Dedicated to Deposits: Deals, Data, and Discussion

Permanent Increase in Deposit Insurance Limit Didn't Make It Into Financial Reform Bill


It looks like we'll have to wait some more for the $250K coverage limit to be made permanent. According to the CUNA News Now

A permanent increase in the deposit insurance limit is likely on the backburner, said American Banker (May 26). Some lawmakers hoped to address the limit--temporarily at $250,000 per account until 2013--in the regulatory reform bill the Senate passed May 20. [...] Sen. Ben Cardin (D-Md.) had introduced an amendment in the regulatory reform bill to make the increase permanent, but it failed. Some observers say the increase will be added by those working on the House and Senate reform bills.

It would be interesting to know why it failed and who didn't back it. Was it just due to the fact that there are several years before the temporary increase ends? Or are some politicians against making it permanent? As many readers have mentioned, even though it won't end for over 3.5 years, it does affect depositors today who are deciding about how much to put into long-term CDs.

Unfortunately, the legislation database at didn't have any info on this (at least not any I could find).

This amendment to make the $250K coverage limit permanent was first mentioned in an AP article a couple of weeks ago. I reported on it in this May 16th blog post.

Just over a year ago the President signed into law the deposit insurance change which extended the $250K standard coverage limit to December 31, 2013. According to the FDIC:

On January 1, 2014, the standard coverage limit will return to $100,000 for all deposit categories except Certain Retirement Accounts (includes IRAs), which will continue to be insured up to $250,000 per owner.

Hat tip to the reader Cactus who mentioned this CUNA news story in the Open Discussion Thread.

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