FDIC seen extending for 6 months popular guarantee for deposit accounts used by businesses

Business-account guarantee likely to be extended

WASHINGTON — Federal bank regulators are expected to extend at least through year’s end an unlimited government guarantee for special deposit accounts used by businesses.

The guarantee for non-interest-bearing “transaction” accounts was part of a program backing hundreds of billions of dollars in U.S. banks’ debt that was put in by the Federal Deposit Insurance Corp. at the height of the financial crisis in October 2008. The unlimited guarantee for the accounts supplanted the traditional $250,000 insurance limit.

The guarantee is scheduled to expire on June 30. The FDIC’s board is expected to vote at a meeting Tuesday to extend it for at least six months, a person familiar with the situation said Monday. The person spoke on condition of anonymity because the FDIC board hasn’t yet acted.