Sponsors
The bill trades a short-term expansion of deposit protections that shields businesses, nonprofits, and households and stabilizes markets during stress against higher costs, moral hazard, market distortions, administrative complexity, and potential taxpayer exposure.
Small businesses, nonprofits, municipalities, and individual depositors would have expanded temporary full insurance on transaction account balances (up to very large amounts and for up to 180 days), protecting payrolls, vendor payments, and large operating balances if an insured institution fails.
Depositors and markets would face less immediate loss risk and lower likelihood of deposit flight during acute stress, helping stabilize financial markets and reduce contagion in times of bank runs or systemic stress.
Program costs can be assessed to participating institutions and drawn from the Deposit Insurance Fund, concentrating near-term costs on industry participants rather than requiring immediate general-budget outlays.
Insuring very large transaction balances and using the Deposit Insurance Fund or assessments could materially raise costs to the Deposit Insurance Fund and participating institutions, leading to higher bank/credit-union assessments, higher fees or constrained lending for customers, and potential indirect taxpayer exposure if the Fund is depleted.
Extending very high or temporary full coverage creates moral hazard: depositors and institutions may concentrate balances or take greater risks expecting ad hoc backstops, increasing systemic risk over time.
Defining covered accounts as non‑interest or low‑interest and other eligibility rules could incentivize shifting deposits into covered account types, distorting customer behavior and market competition.
Based on analysis of 3 sections of legislative text.
Creates temporary FDIC/NCUA programs to fully insure business, nonprofit, and municipal transaction accounts up to $100 million with 180‑day coverage and strict interagency approval triggers.
Creates temporary programs at the FDIC and NCUA to fully insure certain business, nonprofit, and municipal transaction accounts up to $100,000,000 per depositor per institution and to exclude those insured amounts from the normal aggregation/net-amount calculation. The guarantee is available only when the agencies adopt final rules and when high-level interagency approvals and a Treasury determination find that failing to act would threaten financial stability; coverage is limited to a single 180-day period (with one possible 90-day extension) and insolvent institutions are ineligible.
Introduced July 21, 2025 by Maxine Waters · Last progress July 21, 2025