Community bankers have also learned that emergency measures, like the 2008 Transaction Account Guarantee program, work best when the FDIC can quickly implement these programs without first obtaining consent from Congress. As such, the principles suggest that lawmakers provide the FDIC with unencumbered authority to establish deposit insurance programs, thereby providing stability during times of crisis, and to promote changes to the least-cost resolution framework that allow the FDIC to select bids that protect all depositors, including uninsured depositors. LEGISLATIVE PROPOSALS TO REFORM DEPOSIT INSURANCE Recent developments in Congress regarding these priorities include the Main Street Depositor Protection Act (S. 2999), a bipartisan bill introduced by Sens. Bill Hagerty (R-Tenn.) and Angela Alsobrooks (D-Md.) to establish a permanent framework for deposit insurance reform and increase coverage to $10 million for transaction accounts. The proposal protects small business payroll accounts, which often exceed the current $250,000 limit. It also shields community banks with assets under $10 billion from special assessments or higher base deposit insurance premiums during a 10-year transition period. The bill builds on the FDIC’s earlier recommendations, which outlined several reform options but lent preference to targeted coverage reforms. It also establishes a solid starting point for broader discussions on how to modernize deposit insurance while keeping costs manageable for community banks. The House Financial Services Committee passed a separate bill (H.R. 3234), led by House majority whip Tom Emmer (R-Minn.) and Rep. Joyce Beatty (D-Ohio), that would raise the percentage threshold of reciprocal deposits that a bank may hold without being considered brokered. H.R. 3234 would allow community banks to rely more heavily on reciprocal deposits to achieve higher aggregate levels of deposit insurance coverage. The committee also passed the Community Bank Deposit Access Act of 2025 (H.R. 5317), Chairman French Hill’s (R-Ark.) bill to allow custodial deposits to be held by community banks without being considered brokered deposits, provided the custodial deposits do not exceed 20% of the banks’ total liabilities. And earlier this year, committee ranking member Maxine Waters (D-Calif.) reintroduced a bill, H.R. 4551, to update the deposit insurance framework for business payment accounts and enhance emergency tools for the FDIC to use in future crises. LOOKING AT LONG-TERM STABILITY Deposit insurance reforms will require thoughtful collaboration across the industry. While approaches may differ, community banks need a clear voice in the process. As these discussions move forward, ICBA will work to ensure policymakers keep community banks’ unique role front and center. Jenna Burke is ICBA’s executive vice president and general counsel for government relations and public policy. As lawmakers review possible updates to the deposit insurance framework, ICBA members are united by the shared goals of protecting depositors and keeping community banks at the center of reform efforts. Community Banker 17
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