Dec 102012
To TAG or not to TAG

Should Community Bankers care about TAG!? Do they need it?  Do they use it?  Some would have you believe that TAG, and its renewal are central to the survival of Community Banks… without it, deposits would evaporate… Luckily, that isn’t the case.  Not at all.  Just take a look at FDIC Quarterly Banking Profile report for 3rd Quarter 2012. Data shows that Community Banks use TAG to insure just $50 billion of deposits (~3% of the total TAG deposits), with a typical Community Bank insuring an average of just 17 accounts.  Not surprisingly, the primary users of TAG are a small number of very large banks… just 108 banks to be precise that cumulatively hold more than 90% of the TAG insured deposits. Should Community Bankers care about TAG?  Is it important to their business?  The numbers very clearly demonstrate that TAG is only important to 108 large banks.  Community Banks derive little benefit from the program.

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