Dec 5 - Banking data show that $1.5 trillion in bank deposits are insured by the FDIC's full coverage of noninterest-bearing transaction accounts, the Independent Community Bankers of America said. Congress must act to temporarily extend this FDIC TAG insurance before its abrupt Dec. 31 end. Banks fully pay for this TAG coverage as part of their FDIC insurance premiums and no taxpayer money is used to pay for FDIC insurance. Notably, Congress is considering new legislation (S. 3637) introduced by Senate Majority Leader Harry Reid to temporarily extend TAG.
“Congress shouldn’t be rolling the dice with the fate of $1.5 trillion in deposits that will become uninsured and a risk asset for businesses and state treasurers overnight if TAG is allowed to expire on Dec. 31,” said Camden R. Fine, ICBA president and CEO. “The good news is that Congress holds the power right now to ensure these deposits remain insured. Promptly extending this successful bank-funded insurance temporarily until there is greater stability in the economy and global financial sector makes complete sense and will minimize the risk of widespread disruption in the banking industry and economic damage.”
An extension also would help keep small-business and municipal accounts secure and maintain deposits in the Main Street community banks that do the bulk of the nation’s small-business lending. It also would prevent even greater deposit concentration in a handful of mega-institutions at no cost to taxpayers.
There is widespread support for temporarily extending the TAG coverage. ICBA and community banks nationwide, state banking associations, the ICBA Minority Bank Council, a broad coalition of the nation’s bankers’ banks, the American Bankers Association, the American Land Title Association, the Conference of State Bank Supervisors, the International Franchise Association, the National Association of Federal Credit Unions, the National Black Chamber of Commerce, the Retail Industry Leaders Association and others have expressed their support for continuing the coverage.
For more information, visit www.icba.org/advocacy.