On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law bringing with it a litany of financial reform measures that are just now coming to light. As the new year progresses, many of these provisions are taking effect, including one very appealing change in the FDIC insurance limits.
Buried deep within the Dodd-Frank Act lies a provision, in Section 343, which, for a two year period ending on December 31, 2012, affords unlimited FDIC insurance coverage for all funds held in non-interest bearing transaction accounts, such as checking accounts, at FDIC insured banks regardless of account balance. This coverage is separate from and in addition to the $250,000 standard maximum deposit insurance amount that applies to each depositor under the FDIC’s general deposit insurance rules, regardless of depository account type.
So what does that mean to you? The possibility of entering a transaction, whether it is a 1031 exchange or a complex multi party escrow arrangement, with NESF and any one of our banking partners without any fear of losing a single penny as a result of a bank failure. Any amount of money being held in the proper type of account will be afforded complete FDIC coverage. Unlike the FDIC’s previous TAG program, which offered similar coverage, this provision does not contain an opt in or opt out clause allowing banks to choose whether or not to participate. In this case, clients can benefit from the increased coverage no matter which bank they choose to utilize.