FDIC CONTINUES CHANGES TO DEPOSIT INSURANCE
The FDIC announced on Monday the Temporary Liquidity Guarantee Program (“TLGP”), which guarantees newly issued senior unsecured debt of certain eligible entities and provides full coverage of non-interest bearing deposit transaction accounts held by FDIC insured depository institutions, regardless of dollar amount. The coverage for eligible debt will not extend beyond June 30, 2012 and for deposit accounts will not extend beyond December 31, 2009. The program will provide automatic coverage for 30 days, after which time the eligible entity must notify the FDIC of whether it will opt-out of the program. There will be no fee for coverage for the first 30 days. After that, the entity will pay a 75 basis point fee for eligible debt guaranteed and a 10 basis point surcharge for deposit account balances covered. The FDIC has a web site dedicated to the TLGP: www.fdic.gov/tlgp and will be holding a series of calls beginning today.
These changes come on the heels of a number of other changes recently announced by the FDIC, including:
- Eliminating the concept of “qualifying” beneficiaries for purposes of determining the insurance coverage available on revocable trust accounts through interim rules effective September 26, 2008.
- Legislation authorizing a temporary increase in federal deposit insurance coverage limits from $100,000 to $250,000 effective October 3, 2008 through December 31, 2009.
- Simplifying deposit insurance rules for accounts held at FDIC-insured institutions by mortgage servicers through an interim final rule effective October 10, 2008.
- A notice of proposed rulemaking that would increase the assessment rate banks pay for deposit insurance beginning on January 1, 2009.
Please let us know if you need more information on these changes.
- Judy Scheiderer and Margaret Stolar
DEALING WITH MULTISTATE COMPLIANCE ISSUES? We routinely advise on multistate matters, including strategic planning, licensing, forms preparation, servicing, e-commerce, litigation and ongoing compliance management issues. We maintain a list of local counsel when local contacts are desired and act as coordinating national counsel when formal opinions are required. We frequently survey the laws of the 50 states, the District of Columbia, Puerto Rico and U.S. territories and maintain ongoing databases in a number of areas on common questions. In addition, we publish for clients three formal compendiums of state and federal laws — a CREDIT CARD DIGEST a MARKETING AND PRIVACY DIGEST and a DEBT COLLECTION DIGEST. The Digests are updated periodically throughout the year and completely updated annually. Contact us for details.