Oklahoma Bankers Association
OBA News and Information
Linked In Email News

FDIC extends TAG program through 2010

The Federal Deposit Insurance Corporation has approved an interim rule to extend the Transaction Account Guarantee (TAG) program, which offers unlimited deposit insurance on non-interest bearing accounts, to the end of the year.  The interim rule also allows the Board to decide by October 29 whether to extend the program for an additional year.

Click here to read the FDIC Release:

 

http://www.fdic.gov/news/board/April04.pdf

 

The Alliance of State Bankers Associations has worked closely with the ABA and every other organization that was willing to work with us to support the extension.  We argued that it was needed to maintain depositor confidence and, for many banks, it was needed to maintain liquidity in the wake of "too-big-to-fail" that's been a national policy for many years.  In one of the staff memos to the FDIC Board it was noted that “allowing the TAG program to expire in the current environment could cause a number of community banks to experience deposit withdrawals from their large transaction accounts and risk needless liquidity failures.”

Amen. 

ABA's Chief Economist, Jim Chessen, has consistently maintained that "the exit strategy for this program should be one that relies on flexible planning to minimize market disruption once the markets have returned to normal.  Since markets have not yet normalized, flexible planning is even more important and argues for extension of the TAG program."

Back to top