Deposit insurance reform bill breezes through U.S. House

Northwestern Financial Review, May 1-May 14, 2003

The U.S. House passed deposit insurance reform legislation by a vote of 411-11. Reform as law, however, could be long off Industry analysts predict a rougher road for a similar bill in the Senate. The House bill, sponsored by Rep. Spencer Bachus (R-Ala.), would raise the insurance coverage for individual accounts to $130,000, a provision opposed by Federal Reserve Board Chairman Alan Greenspan and others.

The bill would merge the Bank Insurance Fund and the Savings Association Insurance Fund, give the FDIC more flexibility in establishing a reserve ratio for deposit insurance premiums and double the insurance coverage for retirement accounts.