Deposit insurance

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.