Act of 1991 [see Effective Date note below].”
, , , provided that:

Effective Date

Pub. L. 102–242, title I, § 151(a)(2)105 Stat. 2284

12 U.S.C. 1831t“Section 40 of the Federal Deposit Insurance Act [] (as added by paragraph (1)) shall become effective on the date of enactment of this Act [], except that—
“(A)
paragraphs (1) and (2) of subsection (b) shall become effective 1 year after the date of enactment of this Act;
“(B)
during the period beginning 1 year after that date of enactment of this Act and ending 30 months after that date of enactment, subsection (b)(1) shall apply with ‘, and that if the institution fails, the Federal Government does not guarantee that depositors will get back their money’ omitted;
“(C)
subsection (e) shall become effective 2 years after that date of enactment; and
“(D)
subsection (b)(3) shall become effective 30 months after that date of enactment.”
, , , provided that:

Viability of Private Deposit Insurers

Pub. L. 102–242, title I, § 151(b)105 Stat. 2285Pub. L. 102–550, title XVI, § 1603(f)(1)106 Stat. 4081

“(1)

Deadline for initial independent audit .—

12 U.S.C. 1831t(a)(1)The initial annual audit under section 43(a)(1) of the Federal Deposit Insurance Act [] (as added by subsection (a)) shall be completed not later than 120 days after the date of enactment of this Act [].
“(2)

Business plan required .—

Not later than 240 days after the date of enactment of this Act [], any private deposit insurer shall provide a business plan to each appropriate supervisor of each State in which deposits are received by any depository institution lacking Federal deposit insurance the deposits of which are insured by a private deposit insurer. The business plan shall explain in detail why the private deposit insurer is viable, and shall, at a minimum—
“(A)
describe the insurer’s—
“(i)
underwriting standards;
“(ii)
resources, including trends in and forecasts of assets, income, and expenses;
“(iii)
risk-management program, including examination and supervision, problem case resolution, and remedies; and
“(B)
include, for the preceding 5 years, copies of annual audits, annual reports, and annual meeting agendas and minutes.
“(3)

Definitions .—

12 U.S.C. 1831t(f)For purposes of this subsection, the terms ‘appropriate supervisor’, ‘depository institution’, ‘lacking Federal deposit insurance’, and ‘private deposit insurer’ have the same meaning as in section 43(f) of the Federal Deposit Insurance Act [] (as added by subsection (a)).”
, , , as amended by , , , provided that: