On April 13, the Federal Deposit Insurance Corporation (FDIC) published an interim final rule extending the Transaction Account Guarantee (TAG) program through December 31, 2010, with the possibility of extending the program for an additional 12 months without further rulemaking if the FDIC determines that continuing economic difficulties warrant such an extension. The TAG program is a part of the Temporary Liquidity Guarantee Program adopted by the FDIC in October 2008 and provides full FDIC protection for the entire amount in all noninterest bearing transaction accounts. Without such protection, these accounts would only be insured up to $250,000 under the FDIC’s general deposit insurance rules.

Insured depository institutions currently participating in the program that do not wish to participate in the extension must notify the FDIC of their intention to opt out on or before April 30. Such election will be effective on July 1. If an insured depository institution currently participating in the TAG program participates in the extension, it will be obligated to participate in the additional 12-month extension if the TAG program is further extended.

In addition, the rule states that the total dollar amount of TAG-qualifying accounts and the total number of accounts must be reported as an average daily balance beginning with the September 30 report date for the Report of Condition or Thrift Financial Report (covering the period from July 1 through September 30).

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