ICBA unveils principles for deposit insurance reform

With lawmakers deliberating deposit insurance reform proposals, ICBA released recommended principles to inform the debate.

Details: In a new Main Street Matters blog post, ICBA President and CEO Rebeca Romero Rainey said:

• The large bank failures of 2023 demonstrated the clear need to reform the nation’s deposit insurance system.

• Recently introduced bipartisan legislation has provided a good starting point for these discussions.

• ICBA will continue to advance its principles to ensure reforms reinforce ongoing depositor confidence in community banks, protect community banks from high-cost assessments, and curb the implicit guarantees now offered to the largest too-big-to-fail banks.

New Bill: ICBA recently expressed support for the Main Street Depositor Protection Act (S. 2999) introduced by Sens. Bill Hagerty (R-Tenn.) and Angela Alsobrooks (D-Md.). In a letter to the lawmakers, ICBA said the bill is a great step to promote balanced deposit insurance coverage across the banking industry, strengthen the deposit insurance system, and support small businesses that use transaction accounts for payroll and other recurring expenses.

Treasury Support: Treasury Secretary Scott Bessent indicated support for congressional efforts to modernize deposit insurance during the recent Federal Reserve Community Bank Conference. At the conference, Bessent said he was “encouraged to see emerging bipartisan support for increasing FDIC insurance limits on noninterest-bearing transaction accounts.”

More Advocacy: ICBA last month called on Congress to consider deposit insurance reforms in a statement for the record for the Senate Banking Committee hearing on deposit insurance reform.

Engagement: Through ICBA’s Deposit Insurance Working Group, ICBA is working to advance principles for deposit insurance reform for community banks. Revisiting deposit insurance requirements is a key platform in ICBA’s “Repair, Reform, and Thrive” plan.

READ THE BLOG POST