Following the Federal Open Market Committee’s vote to implement new quantitative easing efforts, ICBA said Congress must also act to extend full FDIC coverage of noninterest-bearing transaction accounts. In a statement, ICBA Chief Economist Paul Merski said that allowing the Transaction Account Guarantee program to expire would immediately transform $1.4 trillion in risk-free deposits to a risk asset.

“The Fed has pumped trillions of dollars of liquidity into the economy since the financial crisis, and Congress is rolling the dice if it does not promptly extend FDIC TAG insurance coverage,” Merski said. “Nearly $1.4 trillion in TAG deposits would become abruptly uninsured overnight on Dec. 31. Allowing TAG insurance, which is fully paid for by banks, to expire would create unnecessary risks on small business depositors and commercial banks alike.”

ICBA’s statement followed the Federal Open Market Committee announcement that it would launch a third round of quantitative easing to purchase $40 billion of agency mortgage-backed securities each month. The Fed also will maintain its Operation Twist program of swapping short-term securities for longer-term ones. Additionally, the agency said it will keep target interest rates at zero to 0.25 percent “at least through mid-2015,” beyond its previous pledge to maintain record-low rates through late-2014. Read ICBA Release.

The Securities and Exchange Commission should clarify that thrift and bank holding companies benefit from new laws easing reporting requirements on smaller institutions, ICBA told Congress. The JOBS Act, which passed earlier this year, raised the SEC registration threshold from 500 to 2,000 shareholders and the deregistration threshold from 300 to 1,200.

However, ICBA noted in a statement to Congress, thrift holding companies were left out of the legislation due to a drafting oversight. While the banking agencies have so far interpreted the deregistration provisions of the JOBS Act to cover thrifts, the SEC still has not clarified whether thrift holding companies are covered. ICBA wrote that there is no policy reason for denying thrift holding companies, which are subject to the same oversight and regulation, the benefits of the higher thresholds.

Additionally, ICBA expressed concern that bank holding companies must continue to file periodic Exchange Act reports for 90 days after they have deregistered. The association told Congress that the SEC should issue an amendment as soon as possible to reflect the new deregistration threshold and end the reporting burden.

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