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James Ballentine of the American Bankers AssociationCorporate treasurers may need to find new places to park their money come Jan. 1, since it seems less and less likely that Congress will extend the life of unlimited Federal Deposit Insurance Corp. insurance on interest-free checking accounts.

In 2008, in the depths of the financial crisis, the FDIC created the Transaction Account Guarantee (TAG) program to provide such unlimited deposit insurance, largely to protect against bank runs. In 2010, Congress extended the program through the end of this year. Without congressional action, FDIC insurance on these accounts will revert back to the original cap of $250,000 per account as of Jan. 1.

According to the Independent Community Bankers of America (ICBA), companies and municipalities hold about $1.4 trillion of corporate and municipal deposits in these accounts. With unlimited FDIC insurance, treasurers have felt comfortable leaving their funds in a single account at one bank. Now, however, they will likely have to scramble to move the money into multiple bank accounts under $250,000 each or out of the banking system entirely and into money market funds.

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