[Congressional Record Volume 152, Number 11 (Thursday, February 2, 2006)]
[Senate]
[Page S507]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 FEDERAL DEPOSIT INSURANCE CORPORATION

  Mr. JOHNSON. Mr. President, last year, I joined with Senators Enzi, 
Hagel and Allard to introduce S. 1562, the Safe and Fair Deposit 
Insurance Act of 2005, legislation to overhaul and reform this 
country's deposit insurance system. I also wish to thank Senator Ben 
Nelson for joining us as a cosponsor.
  I have been closely tied to deposit insurance reform for many years, 
and I am pleased to see that my strong commitment to this issue will 
result in the enactment of critical reforms that will provide tangible 
benefits to financial institutions and their customers. Many of my 
colleagues on the Banking Committee will recall when I first introduced 
the Main Street Act back in 2000. We have come a long way since then. 
The legislation that is now making its way to President Bush's desk is 
the result of many years of debate and careful deliberation, and has 
garnered strong bipartisan support along the way.
  The enactment of this legislation will mark a notable milestone in 
the history of banking and financial services in this country. Deposit 
insurance is one of the cornerstones of our country's financial system, 
and it is especially critical to our Nation's smaller financial 
institutions and community banks.
  I am pleased that we are giving the Federal Deposit Insurance 
Corporation and the National Credit Union Administration the requisite 
tools to appropriately operate and manage the newly merged deposit 
insurance fund and assess premiums based on the risks that institutions 
pose to the system. These reforms were long overdue. It is imperative 
that the framework of deposit insurance that was established to promote 
the stability and soundness of our banking system not fall victim to 
the political process or become static but rather be appropriately 
reformed and dynamic enough to keep pace with the evolution of that 
system.
  The key reforms embodied in the legislation will promote depositor 
confidence by ensuring that depositors' hard-earned money, from the 
funds that cover daily living expenses to funds they are saving for 
retirement and a rainy day, will continue to be insured against risks 
over which they have no control.
  By merging the bank insurance fund with the savings association 
insurance fund, we create a stronger and more diversified fund, and 
eliminate the possibility for disparities in premiums between banks and 
thrifts. Implementing a system of risk-based insurance premiums will 
ensure that banks pay based on the risk they pose to the system, and 
the FDIC will be able to price insurance premiums accordingly. By 
increasing the level of coverage for retirement accounts to $250,000, 
we are adjusting for the real value of coverage, and will promote 
financial stability for individual retirees. In the current 
environment, with the uncertainty surrounding Social Security and 
pension benefits, it is critical that we provide appropriate coverage 
for the hard-working Americans who have saved for their retirement and 
long-term needs.
  I would again like to recognize the banking community in South Dakota 
for the invaluable and critical role they have played in this process 
over the past 5 years. I truly appreciate the input and recommendations 
that I have received from the industry overall. I would also like to 
thank Chairman Shelby, and Ranking Member Sarbanes for their 
leadership, Senators Enzi, Hagel and Allard for the many hours of hard 
work, and former FDIC Chairman Don Powell for his commitment to deposit 
insurance reform and tremendous leadership.

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