Sponsors (7)
The bill increases protection and clarity for depositors by expanding and aggregating insurance coverage and phases in changes to reduce immediate strain on small institutions, but it raises the cost risk to the deposit insurance fund, could create moral hazard and systemic concentration, and limits regulators' ability to adjust the rule without new legislation.
Many depositors — including middle-class households and small-business owners — would get expanded federal insurance for noninterest-bearing transaction accounts and clearer coverage by aggregating balances across bank holding company subsidiaries, reducing their risk of loss if a bank fails.
Smaller banks and credit unions (assets ≤ $10B) would be exempt from special transitional assessments, lowering near-term cost pressures on community and regional financial institutions.
A 10-year phased-in implementation gives regulators and financial institutions time to adjust reserve calculations and funding, reducing immediate disruption and allowing a smoother transition.
Expanding deposit insurance coverage increases potential costs to the deposit insurance funds, which could lead to higher assessments on banks or greater taxpayer exposure if reserves prove inadequate.
Raising the insured amount could create moral hazard by encouraging large uninsured deposits to migrate into noninterest-bearing accounts, increasing systemic risk and concentration in certain account types.
Freezing the FDIC's rule so it cannot be changed except by Act of Congress limits regulators' flexibility to respond to future financial risks or adjust policy as conditions evolve.
Based on analysis of 2 sections of legislative text.
Requires the FDIC to insure aggregate balances in noninterest-bearing transaction accounts up to a maximum it will set by rule, with the amount locked unless Congress changes it.
Introduced March 25, 2026 by William Francis Hagerty · Last progress March 25, 2026
Creates a separate FDIC insurance rule for noninterest-bearing transaction accounts and requires the FDIC to set a maximum insured amount for the aggregate balance a depositor holds in such accounts at a single insured institution. The FDIC must issue that rule within 6 months of enactment, and once the Corporation sets the insurance amount it cannot be changed or repealed except by an Act of Congress. Defines what counts as a “noninterest-bearing transaction account,” requires aggregated treatment of balances at subsidiaries of the same banking holding company, and temporarily shields smaller depository institutions (those with $10 billion or less in total assets) from certain special assessments or assessment increases tied solely to extending insurance to these accounts during the transition period.