WASHINGTON — The Federal Deposit Insurance Corp. approved a rule Friday designed to simplify and expand deposit insurance coverage for mortgage servicers' accounts to relieve investor anxiety about the possibility of steep losses as a result of a bank failure.

"This simplification of the coverage rules for mortgage servicing accounts will help prevent losses to otherwise insured depositors and prevent withdrawals of deposits for principal and interest payments from depository institutions," said FDIC Chairman Sheila C. Bair.

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