{"id":519063,"date":"2010-04-07T10:25:53","date_gmt":"2010-04-07T14:25:53","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/04\/07\/state-regulators-urge-fdic-to-extend-deposit-insurance-guarantee\/"},"modified":"2010-04-07T10:25:53","modified_gmt":"2010-04-07T14:25:53","slug":"state-regulators-urge-fdic-to-extend-deposit-insurance-guarantee","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/519063","title":{"rendered":"State Regulators Urge FDIC to Extend Deposit Insurance Guarantee"},"content":{"rendered":"

State regulators are urging the Federal Deposit Insurance Corp.<\/strong> to extend its unlimited deposit insurance program for low-interest business accounts. The Transaction Account Guarantee Program<\/strong> was created during the financial crisis as a way to stop a flight of depositors from community banks. The program is set to expire June 30, but the FDIC\u0092s board is meeting on Tuesday to discuss whether to extend it.<\/p>\n

The Conference of State Bank Supervisors<\/strong> said in an April 6 letter<\/a> the program should be extended until Dec. 31, 2012.<\/p>\n

\u0093While the worst of the crisis appears to be behind us, this program is still needed to provide assurance to consumers and small businesses and ensure a stable source of funds for community and regional banks,\u0094 said the letter. \u0093Any recovery in the economy is occurring slowly and is not being realized in all areas of the country. In addition, the steady pace of bank failures still has many communities on edge.\u0094<\/p>\n

If it\u0092s extended, the program could be one of just a few government officials decide to extend and not wind down. The TAGP allows banks to pay the FDIC for unlimited deposit insurance on certain business accounts as opposed to the customary $250,000 limit per account. This was intended to keep businesses from pulling their multi-million dollar accounts at community and regional banks and putting the money into institutions many believed were too big to fail.<\/p>\n

In March, FDIC Chairman Sheila Bair<\/strong> said the program was used by more than 6,900 of the roughly 8,000 U.S. banks. \u0093It has been highly effective in offering an extra margin of protection to small businesses and other holders of payment-processing accounts at small and mid-sized institutions,\u0094 she said in a Florida speech to community bankers.<\/p>\n

Ms. Bair has not said what the FDIC might do, but many observers have interpreted her recent comments to suggest she could support temporarily extending the program.<\/p>\n

\u0093There is still a threat that the credit challenges facing community banks could lead to renewed liquidity problems if uninsured deposits once again flow to the largest banking organizations,\u0094 she said in March. \u0093This in turn could trigger liquidity failures, imposing additional costs on the deposit insurance fund. As part of our analysis, we’ll consider whether an extension of the TAG program may be needed to maintain stability in the industry’s funding base given the ongoing credit challenges brought on by the financial crisis, as well as protect us against unnecessary losses.\u0094<\/p>\n

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State regulators are urging the Federal Deposit Insurance Corp. to extend its unlimited deposit insurance program for low-interest business accounts. The Transaction Account Guarantee Program was created during the financial crisis as a way to stop a flight of depositors from community banks. The program is set to expire June 30, but the FDIC\u0092s board […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-519063","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/519063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=519063"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/519063\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=519063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=519063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=519063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}