Temporary Liquidity Guarantee
Program Decision Deadline Is Friday
ABA is reminding banks and bank holding companies that Friday is the deadline for completing the Temporary Liquidity Guarantee Program election form -- on FDICconnect -- to participate in or opt out of either one or both program components -- the Transaction Account Guarantee Program and the Debt Guarantee Program. All members of a holding company must make the same election on each component of the Temporary Liquidity Guarantee Program. A decision by one member of a group to opt-out will be irrevocable and binding on all other group members, the FDIC said.

In related news, ABA has learned that that some banks are developing special purpose vehicles that would purchase FDIC guaranteed debt issued by smaller banks (that participate in the FDIC program). The SPV then would be able to issue multiple series of notes in specific maturities. The concept is intended to provide community banks with a more attractive cost of funds by participating in larger issues that could attract central banks and rates buyers. Read frequently asked questions on TLGP participation or opting out. Go to FDICconnect. u

ABA Seeks Changes to
Farm Service Interest Rate Proposal
ABA last week urged the Farm Service Agency to modify portions of a proposal that would establish maximum interest rates tied to specific indices for its guaranteed farm loan program. ABA said its long-held position is that all references and limits to guaranteed loan pricing should be removed from the regulations. "Limits can often result in farmers not receiving credit," ABA said. ABA strongly recommended that if maximum rates are adopted in the final rule, that they should be tied to an index with a rational relationship to the cost of local funds and pricing of agricultural credit. The proposed indices, the Wall Street Journal prime rate and the 10-year Treasury bill, don't meet those tests. The final rule should also clarify that the maximums only apply to the guaranteed and unguaranteed portions of a loan at the time of origination or restructuring. Read the comment letter. u

Retirement Plan Training Offered in December
Don’t forget to register for the SDBA's retirement plan training being offered in mid-December. Two, half-day seminars are being offered on Dec. 17 in Pierre and Dec. 18 in Sioux Falls. Health Savings Accounts will be offered in the morning and IRA Forms, Reporting and Compliance Issues will be offered in the afternoon. With the current economic conditions, health savings accounts are only going to continue to grow in numbers. This will be a comprehensive HSA program plus the new 2009 eligibility and contribution numbers. The afternoon program is a brand new course that has grown from comments and suggestions from past attendees. The course will tie forms, compliance and reporting together and how one affects the other. Read more. Register online. u 

IRS Offers Training Sessions
for Money Service Businesses
The IRS has a little-known education program designed to help combat money laundering by first helping people and businesses determine if they meet the definition of a money services business (MSB), then to educate them on their reporting and recordkeeping requirements. Six agents in the IRS are considered to be Bank Secrecy Act specialists, and their job is to provide education to MSBs. MSBs include currency dealers or exchanges, check cashers, sellers of travelers checks, the U.S. Postal Service or any money transmitters that "exchange more than $1,000 for any customer on any day." The only requirement for the training is that there be a minimum of 25 people for each presentation. All costs are covered by the IRS. More information on the training. More information on the IRS MSB Center. u

School Targets Sales Training and Management
The Schools of Banking is offering the three-day Sales Training & Management School on Feb. 24-26, 2009, in Topeka, Kansas. Designed for individuals who are responsible for leading and/or managing their bank's sales force and sales efforts, the school provides comprehensive training focused on directly impacting the bank's bottom line. Through extensive classroom interaction and case study applications, participants will develop an understanding of bank sales as a process, while developing skills related to leading their sales force and implementing sales efforts within the bank. The school is being presented in cooperation with the SDBA and will be limited to 35 students. More information and registration form. u

FDIC Releases Overdraft Program Study
Eight-six percent of banks operated at least one formal overdraft program, and 69.4 percent started their programs after 2001, according to an FDIC study released this week. The study, which began in 2006, found that more than 75 percent of institutions automatically enrolled customers in automated overdraft programs, although customers usually were permitted to opt out. The median automated overdraft fee was $27, but fees assessed for linked-account and overdraft line of credit programs typically were lower.

About 75 percent of accounts did not have any overdrafts in 2006, and low-income customers were only somewhat more likely to incur overdraft fees, the study found. Some 16.7 percent of low income customers had one to four overdrafts, compared with 13.9 percent for moderate-income and 10.5 percent for high-income customers. Banks earned an estimated $1.97 billion in insufficient-fund-related fees in 2006, representing only "6 percent of the total net operating revenues earned by the banks," the study said. Some consumer groups have long claimed that banks earn $14 billion annually from such fees. Read more. Read the report. u