Tuesday, July 23, 2019

Expiration of Unlimited Deposit Insurance for NIBTAs

Posted by Sharon December 10, 2012 4:01pm

Photo Credit: vichie81

By: Sharon Geiger, Quality Control Review Specialist

I realize this article is coming out a little late, however, for those banks that are not yet prepared, you still have time to show the regulators that you have prepared for the December 31, 2012 expiration.

While there is still a small chance that the regulatory agencies will choose to extend the Insurance program as it pertains to Non-Interest Bearing Transaction Accounts (NIBTA), we are getting closer to the December 31, 2012 expiration date with no word on any extension.

Therefore, what are Banks going to have to do to be in compliance? Well, here’s a list of how to be prepared should the rule expire.

  1. Provide all “Non-Interest Bearing Account” holders advance notice in writing that the Temporary unlimited insurance coverage for these deposits is scheduled to expire on December 31, 2012, and therefore, starting January 1, 2013, the FDIC will only insure these accounts up to $250,000 per depositor.  If you haven’t already sent out these notices with your November statements, I would suggest that you get them out in your December statements.  You could also send a separate notice all together as it’s not required necessarily to actually be in the statements.  However, from a cost perspective, it’s just easier to include in the statements. Note:  The FDIC has come up with model language that you could use for your statement notices at this link.
  2. Remove from your branches the “Notice of Changes in Temporary FDIC Insurance Coverage”.  And ensure that any other lobby postings you have containing this language are changed.  You could also use the model language as a lobby posting.  Also, check your teller windows and it might be a good idea to put up the notice at the teller windows as well.
  3. Update your website disclosures. The FDIC link above provides examples of a long form notice and a short form notice.  Some Banks are talking about putting the short form notice in the statements and using the long form notice in the lobby and on their website. 



Sharon Geiger
Senate Voted No Extension Reply #1 on : Fri December 14, 2012, 15:00:58
The proposed bill to extend for two years the mandate for unlimited deposit insurance on non-interest bearing deposit accounts was defeated in a Senate vote today. This means, that after December 31, 2012 unlimited insurance is no longer being given for non-interest bearing accounts. As posted in my earlier blog, the requirements should be met by all Banks accordingly regarding notice to be given to Non-interest bearing account holders.
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Sharon Geiger

Senior Quality Control and Review Specialist

Sharon Geiger has 27 years banking experience, 21 of which have been involved in internal audit. She has extensive knowledge of all aspects of the banking industry, with a particular emphasis on regulatory compliance and identifying risks and controls. As QCR Specialist, she performs Quality Control Reviews to ensure all workpapers and reports are completed in compliance with the firm's standards.

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