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.

The failures of several midsize banks last year demonstrated shortcomings in the deposit insurance framework and lit a fire among policymakers to take it on. But for some reason that fire went out.

The FDIC launched a campaign Wednesday to educate the public about the importance of deposit insurance, a move designed to counter lingering concerns arising from this spring's bank failures and the resurgence of imitation banks.

Federal Deposit Insurance Corp. Chairman Martin Gruenberg said despite earlier proposals for reforming deposit insurance following this spring's bank failures, congressional interest in major reforms has waned and prospects for legislative changes are dim.

The private equity firm GTCR's large investment in R&T Deposit Solutions is a sign of the windfall reciprocal deposit networks are reaping after the bank runs this spring that was driven by customers with large, mostly uninsured deposits.

The Federal Deposit Insurance Corp. issued a cease-and-desist order to Unbanked, Inc. — a cryptocurrency-focused nonbank — for making false claims about FDIC deposit insurance coverage on its crypto-related products Friday.

Sen. Elizabeth Warren, D-Mass., and Rep. Katie Porter, D-Calif., said that the Federal Deposit Insurance Corp. could do more to penalize banks that have downwardly revised their uninsured deposits as the agency looks to collect its special assessment.

Dream First Bank of Syracuse, Kan. is assuming all deposits and most of the assets of Heartland Tri-State Bank of Elkhart, Kan. following a purchase and assumption agreement with the Federal Deposit Insurance Corp., representing a $54.2 million hit to the Deposit Insurance Fund.

Both Senate Banking Committee Chairman Sherrod Brown, D-Ohio, and ranking member Tim Scott, R-S.C., said they would consider what reforms "if any" are necessary post Silicon Valley Bank failure.

The Federal Deposit Insurance Corp. board voted 3-2 to propose a special assessment of 0.125% on banks with uninsured deposits over $5 billion.

The FDIC's recent proposal to provide business accounts targeted deposit insurance coverage up to ten times the current rate is gaining traction among industry experts. But a great deal rests on the details, and any reform will probably have to wait until after 2024.