Did the repeal of Reg Q - prohibiting corporations from earning interest on a demand account -- ALSO eliminate the references in Reg D & Q to paying premiums on deposits?

No. Although Reg Q was repealed, the definition of interest was transferred to the FDIC Deposit Insurance Coverage Rule 330. Additionally, the section on premiums was also transferred to the same rule.

Q is gone. The only real purpose for the definitions of interest and for the premium rules, which now only exist in the FDIC's regulation for deposit insurance, is to create a bright line definition for payment of interest on transaction accounts.

So, if you tell your customer that his non-interest bearing DDA will be protected until 12/31/12 by the FDIC's unlimited deposit insurance provision in 12 CFR §330.16, but you enticed the customer to open the account with a $250 "gift" for the opening deposit, the gift will be considered interest under the regulation, and the account won't be fully covered under §330.16.

Bump.

It's been a long, brutal day so I'd like to throw a bit of a new scenario into this.

Company A serves the public good. They have a sister agency that is a 501(c)(3). In the process of bidding on the business, we are considering making a pledge of a donation to the sister agency if we get the account.

I think that would be a bonus and reportable as interest (though to the non-profit, it's not a big deal). But, since it's interest, Company A would not be eligible to have unlimited deposit insurance. Am I right in this scenario?

TIA