ICBA Urges Congress to Ensure Deposit Insurance Reforms Enhance Small Business Coverage, Curb Favorable Too-Big-To-Fail Treatment

Washington, D.C. (Sept. 10, 2025) — The Independent Community Bankers of America (ICBA) today called on Congress to consider deposit insurance reforms that enhance coverage for small businesses, address the more favorable regulatory treatment the nation’s largest banks receive under the current framework, and ensure community banks are not penalized.

In a statement for the record for today’s Senate Banking Committee hearing on deposit insurance reform, ICBA urged lawmakers to:

• Curb the implicit government guarantee and favorable treatment of too-big-to-fail financial institutions by requiring the largest banks to pay systemic risk premiums to fund the FDIC’s Deposit Insurance Fund.

• Extend insurance coverage for transaction accounts used by small businesses, nonprofit organizations, municipalities, and other entities.

• Ensure any reform does not provide the FDIC unlimited discretion to increase deposit insurance costs for community banks — either through special assessments or increases to base deposit insurance rates.

• Avoid procyclical increases to deposit insurance during times of stress.

• Ensure appropriate limits are in place to cap and tier the funding the FDIC collects as countercyclical funding to build a healthy and sustainable DIF.

• Require the FDIC to conduct a targeted study on the costs and implications of providing additional deposit insurance coverage for transaction accounts and make these findings public on an expedited basis.

• Ensure any reforms prohibit the bailout or protection of nonbanks or novel banks that have not paid into the FDIC’s deposit insurance system.

“With the federal government using its systemic risk exception to protect uninsured deposits at failed large banks, Congress must ensure that any reforms to FDIC deposit insurance help address the nation’s ongoing problem of too-big-to-fail financial institutions,” ICBA President and CEO Rebeca Romero Rainey said. “ICBA looks forward to continuing to work with policymakers to ensure the nation’s deposit insurance system offers community bank customers the same protections as those provided to customers of larger institutions.”

Revisiting deposit insurance and resolution requirements so that community bank customers have the same protections as the largest players in the market is a key provision of ICBA’s “Repair, Reform, and Thrive” plan for the Trump administration and 119th Congress.

About ICBA
The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.