Transaction Account Guarantee Extension Third Quarter 2009

06-Nov-2009 Summary:

On August 26, 2009, the FDIC adopted the attached final rule extending the Transaction Account Guarantee (TAG) portion of the Temporary Liquidity Guarantee Program for six months, through June 30, 2010. For institutions that choose to remain in the program, the fee will be raised and adjusted to reflect the institution's risk.

Highlights:

• Any insured depository institution that is currently participating in the TAG program may continue in the program during the extension period that ends on June 30, 2010.
• The annual assessment rate that will apply to participating institutions during the extension period will be either 15 basis points, 20 basis points or 25 basis points, depending on the Risk Category assigned to the institution under the FDIC's risk-based premium system.
• Any institution currently participating in the TAG program that wishes to opt out of the TAG extension must submit its opt-out election to the FDIC on or before November 2, 2009. See page 2 for instructions on how to opt out.
• Any such election to opt out will be effective on January 1, 2010.
• Every institution currently participating in the TAG program should review its disclosures and modify them as necessary to ensure that they will be accurate after December 31, 2009.
• The maximum interest rate limit for NOW accounts remains unchanged.

Contacts:
Donna Saulnier, Manager, Assessment Policy
Section, Division of Finance, (703) 562-6167;

Christopher L. Hencke, Counsel, Legal Division,
(202) 898-8839; or Joe Fellerman, Senior Program
Analyst, Division of Insurance and Research, (202)
898-6591

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