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FDIC Consumer News
Interest-Bearing Accounts and FDIC Insurance
As previously reported, the 2010 Dodd-Frank financial reform law allows banks, for the first time, to choose to pay interest on any type of checking account as of July 21, 2011. A temporary program through December 31, 2012, also provides unlimited deposit insurance for certain checking accounts that pay no interest. The FDIC wants you to know that these two changes could be important to any depositor who had unlimited deposit insurance coverage.
“If your bank on its own converts your non-interest bearing account to an interest-bearing account, you will be insured up to the basic $250,000 limit,” explained Martin Becker, an FDIC Senior Deposit Insurance Specialist. “Your bank must notify you if your account will no longer have the temporary, unlimited insurance coverage. If you have funds over the $250,000 limit, you can then decide to restructure your deposits at the bank or move some funds to another bank to be fully insured.”
To learn more, call toll-free 1-877- ASK-FDIC (1-877-275-3342) or visit www.fdic.gov/deposit/deposits.
New Disclosures if a Credit Score Is Used in a Loan Decision
Under new federal rules, if a lender uses a credit score to help set material terms (such as the interest rate) when acting on your application for a loan or credit card, the lender must disclose the credit score and related information to you, free of charge. The lender also must provide the information if it is used in deciding whether to make the loan. You can also order a free copy of your credit report from the credit bureau that provided information used to help calculate the score, so you can review the report for inaccurate information.
The new rules from the Federal Reserve Board and the Federal Trade Commission became effective August 15, 2011. For answers to common questions about credit reports and credit scores, go to www.federalreserve.gov/creditreports.
New Rule Targets Unaffordable Credit Card Debt
Under a new rule effective October 1, 2011, lenders must consider individual income and not household earnings when considering applications for a new credit card or an increased credit limit. The Federal Reserve Board rule is intended to protect consumers from incurring debts they cannot pay. For more information, start at go.usa.gov/KDN.
Debit Card Fees Capped, Effect on Consumers Uncertain
After months of industry advertising and debate on both sides of the issue, the Federal Reserve Board has finalized a rule that caps the fees paid by merchants to card issuers for every debit card transaction. Under the rule, the Fed expects the debit card transaction fee to drop from an average of 44 cents to about 24 cents. The Dodd-Frank law required the Fed to implement the rule. The effect on consumers and bank card issuers is uncertain. The new fee cap will take effect on October 1, 2011.
Last Updated 8/30/2011