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80 State Associations Press for TAG Extension

Posted on 8/30/2012

Eighty state bankers associations, including NDBA and ICBND, yesterday wrote to House and Senate leaders strongly urging Congress to pass a temporary extension of the Transaction Account Guarantee program, which is set to expire at the end of this year.

"Because the economic recovery remains fragile, the abrupt expiration of insurance coverage for non-interest bearing transaction accounts carries the risk of sudden dislocation of funds and other unintended consequences for banks, credit availability, and the economy," the trade groups wrote.

"Temporarily extending the TAG program until the economy and financial system are truly recovered and interest rates are more normalized would eliminate one element of uncertainty facing depositors," they added. The letter -- which was covered by Reuters -- also noted that a two-year extension is consistent with the Federal Reserve's intention to keep the federal funds rate at exceptionally low levels at least through 2014.

To read the letter visit: http://www.aba.com/Issues/LetterstoCongress/Documents/HouseJointTAGExtensionLetter.pdf



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