What's New: FDIC Changes and Notice Requirements

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) yesterday approved a final rule to implement section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

The final rule revises the FDIC's deposit insurance regulations to include non-interest bearing transaction accounts as a new temporary deposit insurance account category. All funds held in such accounts are fully insured, without limit, and this coverage is separate from, and in addition to, the coverage provided to depositors for other accounts at an insured depository institution. This separate coverage will become effective on December 31, 2010, and will end on December 31, 2012.

Non-interest bearing accounts include only traditional, non-interest bearing demand deposit (or checking) accounts that allow for an unlimited number of transfers and withdrawals at any time, whether held by a business, individual or other type of depositor.

Insured institutions are required to notify customers of these changes by December 31. 2010.

For details, see Coverage of Non-Interest Bearing Transaction Accounts in the Federal Deposit Insurance section of The Gold Book.

What's New: 2011 Annual Adjustments for Reserve Calculations and Reporting

The Federal Reserve Board recently announced the annual indexing of the reserve requirement exemption amount and of the low reserve tranche for 2011. 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 2011.

See sub-chapter Reserve Requirements for updated information.

What's New: 2011 Cost-of-Living Adjustments

The 2011 Cost-of-Living Adjustments (COLAs) for determining annual limits for most retirement plans remain the same as in 2010, except for the following:

• The adjusted gross income (AGI) limits for determining the deductible amount of traditional IRA contributions for single and married taxpayers who are active participants in an employer-sponsored retirement plan (see "Deductions" );


• The AGI limits for determining the deductible amount of traditional IRA contributions for married taxpayers filing jointly who aren’t active participants in an employer-sponsored retirement plan but whose spouses are (see "Deductions") ;


• The AGI limits for determining the maximum Roth IRA contributions permitted for taxpayers whose filing status is married filing jointly (see "Phaseouts) and;


• The adjusted gross income limits for taxpayers who qualify for the 50% nonrefundable tax credit on qualified retirement savings contributions (see "Credit for Pension Contributions").

Click here for a table summarizing the applicable limitations.

The Department of Justice Has Adopted Revised ADA Standards

Revised ADA regulations were issued on September 15, 2010 and take effect March 15, 2011. Compliance with the 2010 Standards for Accessible Design is permitted as of September 15, 2010, but not required until March 15, 2012. The Department of Justice has prepared fact sheets identifying the major changes in the rules (available at http://www.ada.gov/). Financial institutions seeking to replace/purchase ATM equipment should review the new guidelines and check with ATM vendors for hardware and software requirements.

See American Disabilities Act for more information.

New Power of Attorney Law Amendments

The NYS Power of Attorney laws that became effective September 1, 2009 were amended with a new law effective September 12, 2010.   The revisions to the power of attorney law are technical amendments and clarifications to certain sections of the law and the POA form to promote a better understanding of how the power of attorney (POA) rules work. Statutory short forms executed on or after September 12 must reflect the changes. Changes were also made to the Statutory Gifts Rider.

See Power of Attorney - New York Rules for additional information.

What's New: Significant Changes to (new) NYS Power of Attorney Rules

New York State Power of Attorney rules were significantly revised in 2009. A new bill is expected to be signed by Governor Paterson that will clarify, correct or revise many of the new provisions.

Please refer to the Power of Attorney section of the New Accounts chapter for details.

Official FDIC Sign Updated and Available

The Dodd-Frank Wall Street Reform and Consumer Protection Act signed by President Barack Obama on July 21, 2010, made permanent the current standard maximum deposit insurance amount (SMDIA) of $250,000. The FDIC coverage limit applies per depositor, per insured depository institution, for each account ownership category.

• The FDIC has updated the FDIC official sign for advertising deposit insurance coverage as prescribed in Part 328 of the FDIC's regulations.


• Insured depository institutions may order FDIC official signs from the FDIC, free of charge, at https://vcart.velocitypayment.com/fdic/.


• The FDIC encourages all insured depository institutions to acquire and post the new official sign without delay to increase depositor awareness of the permanent increase in deposit insurance coverage.


• All of the FDIC's deposit insurance coverage materials posted on its website - including "EDIE," its Electronic Deposit Insurance Estimator - have been updated to reflect the permanent $250,000 coverage.

