With the exception of FDIC advertising requirements, FDIC insurance rules are generally not our area of expertise. However, we have been receiving so many questions from our clients about changes to the FDIC’s Transaction Account Guarantee Program (TAGP) that I decided to put together some information.
Due to the Frank-Dodd Reform Act, your bank may need to post a new lobby disclosure and possibly be required to provide new disclosures within the next 45 days. What am I talking about? Well, if your bank offers noninterest-bearing transaction accounts you will need to post a notice in your lobby that explains from December 31, 2010 through December 31, 2012 all noninterest-bearing transaction accounts are fully insured. In addition, this temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000.00 available to depositors under the FDIC’s general deposit insurance rules.
Here is the sample lobby notice:
NOTICE OF CHANGES IN TEMPORARY FDIC INSURANCE COVERAGE FOR TRANSACTION ACCOUNTS
All funds in a “noninterest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC’s general deposit insurance rules.
The term “noninterest-bearing transaction account” includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, money-market deposit accounts, and Interest on Lawyers Trust Accounts (“IOLTAs”).
For more information about temporary FDIC insurance coverage of transaction accounts, visit http://www.fdic.gov/.
In addition, if your bank participates in the TAGP, a notice is required to be mailed to customers with negotiable order of withdrawal accounts that are fully insured as of the date under the TAGP program and to depositors with Interest on Lawyer Trust Accounts that, as of January 1, 2011, these accounts will no longer be eligible for unlimited protection. This notice must be provided prior to December 31, 2010.
David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.
He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.
David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.