What is the "Transaction Account Guarantee Program"?
The Transaction Account Guarantee Program (TAGP) is part of the FDIC's Temporary Liquidity Guarantee Program (TLGP). The program was created October 14, 2008. The FDIC approved a final rule for the program on November 21, 2008. The program was created to strengthen confidence and encourage liquidity in the banking system. The TAGP is the portion of the program that establishes rules for the temporary and unlimited guarantee, by the FDIC, of certain types of non-interest bearing transaction accounts. The temporary guarantee is in place through December 31, 2010 at participating FDIC-insured institutions.
Texas Community Bank has opted to participate in this program. What does that mean?
All FDIC member banks were automatically enrolled in the program on October 14, 2008 and were given until December 5, 2008 to decide whether to remain in the program or opt-out. Texas Community Bank made a decision to participate in the TAGP.
Is Texas Community Bank in trouble, or is the bank seeking assistance from the government through this program?
The TAGP is not an assistance or "bail-out" program, nor does bank participation imply that the bank is in trouble.
What types of accounts are affected by the TAGP and how much is covered?
- Non-interest bearing checking accounts, personal and business;
- Interest On Lawyer's Trust Accounts (IOLTAs), regardless of the interest rate;
- Interest bearing checking accounts with an interest rate at or below 0.50%. (NOTE: Effective July 1, 2010, the maximum interest rate guaranteed under the TAG Program will be reduced to 0.25%.)
How long will the TAGP coverage last?
The final FDIC rule (November 21, 2008) states that the TAGP will be in effect until December 31, 2010.
For additional information, call the FDIC's Customer Assistance Center at 1-877-ASK-FDIC (1-877-275-3342)
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