FDIC Action of Interest: Final Rule

On September 1st, the FDIC published its final rule, amending the Temporary Liquidity Guarantee Program (TLGP) and extending the Transaction Account Guarantee Program (TAG) for six months, until June 30, 2010. Under the final Rule, funds in IOLTA accounts will continue to be fully guaranteed by the FDIC, without limit, for participating financial institutions. Institutions will have the option to opt-out of the extended TAG coverage, and as in the initial Rule, are required to prominently display their status as either participating or not participating.

Institutions have until November 2 to opt out of the extended TAG program, which would begin on January 1, 2010. IOLTA funds held in institutions that opt out of the extended TAG program (or that opted out of the initial TAG) will be insured up to $250,000 per owner (i.e. client) until December 31, 2013.

The FDIC maintains a list of institutions that opted out of the current TAG coverage and we would expect institutions that opt out of the extended coverage would similarly be posted, subsequent to the November 2 deadline.