WASHINGTON - Sen. Tim Johnson, D-S.D., has introduced a bill that would double deposit insurance coverage to $200,000 per account.
The "Meeting America's Investment Needs in Small Towns Act," S 128, introduced Jan. 23, would index coverage to 1980 when the limit on insured deposits rose from $40,000 to $100,000. Afterwards, deposit insurance would be indexed every three years to the consumer price index to keep up with inflation.
A spokesman for Sen. Johnson said the bill should help increase deposits at rural community banks since rural consumers often have only one bank in their area.
The bill, referred to the Senate Banking Committee where Sen. Johnson is a member, has six co-sponsors including fellow committee member Sen. Chuck Hagel, R-Neb.
Sen. Johnson introduced similar legislation last session but it never made it out of the banking committee.
