Wednesday, December 19, 2012

A Tale of Two Regulators

If you want to observe a difference between FDIC and NCUA, you only need to look at how the two agencies handled the pending expiration of Transaction Account Guarantee program, which is set to expire on December 31, 2012.

FDIC notified banks on November 5 about the pending expiration of the program. Banks were to give adequate advance warning to noninterest bearing transaction account depositors about the pending change in insurance coverage. FDIC also provided model language which could be shared with these depositors.(read the letter)

On the other hand, NCUA waited until the third week of December to send a letter to federally-insured credit unions about the expiration of the Transaction Account Guarantee program. NCUA wrote that credit unions should communicate to thier membership about the potential changes in insurance coverage occurring on January 1, 2013. This hardly strikes me as providing credit union members with adequate advance warning, especially if credit unions start having this conversation with their members between now and the December 31 (hopefully credit unions had already communicated this change in insurance coverage before receiving NCUA's letter). (read the letter)




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