Rep. Adam Schiff, D-Calif., has introduced H.R. 3928 which would increase the level of insurance for commercial deposits at banks and credit unions. Those institutions would be required to pay higher assessments in exchange for that increase in insurance.
The FDIC has recommended that the deposit insurance system be changed to increase the insurance level for transaction accounts. The current deposit insurance system may not be working well for accounts whose balances fluctuate frequently based on receipts, payments, payroll, and other transactions.
CUNA issued a letter requesting that if Congress increases the deposit insurance for banks insured by the FDIC, it should do the same for credit unions insured by the NCUA. Members with accounts for their small and medium sized businesses that more frequently reach out to their community credit union for lending. These member businesses enjoy the service and stability of doing business with credit unions without added costs. The traditional model of fixed deposit insurance may not be the best way to insure such accounts currently under review by the agency as a result of recent bank failures.
House Financial Services Chairman Patrick McHenry (R-NC) and House Republican have repeatedly expressed skepticism at about the need for increased insured account levels and action on this bill is unlikely at this point, but MnCUN staff will monitor any developments.
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