CBAI ACTION ALERT - Urge Congress to Extend Full Transaction Account FDIC Insurance Coverage
September 12, 2012
During the depths of the financial crisis in October of 2008, the FDIC established full deposit insurance coverage for non-interest-bearing transaction accounts to support community bank liquidity and stability and to prevent the sudden withdrawal of bank deposits which could have disrupted the entire banking system. In 2010, Congress modified and extended this FDIC insurance coverage for an additional two years to expire December 31, 2012.
Because the banking system and the economic recovery remain fragile, a continuation of this FDIC insurance coverage is necessary in order to avert the risk of an abrupt dislocation of deposits for community banks. If the expanded insurance coverage is not extended, insurance coverage will revert to $250,000.00.
An important political consideration is that this insurance coverage is not a government bank bail-out and that FDIC insurance is fully paid for by banks with their deposit insurance premiums.
Congress must act to extend insurance coverage by year-end and community bankers must make their voices heard. Leaving this important issue unaddressed creates a disruptive uncertainty for community banks, small businesses and municipalities.
Please click here to urge your members of Congress to support at least a two year extension to the important TAG program.