The Compliance Chapter of The Gold Book addresses FDIC Official Sign requirements.

Basic FDIC Insurance Coverage Permanently Increased to $250,000 Per Depositor

On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part, permanently raises the current standard maximum deposit insurance amount to $250,000. The standard maximum insurance amount of $100,000 had been temporarily raised to $250,000 until December 31, 2013. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.

The temporary increase from $100,000 to $250,000 was effective from October 3, 2008, through December 31, 2010. On May 20, 2009, the temporary increase was extended through December 31, 2013.

"With this permanent increase of deposit insurance coverage to $250,000, depositors with CDs above $100,000 but below $250,000 will no longer have to worry about losing coverage on those CDs maturing beyond 2013.

To help consumers, bankers and others understand how the new law affects deposit insurance coverage and to help consumers verify whether their deposit accounts are fully protected, the FDIC provides the following resources:

• Information on deposit insurance on the FDIC Web site: Updated brochures on deposit insurance coverage (including the basic guide, Deposit Insurance Summary, and the more comprehensive guide, Your Insured Deposits) and a new version of the "Electronic Deposit Insurance Estimator" (EDIE), an interactive service that allows consumers to quickly and easily check whether their accounts are fully protected, are now available on the FDIC's Web site (www.fdic.gov).


• A toll-free consumer assistance line: Help and information about deposit insurance and other matters of interest to bank customers are available at 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday from 8:00 a.m. to 8:00 p.m., Eastern Time. For the hearing-impaired, the number is 1-800-925-4618.

Visit the FDIC chapter of The Gold Book for details.

More on the new $100 BankNote

Be sure to sign up for The $100 BankNote, an electronic newsletter provided by the U.S. government to help businesses and organizations around the world prepare for the redesigned $100 note's introduction on February 10, 2011.

Visit www.newmoney.gov

FDIC Board Adopts Final Rule Extending Tag Program

The FDIC  has adopted a final rule extending the Transaction Account Guarantee (TAG) program for six months, from July 1, 2010 through December 31, 2010. Under the TAG program, customers of participating insured depository institutions are provided full coverage on qualifying transaction accounts.

FDIC Chairman Sheila Bair said: "While I believe that the TAG program has proven to be critical to ensuring our financial system's stability, it was established as a temporary program. Ultimately, it should be up to Congress to determine our insurance limits. Adoption of this final rule allows the opportunity for Congress to conclude its current deliberations relative to this program."

The final rule, adopted after a public comment period, is almost identical to the interim rule adopted on April 13, 2010. The rule requires that interest rates on qualifying NOW accounts offered by banks participating in the program be reduced to 0.25 percent from 0.5 percent. It requires TAG assessment reporting based on average daily account balances but makes no changes to the assessment rates for participating institutions. The rule also provides for an additional extension of the program, without further rulemaking, for a period of time not to exceed December 31, 2011.

See the FDIC chapter of The Gold Book for further details on the TAG program and FDIC coverage in general.

What's New: New Rules for Gift Cards

New Federal Reserve rules provide important protections for the purchase and use of gift cards. The final rules under Regulation Z that implement the Credit CARD Act of 2009, restrict the fees and expiration dates applicable to gift cards and apply to gift cards sold on or after August 22, 2010.

Content on this topic has been added to The Gold Book.

What's New: IOLA Fund Amends Interest Rate Options

Last month the IOLA Fund amended 21 NYCRR Section 7000.9(b)(1) to revise one of the IOLA interest rate options.  Institutions may pay the greater of 60% of the Federal Funds Rate or 1% on IOLA's.  This is a change to one of the interest rate options an institution may choose for paying interest on IOLA's, which are NOW accounts.  The 1% is a floor rate.

This rate change is effective April 7, 2010.  Go to www.IOLA.org, go to recent news on the right and go to the bottom and click on trustees regulations.  There you will be able to pull up the 13 page regulation and find section 7000.9(a) and (b).  The rates you may offer on IOLAs can be either under (a) or (b), your choice.

See the IOLA section of The Gold Book for updated material.

