Financial Institution Letter

Deposit Insurance Notice Requirement Regarding the Payment of Interest on Demand Deposit Accounts FIL-38-2011

May 25, 2011




Summary: Under a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), insured depository institutions (IDIs) may pay interest on demand deposit accounts (DDAs) starting July 21, 2011. Under another section of the Dodd-Frank Act, the FDIC provides unlimited deposit insurance for noninterest-bearing transaction accounts through December 31, 2012. The purpose of this Financial Institution Letter (FIL) is to remind IDIs that if on or after July 21, 2011, an IDI modifies the terms of a DDA so that the account may pay interest, the IDI must notify affected customers that the account no longer will be eligible for unlimited deposit insurance coverage as a noninterest-bearing transaction account.

Statement of Applicability to Institutions under $ 1 Billion in Total Assets: This FIL applies to all FDIC-insured institutions, including community banks.


Distribution:

FDIC-Insured Institutions

Complete Financial Institution Letter: http://www.fdic.gov/news/news/financial/2011/fil11038.html

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