In an earlier Financial Institutions Alert, we reported on the Transaction Account Guarantee Program (the "TAG Program") adopted by the Federal Deposit Insurance Corporation (FDIC). The TAG Program provides full deposit insurance coverage for noninterest-bearing deposit transaction accounts, regardless of dollar amount, to financial institutions that did not opt out of the program prior to Dec. 5, 2008. Financial institutions that did not opt out have been paying quarterly an annualized 10 basis point assessment for deposits not otherwise covered by the existing deposit insurance limit of $250,000.

The FDIC has extended the expiration date of the TAG Program from Dec. 31, 2009 until June 30, 2010. Participating financial Institutions will remain in the extended TAG Program unless they opt out by Nov. 2, 2009. Financial institutions that do not opt out will pay a quarterly assessment at an increased annualized rate ranging from 15 to 25 basis points, depending upon the financial institution's Risk Category rating. All financial institutions that offer noninterest-bearing transaction accounts will need to update their lobby and website disclosures to reflect the June 30, 2010 expiration date.

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