ICBA told Congress that raising deposit insurance limits will bolster depositor confidence in community banks.
Details: In a statement for the record ahead of today’s House Financial Services Committee hearing on deposit insurance reform, ICBA and 25 state affiliates said permanent solutions to deposit insurance reform will proactively bolster the safety of our nation’s financial system.
Supported Legislation: ICBA and the state groups said they support several deposit insurance reform bills currently before Congress, including:
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The Community Bank Deposit Access Act of 2025 (H.R. 5317), which would allow custodial deposits to be held by community banks without being considered brokered deposits, provided the custodial deposits do not exceed 20% of banks’ total liabilities.
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The Keeping Deposits Local Act (H.R. 3234), which would raise the percentage threshold of reciprocal deposits that may be held by a bank without being considered brokered deposits, which are subject to certain capital and interest-rate restrictions.
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The Main Street Depositor Protection Act (S. 2999), bipartisan legislation to provide increased insurance coverage for small-business customers while minimizing additional costs for community banks.
Principles for Reform: In recently released principles for deposit insurance reform, ICBA encourages lawmakers to:
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Promote depositor confidence in community banks.
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Curb too big to fail.
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Control the cost of deposit insurance for community banks.
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Provide increased coverage for uninsured deposits.
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Expand the FDIC’s ability to protect community banks and their customers during crisis.
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Protect the bank-funded DIF for bank resolutions.
Blog Post: In a recent blog post, ICBA President and CEO Rebeca Romero Rainey said the large bank failures of 2023 demonstrated the clear need to reform the nation’s deposit insurance system and bipartisan legislation has provided a good starting point for these discussions.
Treasury Support: Treasury Secretary Scott Bessent recently indicated support for congressional efforts to modernize deposit insurance, saying he was “encouraged to see emerging bipartisan support for increasing FDIC insurance limits on noninterest-bearing transaction accounts.” Bessent this month said S. 2999 would fortify community banks against existential headwinds by raising the FDIC limit.
More Advocacy: ICBA in September called on Congress to consider deposit insurance reforms in a statement for the record for a Senate Banking Committee hearing.