- within Privacy and Accounting and Audit topic(s)
In an earlier Financial Institutions Alert, we reported on the
Transaction Account Guarantee Program (the "TAG Program")
adopted by the Federal Deposit Insurance Corporation (FDIC). The
TAG Program provides full deposit insurance coverage for
noninterest-bearing deposit transaction accounts, regardless of
dollar amount, to financial institutions that did not opt out of
the program prior to Dec. 5, 2008. Financial institutions that did
not opt out have been paying quarterly an annualized 10 basis point
assessment for deposits not otherwise covered by the existing
deposit insurance limit of $250,000.
The FDIC has extended the expiration date of the TAG Program from
Dec. 31, 2009 until June 30, 2010. Participating financial
Institutions will remain in the extended TAG Program unless they
opt out by Nov. 2, 2009. Financial institutions that do not opt out
will pay a quarterly assessment at an increased annualized rate
ranging from 15 to 25 basis points, depending upon the financial
institution's Risk Category rating. All financial institutions
that offer noninterest-bearing transaction accounts will need to
update their lobby and website disclosures to reflect the June 30,
2010 expiration date.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
