Congress Set To Overhaul Deposit Insurance Plan
Congress was expected to complete work on a long-awaited deposit insurance bill last week, as lawmakers completed their work for the year.
The House passed a bill that would increase the $100,000 per account coverage for all federally insured deposits starting in the year 2010, allowing NCUA and the FDIC to index the coverage to the rate of inflation. The bill would also more than double the current coverage for retirement accounts to $250,000 each.
Also in the bill are provisions to finally merge the bank and thrift insurance funds-something that has been in the works since the s&l crisis of the 1990s.
The bill would also require the FDIC to pay insured banks and thrifts a dividend if the reserve level in the fund exceeds a certain level-something NCUA has done for years.
A similar bill was passed earlier by the Senate, but minor differences with the bill pass by the House required the Senate to vote again on the measure.
The credit union lobby has never targeted deposit reform as a major priority but always insisted that any increase in coverage provided for banks and thrifts should be matched for credit unions.