Should I care about this new Wall Street Reform Act?


The answer is maybe.  As a business owner, you may feel an impact as your bank begins to implement extensive and new regulations.  It is called the Dodd-Frank Wall Street Reform and Consumer Protection Act and it was signed by President Obama on July 21, 2010. It is a bill that contains some serious reforms including the establishment of a systematic regulatory body designed to rein in the American banking system as well as provide some additional consumer protections.  Not much detail is known at this point but I understand it will be chock full o’ rules and restrictions – thousands of pages covering traditional banks.

The one little thing I do know about it that might matter to you is that it will make permanent the current standard maximum deposit insurance amount of $250,000.   Coverage was set to return to $100,000 in 2014.  Currently many banks participate in the FDIC Transaction Account Guarantee (TAG) Program which provided for unlimited FDIC insurance for noninterest-bearing transaction accounts in all banks through 2010.  I know this is confusing but  effective on December 31, 2010 and continuing through December 31, 2012, all noninterest-bearing transaction accounts in all banks will have unlimited coverage.  This is good!

A noninterest bearing transaction account is just that.  If your bank account does not earn interest, you are covered.  So no money market checking accounts or savings accounts of any type.  Most of you tend to have general operating accounts and/or payroll accounts so you are more than likely covered.

Expect to see more around banks paying interest on regular commercial checking accounts, which up until this bill, has been prohibited.  But…this will cause your FDIC coverage to cease.  I’ll post more as I learn…..

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