Legislators recently reintroduced a bill increasing FDIC insurance limits up to $5 million at banks with less than $250 billion in assets. .The Main Street Depositor Protection Act was introduced March 25 by Sens. Angela Alsobrooks (D-Md.), Bill Hagerty (R-Tenn.), Catherine Cortez Masto (D-Nev.), Jim Banks (R-Ind.), Ruben Gallego (D-Ariz.) and Cindy Hyde-Smith (R-Miss.)Hagerty said the bill is “narrowly targeted to address a very specific concern that manifested itself during the Silicon Valley Bank collapse — a run on non-interest bearing transaction accounts typically used to make payrolls by small businesses that are very important customers for our local and regional banks.” The original bill was introduced last October, and would have increased the deposit insurance cap to $10 million. The Independent Community Bankers of America supported the proposal, calling it “an important start to strengthening the nation’s deposit insurance system that minimizes additional costs for community banks.” Republican members of the House Committee on Financial Services recently introduced three other proposals:Legislation sponsored by Andy Barr of Kentucky authorizing the secretary of the Treasury to direct the FDIC and the National Credit Union Administration to establish emergency transaction account guarantee programs. A bill introduced by Dan Meuser of Pennsylvania automatically indexing the maximum deposit insurance amount for inflation every five years. Legislation introduced by Marlin Stultzman of Indiana requiring the FDIC and National Credit Union Administration to analyze whether insurance coverage should increase on covered transaction accounts.
