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Vance introduces bill to increase deposit insurance protection
Sen. J.D. Vance, R-Ohio, recently introduced legislation aimed at increasing deposit insurance coverage for smaller and regional financial institutions, including all credit unions. The legislation would fully guarantee all noninterest-bearing transaction accounts at banks with less than $225 billion in assets, and at all credit unions regardless of assets held.
Under the Payroll Account Guarantee Act, all operating, business, and payroll accounts would be fully guaranteed for all credit unions and banks under the asset threshold. It would not levy fees against participating institutions.
Deposit insurance coverage has been a focus of discussion among lawmakers and regulators in the wake of bank failures earlier this year. NAFCU has reiterated the strength and resiliency of the credit union industry, noting credit unions “have not seen runs on their deposits like some banks because of the relationship they have with their members – who know their money is safe at their credit union.”
“While we are not advocating for changes for coverage limits for the NCUSIF at this time, any changes considered by Congress to FDIC coverage levels must include parity in coverage levels for the NCUSIF while not changing the tried and tested structure, funding, and operations of the NCUSIF,” NAFCU wrote to the Senate Banking Committee, of which Vance is a member, in May.
NAFCU will continue to advocate for deposit insurance parity without adding costs or burdens to credit unions.