WASHINGTON - The reforms now sweeping every corner of federal deposit insurance will soon change the sticker informing bank and thrift customers that their money is safe.
The logo guaranteeing funds to $100,000 is plastered on flat surfaces throughout financial institutions, from the glass of branch doors to the marble of teller stations to the paper of promotional pamphlets.
But a law enacted last month requires the Federal Deposit Insurance Corp. to design a new logo for the Deposit Insurance Fund, which is being created by combining the Bank Insurance Fund and the Savings Association Insurance Fund.
Bankers' views of how much the change will affect them vary. The adjustment for small institutions will probably be minor, compared with larger banks that want to take advantage of the logo's symbol of confidence in their advertising.
"There's definitely going to be a significant cost," said Jim Lavoie, the president of the $3.2 billion-asset Middlesex Savings Bank in Natick, Mass., which has 25 branches. "We have the logo on all of our brochures. Whenever ... [the change] is effective, we're going to have to plan ahead and order all new materials."
But Daniel T. Cannon, the president of Centreville National Bank of Maryland, showed little concern about the coming change. His bank, which has $300 million of assets and eight branches, would only have to change signs at about 40 teller stations, he said.
"From a facilities standpoint … it won't be a major undertaking," he said. "We'll order the new logos and post them - and that'll be the end of it."
The bank and thrift funds have had separate logos since 1989, when Congress passed legislation creating the thrift fund to replace the crumbled Federal Savings and Loan Insurance Corp. Banks opposed that law and persuaded Congress to make thrifts use a different FDIC logo. The banks' logo says "FDIC" in a rectangle; the thrift fund logo has an eagle in a circle.
The agency plans to propose a prototype of the new Deposit Insurance Fund logo as early as May and approve the final version by early November, after a comment period. The new logo is expected to look similar to the bank fund logo, with "FDIC" in a rectangle, but the law requires it to include the words "insured deposits are backed by the full faith and credit of the United States Government." (That declaration is already on the thrift fund logo.)
Current regulations require the logo to be displayed at teller stations, and the FDIC provides stickers with those logos for free. The agency's board recently set aside $2.25 million to mail new logos and brochures to institutions once the new design is ready.
The new law also changed insurance coverage limits, and those will also affect the logo. The current stickers state that each depositor is "insured to $100,000" - reflecting the current limit. But the law increased coverage for certain retirement accounts to $250,000 and gave the agency the authority to raise the ceiling to keep pace with inflation, starting in 2010.
The FDIC has not yet figured out how to incorporate those changes into the logo.
"There are all types of things being looked at," said Richard Osterman Jr., a senior counsel in the FDIC's legal division and part of the design team. He added that the agency's board of directors will make the final decision.
Mr. Osterman said options include a logo distinguishing between coverage for general and retirement accounts, one that leaves out coverage limits, or even one that can easily be altered when coverage limits change.
But changes to the new logo may be minimal, Mr. Osterman said, as customers have to come to associate the seal with security.
"The symbol we have has been viewed as a symbol of confidence for the public and the industry, and we may not want to move too far from that," he said.
Extensive changes to the logo for banks have occurred only twice since an FDIC seal made its debut in 1934. Since 1966, the only adjustments - aside from color changes - have been to show rising coverage limits for general accounts. The limit was raised in 1969, 1974, and 1980.
A logo change will mean an extensive marketing adjustment for much of the industry.
Some institutions customize their branch signs to include the FDIC logo. The symbol is pervasive in advertisements, even though rules for advertising depository products - which the agency is considering changing as well - require only the "Member FDIC" tag line.
"The vendors are probably dancing on the rooftop," said Bob Schmermund, the executive vice president for corporate communications and member relations at America's Community Bankers.
"I don't think the FDIC is going to make it a criminal offense if a bank doesn't do this overnight," Mr. Schmermund said. "But we need to make sure that we tell our members that there are some operational issues and these are what they are."
Contacts at the biggest banks - where millions are spent each year on marketing - said it would be premature to estimate the cost of the change.
"It's too early for us to know," said Charlotte Gilbert-Biro, a spokeswoman for JPMorgan Chase & Co.
Susie Hicks, the merchandising relationship manager for Wachovia Corp., said producing new magnets and affixing them at teller windows would be "painless." A costlier endeavor will be changing the signs at drive-up windows, where branches are also required to display the logo, she said.
"You are talking about a huge difference in the amount of money," Ms. Hicks said.
FDIC officials said there will probably be a grace period for institutions to make the transition.
