Expiration of the Temporary Account Guarantee (TAG) Program

During the worst of the financial crisis, the FDIC instituted a program to temporarily provide unlimited insurance for certain large, noninterest-bearing transaction accounts and Interest on Lawyers Trust Accounts (IOLTAs). The Dodd-Frank Act authorized continuation of the program, called the Transaction Account Guarantee program (TAG) at no cost for participants until Dec. 31, 2012. Congress failed to pass industry-supported legislation to extend the program. The FDIC recently provided guidance about notifying customers about the program's expiration. Here's a link to that guidance. Also, in communicating with customers, there are also several points to consider sharing with them that may help you.

There are ways a bank can structure accounts that may increase your ability to keep more of your deposits at the same bank and still have FDIC insurance protection. Talk to your banker.
Banks holding government and other "public deposits" are required to pledge securities as collateral at 110 percent of those deposits to ensure their protection. Some do this through the GBA administered Georgia State Pledging Pool, while others do so through their own bank procedures.
Not a penny of FDIC insured deposits has ever been lost.

GBA is also asking our members share with us alternatives you're considering. We already know some bankers are looking again at Federal Home Loan Bank Letters of Credit and Promontory's CDARs program. If you're considering something else, please let us know. With questions or ideas, contact Joe Brannen, 404.420.2026, or Elizabeth Chandler, 404.420.2027.

With questions or to share your opinion, send an e-mail to the Webmaster.

GBA's professional staff represents the membership at the state and federal levels. Contact any of them with questions about issues:

Joe Brannen
President & CEO

Elizabeth Chandler
SVP, Government Relations

David Oliver
SVP, Communications & Marketing