110 HR 6986 IH: Individual Depositor and Community U.S. House of Representatives 2008-09-22 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 110th CONGRESS 2d Session H. R. 6986 IN THE HOUSE OF REPRESENTATIVES September 22, 2008 Mr. Cohen introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend section 1821(a)(1) of title 12, United States Code, to raise the maximum Federal deposit insurance coverage to $200,000.

1.

Short title

This Act may be cited as the Individual Depositor and Community Bank Protection Act of 2008.

2.

Findings

(a)Deposit insurance is vital to depositor confidence and to the stable operation of the Nation’s banking system. (b)The current Federal deposit insurance limit of $100,000 was set in 1980. (c)The 28-year period since 1980 is the longest period in history without an increase in the Federal deposit insurance limit. (d)Today’s deposit insurance limit is economically inadequate as it does not reflect the steady increase in the general level of income, prices, and wealth in our Nation since the 1980 deposit insurance limit increase. (e)In 1935, when Federal deposit insurance was created, the deposit insurance coverage level was ten times per capita annual income. In 2000, it was only four times per capita income. (f)Large banks enjoy funding and deposit-gathering advantages over smaller banks because they are considered too big to fail and are protected from failure through governmental protection that is not afforded to smaller banks. (g)Community banks rely on deposit insurance to a much greater degree than large banks in ensuring depositor confidence. Therefore, a diminishment in the real protection offered by deposit insurance reduces vitality and competitiveness within the banking industry, as community banks are left at a competitive disadvantage. (h)An increase in the deposit insurance coverage limit is needed to address economic changes since 1980, to boost consumer confidence in the Nation’s banking system, and to ensure vigorous competition in the Nation’s banking industry.

3.

Increase in Deposit Insurance Coverage

Section 11(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)), is amended— (1)by striking subparagraph (E) and inserting the following new subparagraph: (E)

Standard maximum deposit insurance amount defined

For purposes of this chapter, the term standard maximum deposit insurance amount means $200,000, adjusted as provided under subparagraph (F) after March 31, 2010. ; and (2)by striking subclause (F)(i)(I) and inserting the following new subclause: (I)$200,000; and .

4.

Effective Date

The amendments made by this Act shall become effective on the date of enactment of this Act.