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A bill to amend the Federal Deposit Insurance Act to address transaction account guarantees, and for other purposes.
2/7/2024, 9:23 AM
Summary of Bill S 1572
The bill aims to provide additional protection for funds held in transaction accounts, which are typically used for everyday expenses and transactions. By amending the Federal Deposit Insurance Act, the bill seeks to ensure that these funds are safeguarded in the event of a financial institution failure.
In addition to enhancing transaction account guarantees, the bill also includes provisions for other purposes. These may include measures to strengthen the stability of the banking system, improve consumer confidence in financial institutions, and promote economic growth. Overall, Bill 118 s 1572 is designed to address the specific needs and concerns related to transaction accounts and provide greater security for individuals and businesses who rely on these accounts for their day-to-day financial activities.
Congressional Summary of S 1572
Depositor Protection Act of 2023
This bill expands Federal Deposit Insurance Corporation (FDIC) protections and the actions the FDIC is allowed to take, including in the event of an institutional failure.
First, the bill expands for two years FDIC deposit insurance for an amount up to $100,000,000 that a depositor maintains at an insured depository institution in a noninterest-bearing transaction account. (Currently, the FDIC insures deposits up to $250,000.)
The bill also increases the reciprocal deposit limit applicable to depository institutions. (Reciprocal deposits are used by institutions to increase the availability of deposit insurance by splitting large deposits using a reciprocal network of institutions.)
For 90 days after the date of enactment, the bill allows for the acquisition of distressed banks by a bank holding company without regulatory approval under certain circumstances.
The bill also allows the FDIC to facilitate a merger, sale, assumption of liabilities, or stock acquisition involving the failure of a large institution using an adjusted least-cost resolution calculation.
