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Financial Institution Letter
Final Rule: Temporary Unlimited Coverage for Noninterest - Bearing Transaction Accounts
Summary: The FDIC Board of Directors (Board) has issued a final rule to implement the section of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that provides temporary unlimited coverage for noninterest-bearing transaction accounts at all FDIC-insured depository institutions (IDIs). The separate coverage for noninterest-bearing transaction accounts becomes effective on December 31, 2010, and terminates on December 31, 2012.

Highlights:
  • Section 343 of the Dodd-Frank Act amends the Federal Deposit Insurance Act to include noninterest-bearing transaction accounts as a new temporary deposit insurance account category. All funds held in noninterest-bearing transaction accounts will be fully insured, without limit, from December 31, 2010, through December 31, 2012.
  • This unlimited coverage is separate from, and in addition to, the coverage provided to depositors with other accounts held at an IDI.
  • The Dodd-Frank Act provision is similar to the FDIC's Transaction Account Guarantee Program (TAGP), which expires on December 31, 2010, but defines noninterest-bearing transaction accounts as only traditional noninterest-bearing transaction accounts. Unlike the TAGP, the Dodd-Frank Act definition of noninterest-bearing transaction accounts does not include either low-interest Negotiable Order of Withdrawal (NOW) accounts or Interest on Lawyer Trust Accounts (IOLTAs).
  • The final rule includes notice and disclosure requirements that IDIs must implement by December 31, 2010.

Continuation of FIL-76-2010

Distribution:
FDIC-Insured Institutions

Suggested Routing:
Chief Executive Officer
Head of Deposit and Branch Operations
Chief Compliance Officer
Training Officer

Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/financial-institution-letters/2010/index.html

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html .

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).


Additional Related Topics:

  • Deposit Insurance Regulations (12 C.F.R 330)
  • Notice Requirements for Noninterest-bearing Transaction Accounts
FIL-76-2010
Attachments
Last Updated: November 9, 2010