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#1418482 - 07/22/10 02:20 PM
Non-interest bearing Transaction Accounts
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Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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The bill extended the unlimited deposit insurance coverage for non-interest bearing transaction accounts for two years. Has anyone figured out when the two years starts? From the signing date or from the current expiration date?
Last edited by John Burnett; 07/25/10 11:29 PM. Reason: Corrected Subject
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#1418545 - 07/22/10 03:06 PM
Re: Non-interest bearing Transactions
DD Regs
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Posts: 6,577
Down Yonder
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AuditorK posted this in the FDIC Now Permanent thread: I guess we'll also need to update our TLGP - Transaction Account Guarantee lobby disclosure as well. This has been changed with the reform bill's signing. According to the chart on this webpage: FDIC Deposit Insurance Summary Beginning 12/31/10 through 12/31/12, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account, at all FDIC-insured institutions (regardless of whether they were participating in the TAG program).
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#1418561 - 07/22/10 03:15 PM
Re: Non-interest bearing Transactions
3-2-Go
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Somewhere in the middle
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I saw that, thank you. Now to update our signs.
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#1418589 - 07/22/10 03:35 PM
Re: Non-interest bearing Transactions
DD Regs
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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Do we have to updated the signs now or wait until 12/31/2010?
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#1418605 - 07/22/10 03:45 PM
Re: Non-interest bearing Transactions
ahkcompliance
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Power Poster
Joined: Apr 2005
Posts: 3,663
TN
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I was wondering the same thing....
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#1418616 - 07/22/10 03:49 PM
Re: Non-interest bearing Transactions
Dani York, CRCM
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Somewhere in the middle
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I am updating them now.
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#1418618 - 07/22/10 03:50 PM
Re: Non-interest bearing Transactions
Dani York, CRCM
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Joined: Feb 2003
Posts: 962
PA
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We participate in the TAG program and are immediately changing the expiration date on our notice from 12/31/10 to 12/31/12.
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#1418631 - 07/22/10 03:54 PM
Re: Non-interest bearing Transactions
AuditorK
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Midwest
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We are not participating...
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#1418914 - 07/22/10 07:47 PM
Re: Non-interest bearing Transactions
ahkcompliance
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Platinum Poster
Joined: Feb 2010
Posts: 960
Illinois
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"Beginning 12/31/10 through 12/31/12, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account, at all FDIC-insured institutions"
I see this on the FDIC site, but when/how was it changed. I didn't see it in the reform bill (although I'm not saying I read every word). Was it in the bill, or just a fiat from FDIC?
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#1418929 - 07/22/10 08:00 PM
Re: Non-interest bearing Transactions
MyBrainHurts
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Gold Star
Joined: May 2006
Posts: 452
Between here and there
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TARP GUARANTEE expires 12/31/10. It is not extended. In its place effective 12/31/10 is unlimited insurance coverage for non-interest bearing transaction accounts that is scheduled for repeal on 1/1/13. (see Sec. 343 of Dodd-Frank). TARP=Guarantee, new coverage is insurance. Note that the insurance effective 12/31/10 will NOT include NOW or IOLTA accounts. No reason to change any signage right now. We're waiting to hear more from FDIC, to see if they will decide to include NOW and IOLTAs, even though the Act excludes them.
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#1419285 - 07/23/10 03:34 PM
Re: Non-interest bearing Transactions
MyScamper
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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We are not participating in the program. So does that mean the unlimited insurance from 12/31/10 to 12/31/12 applies to us no matter if you are participating or not?
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#1419300 - 07/23/10 03:50 PM
Re: Non-interest bearing Transactions
ahkcompliance
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Yes. Although the FDIC hasn't said so yet, I'm guessing that it will officially end the TAG portion of the program at year end and will immediately have new insurance regs in Part 330 that will cover all non-interest transaction accounts in full beginning 12/31 and ending 12/31/12.
And I am also guessing that they won't fudge the definition of "non-interest" to include IOLTAs and "almost non-interest" NOW accounts.
