Main Street Depositor Protection Act

Key Points

• This bill would raise the FDIC insurance limit for noninterest-bearing transaction accounts (like business checking accounts that don't earn interest) to as much as $5 million, up from the current $250,000 standard limit. The FDIC would set the exact amount through rulemaking.
• The higher insurance coverage would only apply at community banks and credit unions. The nation's largest "too big to fail" banks (global systemically important bank holding companies) and insured branches of foreign banks are specifically excluded from offering this expanded coverage.
• Small banks with $10 billion or less in total assets would be shielded from paying special assessments or increased fees to cover the expanded insurance during the transition period, helping keep costs manageable for community institutions.
• The FDIC must set the new insurance limit within 6 months of enactment. After that, the expanded insured deposits would be gradually phased into the Deposit Insurance Fund calculations over a 10-year transition period.
• Once the FDIC sets the insurance limit by rule, it cannot be changed again without an Act of Congress. This locks in the coverage level and prevents future regulators from quietly rolling it back.
• The bill has bipartisan support, introduced by Senators from both parties. Credit unions would receive the same expanded insurance coverage as banks, with the National Credit Union Administration following the same limit the FDIC sets.