Big Banks Push Back On FDIC Bill Raising Deposit Cap To $10M

Benzinga

Treasury Secretary Scott Bessent and Sen. Elizabeth Warren are backing a Senate bill to raise the FDIC insured deposit cap from $250,000 to up to $10 million for business accounts. The proposal aims to stabilize midsize and community banks after past crises, though large banks oppose it over higher insurance costs.

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00:00It's Benzinga bringing Wall Street to Main Street.

00:02Treasury Secretary Scott Besson and Senator Elizabeth Warren

00:05foregoing to elect the Alliance to back a Senate bill,

00:07according to The Wall Street Journal.

00:08The legislation would raise the Federal Deposit Insurance Corporation's

00:11insured deposit cap for $250,000 to as much as $10 million

00:15for certain business accounts.

00:17Opposed will aim to protect mid-sized banks from rapid deposit flight

00:20during crises like the 2023 collapses of Silicon Valley Bank and Signature Bank.

00:25Large banks, which fund most of the FDIC insurance pool,

00:27oppose the change,

00:29arguing it would sharply increase their costs.

00:31Besson said the goal is to level the playing field for smaller banks

00:34that lost deposits to larger institutions seen as too big to fail.

00:38During the 2023 banking crisis,

00:40regional and community banks lost deposits to larger institutions,

00:43contributing to a 45% decline in U.S. community banks since 2010.

00:47For all things money, visit Benzinga.com.

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