Sponsors (2)
The bill substantially expands deposit insurance protections (reducing depositor loss risk and equalizing coverage across banks and credit unions) but raises the likelihood of higher costs for taxpayers and customers and creates moral-hazard and implementation burdens during a multi-year transition.
Middle-class families and businesses with large noninterest-bearing transaction accounts would receive up to $10 million in additional deposit insurance coverage, reducing the risk they lose funds or experience payment interruptions if their bank fails.
Credit union members would get comparable temporary and conforming coverage for noninterest-bearing transaction accounts, creating parity between banks and credit unions.
A phased-in valuation approach and 10-year implementation plan gives the FDIC and NCUA time to adjust reserve calculations, which can reduce the chance of sudden assessment shocks for institutions and taxpayers during the transition.
Taxpayers and bank customers could face higher costs if insurance funds raise assessments to cover expanded insurance or if funding shifts during transition, potentially increasing fees or taxpayer exposure to bank failures.
Allowing aggregate insurance across subsidiaries could enable wealthy depositors to consolidate protected balances within a holding company, weakening uninsured-loss discipline and increasing moral hazard.
Smaller banks and credit unions may face additional compliance and administrative costs to implement new definitions, reporting, and phased rules during the 10-year transition, squeezing margins or passing costs to customers.
Based on analysis of 2 sections of legislative text.
Creates up to $10M of additional federal insurance for qualifying noninterest-bearing transaction accounts, defines those accounts, extends similar credit-union coverage, and provides transitional relief for small banks.
Official title: Amend the Federal Deposit Insurance Act to provide deposit insurance for noninterest-bearing transaction accounts, and for other purposes.
Introduced October 9, 2025 by William Francis Hagerty · Last progress October 9, 2025
Creates a new, separate federal insurance boost for noninterest-bearing transaction accounts by adding up to $10 million in aggregate coverage on top of the standard FDIC insurance limit for eligible accounts at a single depository institution (including aggregation across subsidiaries of a holding company). Defines what counts as a “noninterest-bearing transaction account,” extends similar temporary coverage to insured credit unions, and provides transitional assessment relief for smaller banks while limiting use of certain FDIC special assessment authorities to offset the change.