Poll Results: Should the TAG Program Be Extended?

Just days after the Senate's top Democrat, Harry Reid, proposed a two-year renewal to the Transaction Account Guarantee program, a leading Republican on the Senate Banking Committee came forward and said he plans to oppose the extension.

The effort to extend the Transaction Account Guarantee, which is due to expire at yearend, received a major "boost this week after Senate Majority Leader Harry Reid unveiled a bill to keep it alive for another two years," writes American Banker's Joe Adler.

Senate Majority Leader Harry Reid has sponsored a stand-alone bill to give the Transaction Account Guarantee program another two years, but its passage is not a slam dunk.

While it's unlikely Congress will enact a bill solely devoted to extending full FDIC coverage for transaction accounts, the "lame-duck" session does allow several opportunities for renewing the deposit insurance program.

If the program ends, most TAG deposits held by community banks will quickly migrate to the biggest banks as investors still expect the federal government to protect all deposits held by these financial behemoths.