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House Passes Deposit Insurance Reform Legislation

WASHINGTON-The House gave the green light to deposit insurance reform legislation at press time last week. The main purpose of the legislation, which was folded into the budget reconciliation process, was to merge the Bank Insurance Fund and the Savings Association Insurance Fund under the FDIC; require the FDIC and...

By Staff Writer | Updated on February 07, 2006

WASHINGTON-The House gave the green light to deposit insurance reform legislation at press time last week. The main purpose of the legislation, which was folded into the budget reconciliation process, was to merge the Bank Insurance Fund and the Savings Association Insurance Fund under the FDIC; require the FDIC and NCUA to set the insurance coverage to inflation every five years, beginning in 2010; increase the deposit insurance cap on retirement accounts to $250,000 and indexes to inflation; allows the FDIC Board to set assessments; and establishes a reserve ratio range of 1.15% to 1.50% for a given year rather than the strict 1.25% target. The bill is now heading to the White House to become law. “Deposit insurance reform has been a top priority of this Committee and the House for many years,” House Financial Services Committee Chairman Mike Oxley (R-Ohio). “Our goals remain the same now as they were when Federal deposit insurance first became law: to reassure Americans in the safety of their deposits and the banking system, and to protect taxpayers from being on the hook during times of economic crisis.”

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