ICBA Issues Statement on Senate Vote on Legislation to Temporarily Extend Transaction Account Guarantee

The Independent Community Bankers of America released this statement following the Senate’s procedural vote on legislation (S. 3637) to extend full Federal Deposit Insurance Corp. coverage of noninterest-bearing transaction accounts. The legislation would extend the Transaction Account Guarantee (TAG) program for two years.

“The Senate’s failure to advance legislation to extend TAG coverage of noninterest-bearing transaction accounts at this time is disappointing for Main Street community banks and the communities they serve. Not extending this critical deposit coverage due to procedural roadblocks threatens to further concentrate deposits in too-big-to-fail financial institutions and undermine the economic recovery.

“Thousands of Main Street community banks and businesses rely on the TAG program to ensure they can continue to serve their customers and communities. If Congress does not extend this critical program before its Dec. 31 deadline, approximately $1.5 trillion in TAG deposits will become uninsured overnight, with uncertain economic consequences.

“With so much uncertainty facing the nation’s economy, now is not the time to pull the plug on this important source of stability. ICBA continues calling on lawmakers to extend this much-needed deposit coverage before it’s too late.

“ICBA thanks Senate Banking Committee Chairman Tim Johnson (D-S.D.) for his tireless efforts to extend the Transaction Account Guarantee program. He is a long-time friend to the community banking industry, and ICBA appreciates his hard work. ICBA also thanks all of the senators who stood up for Main Street and supported TAG throughout the process.”