FDIC not insuring deposits in foreign branches of U.S. banks

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There, a proposal from bank regulators would prohibit non-European banks from accepting deposits in the U.K. unless the bank makes it clear that, if it fails, U.K. depositors will be treated the same as those in the bank’s home country. Some American banks will likely change their deposit agreements to give a preference to U.K. branch deposits and comply with that proposal.

Those deposits won’t have the backing of the FDIC’s Deposit Insurance Fund, however, which the agency uses to protect consumers with money in failed banks. 

"The final rule protects the Deposit Insurance Fund, while at the same time recognizing both the FDIC's commitment to maintaining financial stability through the prompt payment of deposit insurance and the evolving nature of the global banking system," FDIC Chairman Martin Gruenberg said in a statement.

The rule does not affect money in overseas military financial institutions, which are overseen by the Defense Department and are insured by the FDIC.