OTS Assesses Penalty and Restitution for Unfair Overdraft Protection Program

The Federal Reserve's final amendments to Regulation E enable consumers to limit the costs of overdraft services assessed on their deposit accounts. The amendments require financial institutions to provide a clear disclosure of the fees and terms associated with its overdraft services and to provide customers with a choice regarding the payment of overdrafts for ATM and one-time debit card transactions. The institution must provide a notice that allows a customer to opt in, or affirmatively consent, to the institution's payment of overdrafts for these types of transactions.

These amendments took effect on January 19, 2010, and carry a mandatory compliance date of July 1, 2010.

Last month, the OTS illustrated the affect of noncompliance by taking action against Woodforest Bank, a thrift institution based in Refugio, Texas. To avoid a lengthy dispute, Woodforest Bank agreed to repay more than $12 million to current and former customers "who were misled about the cost of overdraft protection and charged excessive overdraft-protection fees." According to the OTS, Woodforest's business relied "upon an unreasonably high level of aggregate fees."  Woodforest will also pay the federal Office of Thrift Supervision $400,000, the toughest penalty ever imposed by the regulator regarding overdraft fees.

"We believe that our overdraft protection programs now set a new industry standard for customer friendliness and consumer focus," James Dreibelbis, Woodforest's chief executive officer, said in a statement. OTS spokesman William Ruberry said Woodforest was incorrectly marketing overdraft protection as free, when it was really charging $34 per overdraft, plus additional daily fees if a customer failed to pay off the original penalties. Woodforest was also offering loans to repay overdraft fees, and the bank was requiring automatic account deductions to repay the loan. Such a requirement is against federal rules. Under the order, Woodforest has to limit fees and the number of transactions for which it can charge fees, overhaul marketing materials and clearly disclose rules, stop claiming that overdraft protection is good for people who have had financial trouble and give customers a chance to stop additional daily charges on overdrawn accounts.

Revised BSA/Anti-Money Laundering Examination Manual Available

The Federal Financial Institutions Examination Council (FFIEC) today released the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The revised manual reflects the ongoing commitment of the federal and state banking agencies to provide current and consistent guidance on risk-based policies, procedures, and processes for banking organizations to comply with the Bank Secrecy Act and safeguard operations from money laundering and terrorist financing. The 2010 version further clarifies supervisory expectations since the August 24, 2007, update. The revisions again draw upon comment from the banking industry and examination staff.

The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and State Liaison Committee revised the manual in collaboration with the Financial Crimes Enforcement Network, the administrator of the Bank Secrecy Act, and the Office of Foreign Assets Control.

Revisions were made throughout the manual. The sections of the manual with more significant updates are again noted in the table of contents.

The manual is located on the FFIEC BSA/AML InfoBase at: http://www.ffiec.gov/bsa_aml_infobase/default.htm. Banks and credit unions should direct questions about the manual to their primary federal regulator.

Consider Benefits of BSA E-Filing

The Financial Crimes Enforcement Network (FinCEN) continues to encourage financial institutions to electronically file Bank Secrecy Act (BSA) reports, and has issued a new brochure that highlights the benefits of using the Bank Secrecy Act Electronic Filing System (BSA E-Filing). E-Filing BSA information increases the timeliness of data availability, reduces the cost of paper processing, and improves data quality.

"FinCEN is committed to working with financial institutions to increase their understanding of the value that E-Filing provides across a variety of forms," said FinCEN Director James H. Freis, Jr. "We are continually enhancing the system to ensure that the filing process is efficient and user-friendly, and accomplishes our joint efforts to get important information relating to money laundering and terrorist financing to law enforcement in the quickest manner possible."

BSA E-Filing is a free, Web-based system that is user-ID and password protected. Financial institutions subject to BSA reporting requirements use the system to electronically file a variety of BSA forms, either individually or in batches, through a FinCEN secure network. Currently, more than three out of four BSA filings are electronically submitted. When an institution submits a form through the E-Filing system, it is available to and searchable by law enforcement in two days, rather than up to 11 days if filed on paper.

For more information about the system or how to enroll, please call the BSA E-Filing Help Desk at 1-888-827-2778 and select option number 6.

Financial Literacy and Education Commission Launches New My Money Web Site

Enhanced Features Include New Calculators, Checklists to Help Families with Savings, Preparation for College,  Numerous Other Life Events with Financial Implications

The Financial Literacy and Education Commission (FLEC) announced the launch of its redesigned financial literacy education website, www.MyMoney.gov. The new site has enhanced interactive features and utility to provide more resources to Americans seeking information that can inform their personal financial decisions.  President Obama recently proclaimed April to be National Financial Literacy Month, and this enhanced online offering is just one of the many steps the Administration is taking to expand financial education and access for the future.

