(August 11 – 15:45 ET) – Canada Deposit Insurance Corp. say it has authorized Dresdner Bank Canada and ABN AMRO Bank Canada to opt out of CDIC membership. CDIC only grants such authorization after it is satisfied that all statutory conditions have been met, including the requirement that the bank’s deposits that are less than $150,000 and payable in Canada are less than 1% of its total deposits.
Since the CDIC by-laws on opting out were put in place in October 1999, a total of seven institutions have chosen this option.
“The purpose of the opting-out by-laws is to allow financial institutions greater flexibility,” said Jean Pierre Sabourin, CDIC president and CEO. “There are also provisions in the by-laws to ensure that the depositors of institutions that choose to opt out are fully informed that their deposits are not insured and that they are given options.”
An eligible financial institution must give notice to all depositors when it applies to opt out of CDIC membership. It must give customers with deposits eligible for CDIC protection the choice of withdrawing their funds or leaving them with the institution under an express acknowledgement that the funds will no longer be eligible for CDIC insurance.
In accordance with CDIC’s opting-out provisions, the Policy of Deposit Insurance of Dresdner Bank Canada, and ABN AMRO Bank Canada has been cancelled. Each opted-out institution has a responsibility to post notices in its branches indicating that it is not a member of CDIC.
-IE Staff