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Deposit Insurance Reform Takes a Surprising Turn

WASHINGTON-In an executive session of the Senate Banking Committee, under its budget reconciliation duties, the decision was made to significantly revise the indexing provision of the deposit insurance reform legislation. NAFCU Director of Legislative Affairs Brad Thaler said he had been unable as of deadline to get his hands on...

By Staff Writer | Updated on November 01, 2005

WASHINGTON-In an executive session of the Senate Banking Committee, under its budget reconciliation duties, the decision was made to significantly revise the indexing provision of the deposit insurance reform legislation. NAFCU Director of Legislative Affairs Brad Thaler said he had been unable as of deadline to get his hands on a copy of the Senate’s latest version of the Safe and Fair Deposit Insurance Act of 2005 (S. 1562) His understanding is that it would allow the regulators to set the indexing of the deposit insurance funds. However, until he saw the language of the bill, he was reluctant to discuss it. Thaler did point to another provision of concern to credit unions. The bill would add language to the FDIC’s logo regarding its backing by the full faith and credit of the U.S. Government, but does not include such language for NCUA. He said he is confident the matter is simply an oversight and NAFCU is working with Congress toward a resolution. CUNA Vice President and Senior Legislative Counsel Gary Kohn said CUNA did not take a position on the Senate’s bill since CUNA did not care where the level was set as long as the NCUSIF received equal treatment to the FDIC. NAFCU Associate Director of Legislative Affairs Dillon Shea acknowledged that the arrangement could lead to issues of parity, but if the FDIC-insured institutions received an increase in coverage, he said he would expect credit unions to ask the same from NCUA. However, NAFCU would prefer the coverage setting remain statutory.

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