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Senate Majority Leader Harry Reid has sponsored a stand-alone bill to give the Transaction Account Guarantee program another two years, but its passage is not a slam dunk.
November 27 -
Margin pressure, regulatory hurdles and intense competition will test the nation's smallest banks next year, industry experts predict. Those issues could lead to a resurgence of consolidation among community banks.
November 27 -
While it's unlikely Congress will enact a bill solely devoted to extending full FDIC coverage for transaction accounts, the "lame-duck" session does allow several opportunities for renewing the deposit insurance program.
November 16
StoneCastle Cash Management, an investment adviser that provides funding solutions for community banks, is buying a listing service for buyers and sellers of certificates of deposit.
The unit of StoneCastle Partners in New York said Tuesday it would buy the assets of eCD Market, which operates an online marketplace for CDs.
Financial terms of the transaction, which would give StoneCastle an exclusive license for eCD's platform, were not disclosed.
According to the companies, eCD enables community banks and other financial institutions to obtain insurance coverage for large cash balances via a nationwide marketplace of participating banks who offer federally insured CDs, while banks can use the marketplace to acquire non-brokered time deposits and forge new relationships with institutional customers.
Eric Lansky, a managing director with StoneCastle Partners, says uncertainty surrounding the expiration of the Transaction Account Guarantee program and proposed changes to money market rules present an opportunity for StoneCastle, which helps community banks attract and retain cash from large depositors.
StoneCastle has placed about $2.2 billion in federally insured deposits among roughly 430 mostly community banks.
The deal comes as the TAG program, under which the FDIC guarantees funds that exceed $250,000 in noninterest-bearing accounts, is set to expire on Dec. 31. About $1.6 trillion in TAG-insured deposits sat in U.S. banks at the end of last year, according to the Federal Reserve Bank of St. Louis.
Community banks are lobbying Congress to extend the program, which was created during the financial crisis to assure depositors that their money is safe. On Monday, Senate Majority Leader Harry Reid, D-Nev., introduced legislation that would extend the program for two years.
