I am curious, upon the repeal of Reg Q, how many banks are no longer offering NOW accounts and are instead offering only interest checking accounts? More importantly, if your interest bearing accounts are no longer “NOW” accounts, what changes did you make? For ex. if a business wants to earn interest on their checking, do your have them sign anything that states they know that their insurance is limited to $250,000, it it treated like a separate product or was the decision made to use the same business interest product, but allow corp. etc. to be opened in this same product.

We've always had a seperate product for interest bearing commercial accounts (which were available to sole props and non profits). We just tweaked our marketing and sales trainign to say that now any commercial customer can have that particular product. If they want to convert their account, they can and will get new disclsoures for that account type.

We too have always had a separate interest bearing product that was offered to sole prop and non profits. I am struggling with the disclosure. What exactly did you change? Would you have time to provide me with the specific language. Was the disclosure change the only thing that took place on the day that the bank decided to pay interest to corporations? We have discussed this and instead of getting are heads around it we are becoming more confused. Does your bank use Deposit Pro?

Check the account agreement that covers your interest-bearing checking accounts for businesses. Look for any vestigial mentions of the right to require 7 days' notice of withdrawal (which should have been there for the NOW accounts for sole proprietors and non-profits). Get rid of those mentions because they aren't permitted for a demand deposit account.

If the bank unilaterally changed accounts from DDA to DDA with interest, the bank should have provided a disclosure under FDIC regulations at §330.16(c)(3). The notice isn't required if a customer request initiated the change. I recommend, though, that to reduce the potential for misunderstandings, you give the notice anyhow.

If the change is from NOW account to DDA with interest, though, there's no change in deposit insurance coverage, so no need for the notice.

I am confused. I do not see the need for the fdic ins notice.

Don't NOW accounts and interest bearing checking accounts have the same amount of FDIC insurance coverage?

The FAQ below seems to imply that if the coverage is not changing, then you do not have to give the notice.

8/9/11 FDIC Ins FAQ
31. What type of action by an IDI would trigger the notification requirement under 12 C.F.R. § 330.16(c)(3)?
Section §330.16(c)(3) provides that if an IDI “uses sweep arrangements, modifies the terms of an account, or takes other actions that result in funds no longer being eligible for full
coverage” under the Dodd-Frank Deposit Insurance Provision, the IDI “must notify the affected customer and clearly advise them, in writing, that such actions will affect their deposit insurance coverage.”

You are correct. I've adjusted my comment above. I must have been mentally "at the beach" that day.

No problem. I was just doing some research and it struck me as odd and I had to do some checking and make sure that I am not crazy.

No, you're not. And it was not my intent to drive you over the edge, either.