"As America recovers from the most severe financial crisis since the Great Depression, it's critical that we strengthen every aspect of our financial system. That means not only strong reforms and consumer protections, but also improved financial literacy and access," said Treasury Deputy Secretary Neal Wolin. "Financial education and access is a priority for this Administration, and we're pleased to provide this critical resource to help Americans find free, reliable and unbiased information that can help inform their daily financial decisions and plan for the future."

The new MyMoney.gov creates an online point of access to financial information from the 21 Federal agencies, departments and bureaus that comprise the FLEC.   Users will be able to find information about how to plan for a host of life events that have financial implications, such as birth or adoption of a child, home ownership, or retirement. They can also find information targeted to their personal or professional situation. For instance, the site includes resources for teachers, service members, women, parents, youth, employers, and more.  The site also provides money management tools including a financial savings calculator, worksheets for establishing a household budget and a college preparation checklist, among others.  The site is also available in Spanish. The effort to make the website as helpful and useful to Americans will be ongoing, with improvements expected to continue.

The web site was made possible by the Financial Literacy and Education Commission, which was established under the Fair and Accurate Credit Transactions Act of 2003. The Commission was tasked to develop a national financial education web site along with a hotline (1-888-My Money) and a national strategy on financial education. It is chaired by the Secretary of the Treasury and made up of the heads of 20 additional federal agencies: the Office of the Comptroller of the Currency; the Office of Thrift Supervision; the Federal Reserve; the Federal Deposit Insurance Corporation; the National Credit Union Administration; the Securities and Exchange Commission; the Departments of Education, Agriculture, Defense, Health and Human Services, Housing and Urban Development, Labor, and Veterans Affairs; the Federal Trade Commission; the General Services Administration; the Small Business Administration; the Social Security Administration; the Commodity Futures Trading Commission; the Office of Personnel Management and its newest member, the White House Office of Public Engagement.  The Commission is coordinated by the Department of the Treasury's Office of Financial Education.

For details, go to www.MyMoney.gov

Board to Hold Four Public Hearings on Home Mortgage Disclosure Act

The Federal Reserve Board has announced that it will hold four public hearings, beginning in July, on potential revisions to Regulation C, which implements the Home Mortgage Disclosure Act. The act requires mortgage lenders to provide detailed annual reports of their mortgage lending activity to regulators and the public. Consumers, community and consumer organizations, mortgage lenders and other interested parties will be invited to participate in the hearings.

The hearings will serve three objectives. First, the Board will gather information to evaluate whether the 2002 revisions to Regulation C, which required lenders to report mortgage pricing data, helped provide useful and accurate information about the mortgage market. Second, the hearings will provide information that will help the Board assess the need for additional data and other improvements. Finally, the hearings will help identify emerging issues in the mortgage market that may warrant additional research.

All hearings will include panel discussions by invited speakers.

The New $100 Note: Know Its Features So You Can Know It's Real

Officials from the U.S. Department of the Treasury, the Board of Governors of the Federal Reserve System and the United States Secret Service today unveiled the new design for the $100 note. Complete with advanced technology to combat counterfeiting, the new design for the $100 note retains the traditional look of U.S. currency.

"As with previous U.S. currency redesigns, this note incorporates the best technology available to ensure we're staying ahead of counterfeiters," said Secretary of the Treasury Tim Geithner.

"When the new design $100 note is issued on February 10, 2011, the approximately 6.5 billion older design $100s already in circulation will remain legal tender," said Chairman of the Federal Reserve Board Ben S. Bernanke. "U.S. currency users should know they will not have to trade in their older design $100 notes when the new ones begin circulating."

There are a number of security features in the redesigned $100 note, including two new features, the 3-D Security Ribbon and the Bell in the Inkwell. These security features are easy for consumers and merchants to use to authenticate their currency.

The blue 3-D Security Ribbon on the front of the new $100 note contains images of bells and 100s that move and change from one to the other as you tilt the note. The Bell in the Inkwell on the front of the note is another new security feature. The bell changes color from copper to green when the note is tilted, an effect that makes it seem to appear and disappear within the copper inkwell.

