Federal Deposit and Share Insurance: Proposals for Change (CRS Report for Congress)
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| Release Date |
Revised Feb. 4, 2009 |
| Report Number |
RS20724 |
| Report Type |
Report |
| Authors |
Walter W. Eubanks, Specialist in Financial Economics |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
In the 109th Congress, the Federal Deposit Insurance Reform Act of 2005 and theFederal Deposit Insurance Conforming Amendments Act of 2005, P.L. 109-173 (119 Stat. 3601),were enacted on February 15, 2006. Collectively, these laws are referred to as the Reform Act of2005. In the 110th Congress, the FDIC has been implementing the provisions of the Act. The Actsets the maximum deposit insurance coverage and sets up adjustments that authorize increasingcoverage limits for inflation every five years. However, due to current financial crisis andevidence of public lack of confidence in the financial system, the Emergency EconomicStabilization Act (EESA) of 2008, increased the standard deposit insurance coverage from$100,000 to $250,000 and maintained retirement accounts' insurance coverage at $250,000. OnDecember 17, 2008, because of rising bank failures, the FDIC board of directors approved thefinal rule for implementing a restoration plan to restore the designated reserve ratio to itsminimum level by increasing assessments as mandated by the Reform Act of 2005. The proposedrules will take effect on January 1, 2009. On January 27, 2009, the Chairman of the FinancialServices Committee, Representative Barney Frank, introduced a bill entitled "Promoting BankLiquidity and Lending Through Deposit Insurance, Hope for Homeowners Program," and OtherEnhancements Act (H.R. 703). The bill would permanently increase the per account depositinsurance coverage to $250,000 as well as increase the FDIC's borrowing authority from the U.S.Treasury from $30 billion to $100 billion by amending the Federal Deposit Insurance Reform Actand the Emergency Economic Stabilization Act.
