Amends the Federal Deposit Insurance Act (FDIA) and the Federal Credit Union Act (FCUA) to: (1) increase deposit insurance coverage permanently to $250,000; and (2) increase the borrowing authority of the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA).
Amends the FDIA to: (1) extend to eight years the time period applicable to a Deposit Insurance Fund (DIF) restoration plan; and (2) revise requirements for special assessments to recover the loss to the DIF arising from actions taken to contain systemic risk with respect to certain insured depository institutions.
From the bill it appears the increase would be permanent. I don't know where 2013 came from. But the AFP isn't the only place that mentions a temporary extension. This American Bankers Association (ABA) statement also mentions that this extension is temporary. If you can find more details of this bill, please leave a comment.
Update: A reader found the latest version of the bill here. It does extend the $250K coverage limit to December 31, 2013.
The bill now goes to the House. It seems likely that the bill will become law. It had strong support in the Senate passing 91 to 5, and the ABA is for it.
History of the FDIC's $250,000 deposit insurance limit
This is now the fourth bill to contain this FDIC coverage limit change. I first reported on H.R. 384 in January which like this current bill, the FDIC coverage change was part of a much larger bill. Then in March I reported on H.R. 786 which was a bill just for the FDIC coverage limit change. In late April, the measure was buried deep inside another bill, H.R. 1106, which primarily dealt with mortgages.
The insurance limit change started in late September and early October 2008 after the first bailout bill failed to pass the House. A new version of the bill was written, and it included a temporary increase to the basic FDIC and NCUA deposit insurance from $100,000 to $250,000. This revised bailout bill passed Congress and was signed by President Bush on October 3, 2008. The deposit increase is only temporary, and is scheduled to end on December 31, 2009.
Before this $250K coverage took effect, it was possible extend insurance coverage way above $100K through revocable trust accounts. However, it's not as straightforward as staying under the basic limit. There's always the worry that a FDIC claims agent will find something wrong with how the revocable trusts are done which would reduce the coverage. When you're under the basic limit (currently $250K), there's much less doubt. To review some of these issues, refer to my post on extending FDIC/NCUA coverage.
To review the latest FDIC and NCUA rules for deposit insurance, please refer to my FDIC and NCUA deposit insurance post.