"The new security features announced today come after more than a decade of research and development to protect our currency from counterfeiting. To ensure a seamless introduction of the new $100 note into the financial system, we will conduct a global public education program to ensure that users of U.S. currency are aware of the new security features," said Treasurer of the United States Rosie Rios.

"For 145 years, the men and women of the United States Secret Service have worked diligently to protect the integrity of U.S. currency from counterfeiters," said Director Mark Sullivan. "During that time, our agency has evolved to keep pace with the advanced methodologies employed by the criminals we pursue. What has remained constant in combating counterfeiting, however, is the effectiveness of consumer education initiatives that urge merchants and customers to examine the security features on the notes they receive."

Although less than 1/100th of one percent of the value of all U.S. currency in circulation is reported counterfeit, the $100 note is the most widely circulated and most often counterfeited denomination outside the U.S.

"The $100 is the highest value denomination that we issue, and it circulates broadly around the world," said Michael Lambert, Assistant Director for Cash at the Federal Reserve Board. "Therefore, we took the necessary time to develop advanced security features that are easy for the public to use in everyday transactions, but difficult for counterfeiters to replicate."

"The advanced security features we've included in the new $100 note will hinder potential counterfeiters from producing high-quality fakes that can deceive consumers and merchants," said Larry R. Felix, Director of the Treasury's Bureau of Engraving and Printing. "Protect yourself - it only takes a few seconds to check the new $100 note and know it's real."

The new design for the $100 note retains three effective security features from the previous design: the portrait watermark of Benjamin Franklin, the security thread, and the color-shifting numeral 100.

The new $100 note also displays American symbols of freedom, including phrases from the Declaration of Independence and the quill the Founding Fathers used to sign this historic document. Both are located to the right of the portrait on the front of the note.

The back of the note has a new vignette of Independence Hall featuring the rear, rather than the front, of the building. Both the vignette on the back of the note and the portrait on the front have been enlarged, and the oval that previously appeared around both images has been removed.

For a more detailed description of the redesigned $100 note and its features, visit www.newmoney.gov where you can watch an animated video, click through an interactive note or browse through the multimedia resources for images and B-roll.

Also, visit www.newmoney.gov for information on how to order free training materials for cash handlers, or you may download the materials directly from the Web site. The training materials for the $100 note are available in 25 languages.

New Rules for Gift Cards - Consumer Information Available

A new online publication to help consumers better understand how to protect themselves against harmful gift card practices was unveiled Monday by the Federal Reserve Board.

What You Need to Know: New Rules for Gift Cards is the third publication in a series designed to explain Board regulations to consumers in an easy-to-understand format. This publication describes the types of cards that are covered under gift card rules released last month and highlights key protections, including new limits on expiration dates, requirements for clear fee disclosures, and fee restrictions.

Gift cards have become a common and convenient gift alternative. The Board's new rules help ensure that consumers who give or receive gift cards are not surprised by expired cards and are protected from certain fees that reduce their value.

More information on the Board's gift card rules, which go into effect August 22, 2010, can be found at: www.federalreserve.gov/newsevents/press/bcreg/20100323a.htm.

New $100 Note Design To Be Unveiled Today!

U.S. Government to Unveil New $100 Note Design on April 21

WASHINGTON, D.C. – The new design for the $100 note will make its debut on Wednesday, April 21 during a ceremony at the Department of the Treasury’s Cash Room. The U.S. government redesigns currency in order to stay ahead of counterfeiters and protect the public. Decisions about the redesign of each denomination are guided by the government’s close evaluation of the range of ongoing counterfeit threats, whether from digital technology or traditional printing presses.

The ceremony in Washington, D.C., will be held at 10:00 a.m. U.S. EDT and will feature:

• Secretary of the Treasury Timothy Geithner


• Chairman of the Board of Governors of the Federal Reserve System Ben Bernanke


• Treasurer of the United States Rosie Rios


• Director of the United States Secret Service Mark Sullivan

When the new note begins circulating, it will be important for people to know that it is not necessary to trade in old-design notes for new ones. All U.S. currency remains legal tender, regardless of when it was issued.