Employee Paycheck and Small Business Protection Act

Key Points

• The bill would dramatically increase deposit insurance for business accounts from the current $250,000 standard to up to $100 million per depositor per institution. This covers accounts used by businesses, non-profits, and municipalities for payroll and vendor payments.
• To qualify for the expanded insurance, an account must be used mainly for regular business transactions like payroll and vendor payments and must earn little or no interest. This keeps the program focused on operating accounts rather than investment vehicles.
• The bill also creates a temporary emergency guarantee program that can fully insure all money in transaction accounts for up to 180 days during a financial crisis. Activating it requires a two-thirds vote from the FDIC board and the Federal Reserve board, plus approval from the Treasury Secretary.
• The FDIC and National Credit Union Administration must begin collecting data within 90 days of enactment and must issue final rules within 30 months. The rulemaking process must consider effects on minority depository institutions, rural banks, and community development financial institutions.
• Any existing Deposit Insurance Fund or Credit Union Share Insurance Fund restoration plan gets extended by 8 years once the final rules take effect. This gives the insurance funds more time to absorb the cost of covering much larger amounts of deposits.