In May, the FDIC established new rate cap rules that would prevent banks that were considered less than well capitalized from seeking deposits in exchange for interest rates that significantly exceeded the FDIC’s rates. Now, according to a recent post from Bank Deals, some customers are seeing rate cuts that mirror the FDIC’s weekly national deposit rate averages.
According to the site, some customers have seen reward checking rate decreases from 4.01% APY to 0.88% overnight. The reason banks are giving for their sudden decrease in rates is that they’ve received cease-and-desist orders to ensure they reduce their rates. Some, like Libertad Bank, have even opposed the rule in writing because they don’t believe that reward checking accounts should be considered high-cost accounts.
Because the FDIC appears to be enforcing its rule more aggressively, it may be time to determine whether your bank is less than well capitalized. One way to tell is by seeing if it has any public enforcement actions against it or checking its financial health. If your bank doesn’t seem to be in the best standing, it may be time to consider a new one before your current rate gets threatened.
>> Checking Account Rate Deals
