Since it appears that IOLTA accounts will now have full, unlimited FDIC insurance protection, I am assuming I do not need to redisclose to my accountholders. I have already sent the required notice with statements.

I am assuming that I can just tweak my web disclosure and lobby disclosures to exclude the IOLTA mention in the phrase ...

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").


Is this correct and/or do I need to specifically say that IOLTA accounts have unlimited coverage?

You may look at the ABA Q & A on this suject as it has not been signed by the President. I would not make any changes until FDIC sends out their official notice.

I believe that the FDIC will issue a FIL explaining how to respond to this change in complying with the disclosure requirements in the final rule.

CubDave- did you receive the ICBA Notice or did you get this informaiton from another source? Just wondering. I was a little bothered that ICBA refers to the DFA rule as a TAG extension when FDIC and DFA clearly state that TAG expires on 12/31/10.

ABA Daily NewsByte

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 www.fdic.gov.

Fixed

Here's what I put together. I'm holding off on posting this until I see the FDIC guidance that is supposed to be forthcoming.

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 also includes Interest on Lawyers Trust Accounts ("IOLTAs"). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts.

For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.

Listened in on the FDIC teleconference on this and they were adamant that the lobby and website disclosure could not be modified at all. Seems to me that we can't modify now until they give us the new form.

I did add a heading to mine -- "This notice is being sent to you in compliance with the Dodd-Frank Act." I plan to use this on all versions of all required disclosures, translation, we are just doing what your elected officials are telling us to do - we don't make this stuff up!!

What teleconference? Was it before or after the FDIC's notice last week that we could include IOLTAs with non-onterest-bearing accounts?

So . . . We have to go ahead with the lobby notices but don't have to send the individual letters?

NMB, there had been talk of including IOLTAs, but not yet official when the FDIC held the meetings. Questions were asked several times about modifying the lobby notice and the website notice and they kept saying that the notice to be mailed to customers could be customized, but that the other notices were mandated by reg and could not be changed.

From the notice inserted by the FDIC on its site, at
http://www.fdic.gov/deposit/deposits/changes2.html --

1. TAG-participating banks don't need to notify IOLTA accounts under §330.16(c)(2). They do have to notify TAG-covered NOW account depositors.

2. No change is permitted to the FDIC notice for lobbies and websites under §330.16(c)(1). If the FDIC doesn't have its revised regulation out and a revised notice published by Friday (it won't -- the president is on vacation), you have to use the current wording by 12/31 to be in compliance.

3. If you haven't printed those lobby notices yet, put them on cheap paper because it's likely they will be replaced some time in January with the new wording.

In short, if you already sent your notices and posted your signs, prior to the latest IOLTA changes; you are in compliance -- today. Do nothing more until the Pres signs the new law and then FDIC will send us our marching orders and the wording for the required disclosures. Right?

Spot on, SMQ

John B -- just to confirm: are you saying that we should still post the notice that says IOLTAs are not included in the definition -- until such time as the FDIC issues revised guidance? We are not a TAGP bank.

I read somewhere that we have to keep BOTH notices (TAGP and the new extension) posted for one day (tomorrow). Anyone else hear or read this?

Unfortunately, yes. The Bill hasn't been signed, so you cannot assume anything. And the language of the posted notice doesn't change based on whether or not you ever participated in the TAGP.

Most definitely. It's even confirmed in the FDIC's FAQ on the DFA insurance coverage notices.

John, do you think that would be a requirement on the website too?

Tink, I think you are supposed to wait on the new notice for lobby and website. If you have not mailed notices to IOLTAs yet, you do not have to send them.

From FDIC site:
".... the FDIC is advising insured depository institutions that they do not have to send individual notices to IOLTA depositors, as is currently required. After the bill is signed, institutions that have already notified IOLTA depositors may provide a revised notice advising that IOLTAs will receive unlimited insurance coverage as noninterest-bearing transaction accounts for two years ending December 31, 2012. The FDIC's guidance will also provide new language for the posted notice required by 12 CFR § 330.16."

Emphasis added.

He signed it yesterday, per whitehouse.gov. FDIC's site hasn't caught on yet.

I got a FIS notice today that the Pres signed it Yesterday. No guidance as of yet for FDIC or ABA. I am not clear if we should put up the new one with IOLTAs not covered or not.

What are others doing.

ABA has updated the FAQs, but I haven't seen any further news releases.

Until the FDIC changes the rule...you keep it as it is. (as if the Pres hasn't signed anything yet). We can't change until the FDIC changes the reg.

And here is where we have "risk management". What's the risk? We tried, are you on vacation? are the examiners in your bank today, tomorrow, Monday? So, who knows when it went up?

Once the FDIC gives us the go, can you physically get everything printed and up at every branch by closing time tomorrow? without making everyone nuts? Are you working on it and will have it up as soon as reasonably practicable (early next week)? What happens if it is not up Friday? Fines? Jail? So be it! We are doing our best, if someone else thinks they can do it better, have at it. If this is all it takes for me to lose my job, well,,,,, have at it, and welcome to the world of Dodd-Frank. Personally, I think greeter looks pretty good most days.

I am in agreement with RR Joker. But I have also told my CO that I will not use the teller line or look at our website tomorrow. Belated Christmas gift!

Bartman, the FDIC site has been modified to show that the President signed the legislation into law on December 29, 2010.