Main Street Depositor Protection Act

Key Points

• Congress is considering a plan to increase insurance for certain bank accounts from the usual $250,000 limit up to $10 million. This change specifically targets checking accounts that do not earn interest, which are often used by businesses to manage their daily cash.
• This policy is designed to help small businesses, nonprofits, and local governments that keep large amounts of money in the bank to pay employees and bills. If a bank fails, these depositors would be protected for up to $10 million instead of losing everything over the current $250,000 limit.
• The higher insurance would only be available at smaller and mid-sized banks. The nation's largest 'too big to fail' banks are excluded from this program to encourage people and businesses to keep their money in local and regional financial institutions.
• Smaller banks with $10 billion or less in total assets would be exempt from certain fees usually required to fund this insurance during a transition period. This helps local banks offer the extra protection without facing immediate high costs.
• If the bill sponsored by Mr. Hagerty becomes law, the government would have one year to create a plan to phase in these changes over a 10-year period. This slow rollout is meant to ensure the national insurance funds for banks and credit unions remain stable.