The FDIC has issued a notice reminding FDIC-insured depository institutions that, absent a change in law by January 1, 2012, the FDIC’s temporary unlimited insurance coverage for noninterest-bearing transaction accounts (“NIBTAs”) will expire December 31, 2012. The temporary unlimited insurance coverage program was promulgated by the Dodd-Frank Act. Lawyer Trust Accounts (“IOLTAs”) are among the accounts affected.
Beginning January 1, 2013, NIBTAs will be aggregated with other account deposits for purposes of the standard $250,000 limit on deposit insurance coverage. The FDIC is encouraging insured institutions to do the following in preparation for the change: (i) provide adequate advance notice to NIBTA account holders of the scheduled change (a sample notice is provided); (ii) remove notices regarding the unlimited insurance coverage by January 2, 2013; and (iii) review any account agreements and disclosures affected by the change and make appropriate modifications.