Since the FDIC has raised the insurance level to $250,000 permanently, do we still need to post our participation in the TAGP program in our lobby (that expires 12/31/10)?

Yes, the TAGP is a completely seperate program. If your bank participates in TAGP, all tranaction accounts, including some NOW accounts if they do not earn more than 0.25%, are covered for the entire amount in the account. You still need that notice until 12/31/10. That is, unless it's renewed again!

I just found out that the TAGP was extended until 12/31/12. Should we change our lobby signage yet, or do we need to wait for some official notification?

Actually, the program has not been extended. Non-interest bearing accounts now covered by TAG will be FDIC insured. Not much difference to the customer, but different source of guaranty money.

Banks who are not in the TAG program will have their non-interest bearing accounts insured by FDIC coverage. There's no opting out.

It's actually a bit of both:

FDIC Insurance is now set at $250,000 with no expiration (permanently).

TAGP continues through year-end 2010 as is.

Beginning 1/1/2011 through 12/31/2012 TAG will exist in a different form: It will NOT be optional and it will ONLY cover non-interest bearing accounts.

This will mean that when FIs are allowed to pay interest on business accounts, businesses will have to make a choice between getting that interest and only being insured up to $250K or eschewing the interest and being fully covered by TAG (until it expires).

Just don't confuse it with TAG, because the G in TAG stands for Guarantee (to distinguish it from insurance), and the new two-year coverage is insurance. I can imagine there is absolutely no reason for the FDIC to extend the TAG program beyond 12/31/10 now.

Incidentally (well, it's not incidental if you're at a CU), the parallel insurance coverage for demand deposits at NCUSIF-insured credit unions is effective now, starting on 7/21, when the law was enacted. Both provisions sunset 12/31/12.