Deposit insurance

When Congress returns from its recess in 2026, a number of financial legislative issues will be teed up, including crypto market structure, deposit insurance and supervisory disputes.

The Federal Deposit Insurance Corp. issued a proposal setting application criteria for banks to issue stablecoins and sets a strict timeline under which banks may have their applications reviewed. The agency also reduced deposit insurance assessments for banks and slashed its 2026 proposed budget at a board meeting Tuesday morning.

The Federal Deposit Insurance Corp. said in its Quarterly Banking Profile report for the third quarter that bank earnings hit 2025 highs as falling provision costs, wider margins and steady credit quality lifted industry profitability.

House Financial Services Committee Chair French Hill, R-Ark., said he wants to consider a range of ideas on how to improve deposit insurance and other issues facing community banks beyond a Senate bill raising insurance for business accounts.

Witnesses and lawmakers at a House Financial Services Committee hearing gave a more downcast view of a Senate deposit insurance reform proposal, with many House committee members expressing cost concerns.

The government shutdown is over, and Congress gets back to its regular business. For banks, the biggest-ticket issues are ongoing deliberations on raising deposit insurance and shaping a crypto market structure bill.

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.

Consumer Financial Protection Bureau Director Rohit Chopra said it is "fundamentally unfair" that uninsured depositors at Silicon Valley Bank and Signature Bank got a reprieve from regulators while those at First National Bank of Lindsay did not.

The Federal Deposit Insurance Corp. projected its Deposit Insurance Fund reserve ratio is expected to reach the statutory minimum of 1.35% by 2026 thanks to slower-than-expected insured deposit growth and a $7.5 billion increase in the DIF balance.

Citing "moral hazard" as the reason for denying full federal deposit insurance betrays a completely unrealistic belief in the ability of everyday depositors to gauge a bank's strength.

Judge Martin Glenn of the Federal Bankruptcy Court of the Southern District of New York greenlighted SVB Financial's bankruptcy plan Monday, but $1.93 billion in FDIC-held deposits remain contested pending further litigation.