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Financial Services committee to review FDIC coverage, TAG program and deposit-insurance design
Summary
Chairman French Hill said the committee will examine whether the $250,000 FDIC coverage should be raised, whether to reauthorize the TAG program, and whether Congress should conduct a study of deposit insurance to assess moral-hazard risks and bank competitiveness.
Congressman French Hill said the House Financial Services Committee will examine deposit insurance, including whether the FDIC limit of $250,000 should be raised and whether to reauthorize an emergency "TAG" program that guarantees transaction deposits during systemic stress.
"Over the last couple of years, Congress has had some hearings on deposit insurance about... should the $250,000 level be raised," Hill said. He added that the TAG program (an emergency program to guarantee transaction deposits in the face of a systemic problem) has expired and that Congress should reconsider reauthorizing it.
Hill said any change should be data-driven. "I think we ought to study, make sure we have the numbers, make sure we know the unintended consequences of any aspect of change of the deposit insurance system," he said, warning about moral hazard and the need to preserve competitiveness across banks of different sizes.
The committee did not announce immediate legislative changes in the interview; Hill described a deliberate approach prioritizing study and analysis before altering deposit-insurance policy.
