As a reminder, the FDIC has extended the Transaction Account Guarantee portion of the Temporary Liquidity Guarantee Program until June 30, 2010.  Institutions that have not previously opted-out of the program will automatically continue in the program (at increased costs) unless they pro-actively opt-out of the extension.

Starting January 1, 2009, the FDIC assessment for its full guarantee of funds held in non-interest bearing demand deposit accounts will rise to an annualized rate of 15 to 25 basis points, depending on the Risk Category rating of the institution.

The deadline to affirmatively opt out of the Transaction Account Guarantee program is November 2, 2009. We have previously posted information about how to opt out.

Institutions electing to remain in the program will face increased assessments and potentially imply that they “need” continued government assistance, but will continue to be able offer depositors the comfort of a full government guarantee.  Institutions electing to opt out will save the increased assessments and provide a visible example of emerging from a government program, but may risk losing uninsured deposits to other institutions that have elected to retain the full FDIC guarantee.

All institutions are also reminded that they will need to update their lobby and website disclosures to reflect the June 30, 2010 extension.