Deposit insurance

There are plenty of ways that lawmakers could help community bankers. Raising federal deposit insurance limits by a factor of 40 isn't one of them.

Sen. John Kennedy, R-La., asked acting Federal Deposit Insurance Corp. Chair Travis Hill, who has been tapped to lead the agency permanently by President Trump, for a report within 30 days about progress made in the agency's sexual harassment scandal, saying his vote is contingent on that report.

Community banks and state banking groups are seeking structural reforms rather than a simple coverage increase.

An updated deposit insurance reform bill from Sens. Bill Hagerty, R-Tenn., and Angela Alsobrooks, D-Md., would raise deposit insurance for business accounts to $10 million, exclude the largest banks from coverage and insulate community banks from footing the bill.

At a hearing on deposit insurance reform, Republican lawmakers concluded that only the largest banks would oppose a proposal to raise insurance for business accounts to $20 million.

Opposition is building against a bipartisan bill that would raise deposit insurance for business accounts, with increased deposit insurance premiums a chief concern.

A bipartisan amendment from Sens. Bill Hagerty, R-Tenn., and Angela Alsobrooks, D-Md., would expand deposit insurance for business accounts, but the industry is split on who should bear higher FDIC premium costs.

The House Financial Services Committee passed a number of bipartisan banking bills with wide margins, suggesting a growing consensus on how to handle issues like deposit insurance, de novo bank formation and the Federal Reserve's discount window.

As the Federal Deposit Insurance Corp.'s Deposit Insurance Fund inches toward replenishment, acting Chair Travis Hill suggested that banks should be assessed on a range of metrics rather than insured deposits alone.

The proposal has similar elements to Republican-led legislation, including a piece of a measure from Vice President-elect JD Vance.