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House Financial Services Committee holds wide‑ranging hearing on deposit insurance reforms
Summary
Witnesses and members debated proposals ranging from a temporary eTAG guarantee to permanent increases in FDIC coverage (including a Senate discussion of a $10 million cap), highlighting data gaps in FDIC reporting, cost and moral‑hazard trade‑offs, and differing impacts on community banks.
The House Financial Services Committee on Nov. 21 convened a full‑committee hearing titled “The Future of Deposit Insurance, Exploring the Coverage, Costs, and Depositor Confidence,” where members and a panel of industry and policy witnesses tested proposals to modernize the U.S. deposit insurance framework.
Chairman Hill opened the hearing by framing the central questions: what problem are reforms meant to solve, who benefits, who pays, and whether enough data exists to evaluate trade‑offs. He urged an approach that preserves system stability, depositor confidence and market discipline while minimizing moral hazard.
Ranking Member Waters used her opening statement to spotlight her bill — the Employ Paycheck and Small Business Protection Act (HR 4451) — and argued for a data‑driven expansion of coverage for business payment accounts and a temporary transaction‑account guarantee during emergencies. “My bill takes a data driven approach to increase the deposit insurance limit for business payment accounts,” Waters said, urging bipartisan work on the issue.
Witnesses offered sharply different views. Jim Ryan, chairman and CEO of Old National Bancorp, argued that deposit insurance has not kept pace with modern banking…
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