ABA Banking Journal - December 2008 - (Page 38)
Compliance Clinic Getting FDIC insurance shifts right Here are answers to common questions ABA has been receiving from bankers about the revised FDIC coverages C hanges in FDIC coverage have had bankers working hard to give customers accurate information. Here are answers to common questions asked to help bankers do that job. Q. What do I tell customers who ask why this increase in FDIC insurance limits is only temporary? A. In the Emergency Economic Stabilization Act (EESA), Congress temporarily increased the FDIC deposit insurance coverage limit from $100,000 to $250,000 as part of its efforts to shore up consumer confidence in the banking industry. The limit will revert to $100,000 on Dec. 31, 2009, unless Congress acts to extend the increase beyond that date. Note that retirement accounts were already insured up to $250,000 and will remain at that level when the EESA provision expires. Q. What do we need to do to notify our customers of the changes in the FDIC insurance limits? A. FDIC issued FIL 102-2008 (www.fdic.gov/news/ news/financial/2008/fil08102.html), which allows you to post By Cristeena Naser, senior counsel, Center for Securities, Trust & Investments, cnaser@aba.com, and Leslie Callaway, CRCM, compliance project manager, ABA Center for Regulatory Compliance, lcallawa@aba.com. Callaway is one of two Journal contributing editors who write the monthly Compliance Mailbox column. 38 DECEMBER 2008/ABA BANKING JOURNAL the statement: “On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009.” You should post this notice on or near the current signs. You can create your own signs, or you can order new signs by visiting www.fdic.gov/ regulations/resources/signage/ Q. Do we need to tell our customers the change is temporary? A. Yes. Banks should be able to explain the increase in the deposit insurance limit and the duration of the change. It is particularly important that customers who open CDs with maturities after Dec. 31, 2009, understand the insurance limits so they can accurately assess their risk in the event of a bank failure. Although this information doesn’t need to be part of your account-opening disclosures or your written account agreement, it should be clearly and conspicuously posted in branches. Q. Do we need to notify existing customers that the insurance limits have changed? A. No, there is no requirement to notify existing customers of the temporary change, other than through branch signage. However, the general expectation is that banks may advertise or otherwise disclose the change so as long as the information is clearly and correctly stated. Subscribe at www.ababj.com
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