Deposit Insurance Notice Requirement Regarding the Payment of Interest on Demand Deposit Accounts

Thursday, July 21, 2011 at 12:43PM
Banking Spectrum in Uncategorized

Under a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), insured depository institutions 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.  If on or after July 21, 2011, an insured depository institution modifies the terms of a DDA so that the account may pay interest, the institution must notify affected customers that the account no longer will be eligible for unlimited deposit insurance coverage as a noninterest-bearing transaction account.

Article originally appeared on Banking Spectrum (https://www.bankingspectrum.com/).