The Federal Deposit Insurance Corporation (“FDIC”) has issued a notice entitled “Weekly National Rates and Rate Caps” in which it reminded less than well capitalized FDIC-insured institutions that they can use the redefined national rate to determine their compliance with interest rate restrictions under Part 337.6 of the FDIC Rules and Regulations. The notice lists the national rate and rate cap for various products as updated November 2, 2009. Although the rule redefining the national rate does not become effective until January 1, 2010, such institutions are free to choose between using the national rate or continuing to use the local market approach until that date. After January 1, only the redefined national rate may be used in making such determinations. The rule redefines the national rate to mean a simple average of rates paid by depository institutions as calculated by the FDIC. The rule also limits rates paid on deposits solicited by less than well capitalized FDIC-insured institutions to prevailing rates in the applicable market area plus 75 basis points. Unless an institution seeks and receives a determination from the FDIC that it is operating in a high-rate area, the prevailing rate in all markets will be deemed to be the national rate after January 1. The notice refers to Financial Institutions Letter FIL-25-2009. These documents, as well as related Questions and Answers, are available at http://www.fdic.gov. National rates and national rate caps are posted weekly at http://www.fdic.gov/regulations/resources/rates/index.html.
If you have any questions, please contact Howard O. Hagen at 515-246-4543 or hhagen@dickinsonlaw.com, or Arthur Owens at 515-246-4515 or aowens@dickinsonlaw.com.
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