Sen. Lauch Faircloth introduced legislation Tuesday that would give the banking industry rebates on federal deposit insurance.

Under the bill, the Federal Deposit Insurance Corp. would have to refund money to the industry anytime the Bank Insurance Fund holds more than $1.50 for every $100 of insured deposits.

Only the amount above this 1.5% reserve ratio would be rebated, and healthy banks still would not pay premiums as long as the fund meets the mandatory 1.25% threshold.

"Letting this money accumulate in Washington will not create new opportunities for the American people," the North Carolina Republican said. "It would be put to greater use if these funds were recycled back into the banking system and back into our economy."

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