But that is all guesswork on my part.
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#1419574 - 07/23/10 07:58 PM
Re: Non-interest bearing Transactions
MyBrainHurts
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Diamond Poster
Joined: Nov 2004
Posts: 2,310
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"Beginning 12/31/10 through 12/31/12, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account, at all FDIC-insured institutions"
I see this on the FDIC site, but when/how was it changed. I didn't see it in the reform bill (although I'm not saying I read every word). Was it in the bill, or just a fiat from FDIC? See pages 169 and 170 of HR 4173
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#1419587 - 07/23/10 08:36 PM
Re: Non-interest bearing Transactions
Reads Regs
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Section 343 of the Dodd-Frank Act.
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#1419685 - 07/25/10 11:35 PM
Re: Non-interest bearing Transactions
John Burnett
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Posts: 40,086
Cape Cod
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The FDIC coverage for net non-interest bearing transaction accounts kicks in on 12/31/10; the law also provides full NCUSIF coverage for non-interest bearing transaction accounts in insured credit unions immediately (credit unions don't have a TAG program like banks do).
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#1419688 - 07/26/10 09:56 AM
Re: Non-interest bearing Transactions
John Burnett
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10K Club
Joined: Jul 2001
Posts: 84,326
Galveston, TX
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Also, with the repeal of Regulation Q, that will leave some customers having to make a choice between insurance and interest. I wonder which one they will choose?
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#1419997 - 07/26/10 09:06 PM
Re: Non-interest bearing Transactions
rlcarey
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Very true. Given today's interest rates, insurance looks a lot more inviting to business, I think.
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#1420082 - 07/27/10 01:05 PM
Re: Non-interest bearing Transactions
John Burnett
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Georgia Plum
Unregistered
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OK, I missed it. When was Reg Q repealed?
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#1420124 - 07/27/10 02:07 PM
Re: Non-interest bearing Transactions
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Power Poster
Joined: Nov 2001
Posts: 7,988
FINALLY ABOVE the gnat line
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The financial reform reg states that we can pay interest on business checking accounts. I believe it goes into effect 7-21-2011.
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#1420226 - 07/27/10 03:34 PM
Re: Non-interest bearing Transactions
waldensouth
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Cape Cod
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Actually, ยง627 is titled "Interest-bearing transaction accounts authorized" and subsection 627(a) is titled "Repeal of Prohibition on Payment of Interest on Demand Deposits." While the primary group affected will be businesses, the change could affect anyone with a demand deposit account, basically lifting the last vestige of interest rate regulation hanging on since the 1930's. If lifts, effective 7/21/11, the prohibitions on paying demand deposit interest in the Federal Reserve Act, Home Owners' Loan Act and Federal Deposit Insurance Act.
It will mean the death of Regulation Q. As I have said elsewhere, I won't mourn its passing.
As noted earlier in this thread, while the two-year period of enhanced deposit insurance for non-interest bearing transaction accounts remains in effect (through 12/31/12), businesses will have a choice of getting whatever meager interest their banks might offer starting 7/21/11 OR having their checking accounts fully insured even if their deposits exceed $250,000. They can't have it both ways.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1422549 - 08/01/10 05:40 PM
Re: Non-interest bearing Transactions
John Burnett
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Posts: 8,272
Where the heart is
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It will mean the death of Regulation Q. As I have said elsewhere, I won't mourn its passing.
John - can you join you in a drink at the virtual wake for Reg. Q? This is going to make it a lot easier to deal with the Money Market account transaction violations. In fact, one has to wonder if this will spell the end of "Money Market" accounts.
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#1422679 - 08/02/10 03:33 PM
Re: Non-interest bearing Transactions
Princess Romeo
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10K Club
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Cape Cod
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Money Market and other savings accounts will stick around at least for a while as long as banks want to offer a product that can pay a bit more than a transaction account.
Alternatively, MMDAs could become just another tier on a tiered-rate transaction account, with the lowest tiers paying nothing or next to nothing.
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