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Delaware State Treasury Issues Advisory on FDIC TAG Program
DOVER, DE, Dec 13, 2012 (MARKETWIRE via COMTEX) --
The Delaware State Treasury (Treasury) issued an advisory notifying
Delaware residents, businesses, nonprofits and government agencies on
the impending expiration of the Federal Deposit Insurance
Corporation's (FDIC) Transaction Account Guarantee (TAG) Program on
December 31.
The TAG program was created in 2008 to strengthen confidence in the
U.S. banking system and to ensure liquidity. It provides an uncapped
federal guarantee on funds held at FDIC-insured depository
institutions in noninterest-bearing transaction accounts. Many of
these accounts are checking accounts used by individuals, businesses,
nonprofit institutions and government agencies to carry out their
financial operations. Failure to renew the TAG Program will result in
such transaction accounts being subject to the FDIC insurance cap of
$250,000.
In response to recent Senate action on the measure, Delaware State
Treasurer Chip Flowers issued a Directive that requires financial
institutions holding state deposits to set aside sufficient
collateral to ensure the safety and security of state funds held in
transaction accounts at their institutions. Under the Directive, such
funds will have to be collateralized by December 31 -- the date the
White House and Congress need to reach resolution on the "fiscal
cliff."
"Until the issue as to whether the TAG Program will exist after
December 31st is resolved at the federal level, it is critical that
Delawareans using checking or other transaction accounts in
FDIC-insured financial institutions for business or personal uses
ensure their money is safe and properly secured. This is the
rationale underlying the issuance of this advisory by the Delaware
State Treasury," Flowers said.
"Furthermore, the Directive issued today protects our state funds.
The safety and security of state funds will always be the top
priority of the current administration of the Treasury. While the
Treasury will continue working with our colleagues to find a
compromise solution to extend the TAG Program that would be voluntary
and not increase the size of the federal deficit, in the interest of
Delawareans, I am hopeful that the White House and Congress will find
common ground on this important program prior to the end of the
year," Flowers said.
Citing significant benefits to state and local governments, Flowers
and other members of the National Association of State Treasurers
(NAST) have been urging passage of a two-year extension of the TAG
Program.
For additional information, visit treasury.delaware.gov.
Image Available: http://www.marketwire.com/library/MwGo/2012/12/14/11G003127/ChipFlowers-411430944730.jpg
Deputy State TreasurerÂ
Erika J. Benner
(302) 672-6700
SOURCE: Delaware State Treasury
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