Sponsor
Maxine Waters
Representative · D-CA
Representative · D-CA
The bill sharply boosts temporary protection for large transaction-account balances to prevent payment disruptions and stabilize markets, but does so at the cost of increased strain on deposit insurance funds, heightened moral hazard, potential higher costs for banks and customers, and added administrative and political uncertainties.
Small businesses, nonprofits, municipalities, and depositors would have large transaction-account balances temporarily protected (up to $100M per institution and fully insured for up to 180 days), reducing the risk of missed payrolls and vendor payments if an institution fails.
Depositors and the broader financial system would face reduced run and contagion risk because temporary full guarantees encourage deposit stability during acute stress, helping stabilize markets and protect credit availability.
Taxpayers and the public would gain more transparency and accountability because the agencies must collect data, publish reports, provide GAO review, and deliver expedited congressional testimony about the Program and its costs.
Taxpayers and the Deposit Insurance Fund could face substantial increased exposure because very large temporary coverage risks depleting the Fund or necessitating higher assessments on banks and credit unions.
Financial institutions, depositors, and taxpayers could face moral hazard because high or ad hoc guarantees encourage concentration of large balances and risk-taking by depositors and banks expecting government backstops.
Middle-class customers and small businesses could see higher fees or reduced lending if banks pass on increased assessment costs or constrain credit to rebuild the insurance fund.
Based on analysis of 3 sections of legislative text.
Creates temporary federal programs to fully insure business/nonprofit/municipal transaction accounts up to $100M per depositor for limited periods, subject to interagency approval.
Creates a temporary federal program to fully insure "covered transaction accounts" held by businesses, nonprofits, and municipalities up to $100,000,000 per depositor at an insured bank or credit union. The guarantee is implemented by rule and is limited to participating, solvent institutions for a single period of up to 180 days (with one possible 90‑day extension) and can be funded by the Deposit Insurance Fund and assessments on participating institutions. Requires interagency approvals and a Treasury determination that failing to act would threaten financial stability before the FDIC/NCUA may implement the program, and adds reporting, testimony, and GAO review requirements tied to any implementation.
Official title: To amend the Federal Deposit Insurance Act and the Federal Credit Union Act to authorize a temporary transaction account guarantee program, expand deposit and share insurance to cover business payment accounts, and for other purposes.
Introduced July 21, 2025 by Maxine Waters · Last progress July 21, 2025