Thousands of depositors in failed banks such as IndyMac and Nevada’s Silver State Bank who lost millions upon the failure of their banks will reap the benefit of a little-noticed loophole in the newly passed bank reform bill that will make permanent the temporary increase in federal deposit insurance coverage to $250,000 per account. That’s because the new law will extend the increased coverage limit back 10 months from the original effective date of Oct. 3, 2008 all the way to Jan. 1, 2008, meaning almost 10,000 depositors who had excess deposits (over the then-$100,000 insurance limit) in the banks that failed during that period are now eligible for the increased limits, according to the FDIC.

The retroactive increase in deposit insurance coverage will reduce the number of uninsured depositors from more than 10,000 to about 500 in the failed banks IndyMac, Silver State Bank, Hume Bank, ANB Financial, First Priority Bank and the Columbian Bank and Trust Co.

The FDIC mailed checks for the retroactive coverage yesterday. The FDIC is subtracting any deposit insurance already paid to those depositors under the $100,000 level and any dividends paid out by the FDIC as receiver of the failed banks.

The bank reform bill, signed into law Wednesday by President Obama, makes the temporary increase to $250,000, due to expire Dec. 31, 2013, permanent.