The FDIC has approved a final rule which implements section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, providing temporary unlimited coverage for noninterest-bearing transaction accounts.
Effective December 31, 2010, the final rule revises the FDIC’s deposit insurance regulations to include noninterest-bearing transaction accounts as fully insured without limit. Noninterest-bearing accounts, as defined in the Dodd-Frank Act, include only traditional, noninterest-bearing demand deposit (or checking) accounts that allow for an unlimited number of transfers and withdrawals at any time, whether held by a business, individual or other type of depositor. This is to be distinguished from low-interest NOW accounts which, under the FDIC’s Transaction Account Guarantee Program (TAGP), are currently subject to unlimited insurance coverage through December 31, 2010. The final rule makes it plain that NOW accounts are not covered under the Dodd-Frank Act definition of noninterest-bearing transaction accounts and thus will not qualify for unlimited coverage. Unlimited FDIC insurance for noninterest-bearing transaction accounts, pursuant to the final rule, will expire December 31, 2012.