WASHINGTON — A prominent Republican on the Senate Banking Committee said Wednesday he plans to oppose extending the Transaction Account Guarantee program, just days after the Senate's top Democrat proposed a two-year renewal.
Sen. Bob Corker, R-Tenn., had previously signaled concerns about the program — which provides unlimited insurance for certain non-interest-bearing checking deposits — stressing the fact that the original program was meant to be temporary. Without congressional action, the current program is set to expire at yearend.
On Wednesday, two days after Senate Majority Leader Harry Reid introduced legislation extending TAG through 2014, Corker was explicit. A press release issued by his office noted that, although community banks have been most vocal about needing a TAG extension, data indicate larger institutions benefit from the program.
"It's time to move beyond this period of unprecedented government support of the banking industry, and so I am opposed to any more extensions of this limitless guarantee program," he said in the press release.
The Federal Deposit Insurance Corp. first created TAG in 2008 to respond to liquidity concerns stemming from the financial crisis, and it was later extended until the end of this year under the 2010 Dodd-Frank Act. Community banks have warned that its expiration will lead depositors to seek other destinations to store their money.