The Gold Book

On April 13, 2010, the FDIC adopted an interim final rule extending the Transaction Account Guarantee (TAG) program through December 31, 2010 for institutions participating in the program. Institutions that wish to opt out of the TAG extension must submit a request to opt out on or before April 30, 201o.

The FDIC Board of Directors has the authority to grant an additional 12-month extension of the program, through December 31, 2011, without further rulemaking, if it determines that continuing economic difficulties warrant such extension.

The maximum interest rate limit for NOW accounts guaranteed under the TAG program will be 0.25 percent, effective July 1, 2010.

Financial institutions currently participating in the TAG program should review its disclosures and modify them as necessary to ensure that they will be accurate after June 30, 2010.

This topic is further addressed in the Standard Maximum Deposit Insurance section of The Gold Book.

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The final rule will enable consumers to limit the costs of overdraft services by providing consumers a choice regarding their institution’s payment of overdrafts for ATM and one time debit card transactions. Consumers will also be provided a clear disclosure of the fees and terms associated with the institution’s overdraft service.

Opt-In. The final rule requires consumers to opt in, or affirmatively consent, to the institutions’ overdraft service for ATM and one time debit card transactions, before overdraft fees may be assessed on the account. The rule also provides consumers an ongoing right to revoke consent.

Consumers Covered. The opt-in right applies to all consumers, including existing account holders.

Conditioning the Opt-In. The final rule prohibits financial institutions from tying the overdraft payment of overdrafts for check and other transactions to the consumer opting into the overdraft service for ATM and one time debit card transactions.

Same Account Terms, Conditions and Features. The final rule requires institutions to provide consumers who do not opt in with the same account terms, conditions and features, including price, as provided to consumers who do opt in.

Mandatory Compliance Date. The mandatory compliance date is July 1, 2010.

The Gold Book has been updated for these new rules. See Bounce Protection and Reg E notice requirements for additional details and requirements.

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The Federal Reserve Board has approved amendments to Appendix A of Regulation CC that reflect the restructuring of the Federal Reserve Banks’ check-processing operations.

Appendix A provides a routing symbol guide that helps depository institutions determine the maximum permissible hold periods for most deposited checks.

On February 27, 2010, the Reserve Banks will transfer the check-processing operations of the head office of the Federal Reserve Bank of Atlanta to the head office of the Federal Reserve Bank of Cleveland. To ensure that the information in Appendix A accurately describes the structure of check-processing operations within the Federal Reserve System, the final rule deletes the reference in Appendix A to the Atlanta head office and reassigns the routing numbers listed thereunder to the Cleveland head office.

To coincide with the effective date of the underlying check processing changes, the amendments are effective February 27, 2010. At that time, there will only be a single check-processing region for purposes of Regulation CC and there will no longer be any checks that are nonlocal.

Funds availability is discussed in-depth in The Gold Book.

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The Federal Reserve Board recently announced the annual indexing of the reserve requirement exemption amount and of the low reserve tranche for 2010. These amounts are used in the calculation of reserve requirements of depository institutions. The Board also announced the annual indexing of the nonexempt deposit cutoff level and the reduced reporting limit that will be used to determine deposit reporting panels effective 2010.

See sub-chapter Reserve Requirements for updated information.

The New York State legislature made sweeping changes to the Power of Attorney law, which went into effect September 1, 2009. The changes to the law require documents which are much more complex than the short form power of attorney under the old law. One major change, for example, is the use of a Statutory Major Gifts Rider for granting gifts of $500 or more. The new short form also affords principals increased protection by allowing the designation of co-agents as well as a person to monitor the agent. These changes and additional information on the new law can be found at New York Rules.

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