Dec 102012

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.

Insured Commercial Banks and Savings Institutions as of September 30, 2012
Distribution of Noninterest-Bearing Domestic Deposits
by Asset Size
FDIC Quarterly Banking Profile, 3rd Q 2012, Table 1

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.

Serge Milman

Serge Milman is the Principal Partner of San Francisco, CA based SFO Consultants which provides Strategy, Finance and Operations Management Consulting services. He is also the Principal of Optirate – a blog dedicated to growth and profitability strategies for Banks and Credit Unions. Serge can be reached at

  One Response to “To TAG or not to TAG”

  1. Serge,

    The elevation of the TAG issue may be trade associations secretly advocating for their biggest members under the pretense of protecting the majority of members… as much as I hope I’m wrong.

    Thanks for the factoid because I did not know how few accounts community banks had that fell under TAG.

    ~ Jeff

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