Topic: Deposit Insurance Coverage
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One of our customers has an account with more than $250,000 in it, and the customer is not interested in repurchase agreements or CEDARS. Are there any other options?
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There is an IDFPR Interpretive Letter, 98-12, explaining that state banks may collateralize a customer’s deposits. The letter states that the Illinois Banking Act does allow the bank to pledge assets to secure deposit accounts, but you should contact the FDIC to see if you need the FDIC’s written consent before pledging any assets.
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How are municipal accounts regulated in Illinois? Does the state have a list of approved safekeeping institutions? What should we do if account balances are in excess of the FDIC insurance limit?
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Illinois law allows any FDIC-insured bank to hold investments and deposits of public funds. 30 ILCS 235/2(b)
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We learned that when Regulation Q was repealed, the premium restriction rules were moved. Where can we find those rules now?
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You had asked where the rules from former Section 217.101 of Regulation Q, which excluded certain account premiums from the definition of “interest,” can be found after Regulation Q’s repeal. The FDIC decided to republish the premium rule in a new location, 12 CFR 330.101. In the accompanying notice, the FDIC explained that while the…
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Has the change in the FDIC insurance coverage from $100,000 to $250,000 changed the definition of a jumbo CD as well?
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It appears that the threshold for jumbo deposits has not changed. The FDIC’s Weekly National Rates and Rate Caps still define “Jumbo” deposits as deposits of $100,000 or more.