Deposit Insurance Reform Continues ToMove Forward

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WASHINGTON - (12/13/05) A deposit insurance reform plan isclose to moving forward in Congress, although it lacks severalprovisions desired by the banking industry, which continues tosupport the bill. The Senate and the House passed separate versionsof the bills in November, and it is now being reconciled. Thelegislation would merge the bank (FDIC) and thrift (BIF) insurancefunds, give the FDIC more flexibility in charging premiums, andreplace the minimum ratio of reserves to insured deposits. But thebiggest issue to be resolved remains insurance coverage levels. TheSenate OK’d an increase in coverage for retirement accountsto $250,000, while leaving coverage at $100,000 on all otheraccounts. The House would raise coverage to $130,000, and $260,000on retirement accounts. There are also provisions for indexingdeposit insurance coverage to inflation.

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