[Congressional Record (Bound Edition), Volume 154 (2008), Part 14]
[Extensions of Remarks]
[Page 20051]
[From the U.S. Government Publishing Office, www.gpo.gov]




   THE INTRODUCTION OF THE ``INDIVIDUAL DEPOSITOR AND COMMUNITY BANK 
                        PROTECTION ACT OF 2008''

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                            HON. STEVE COHEN

                              of tennessee

                    in the house of representatives

                       Monday, September 22, 2008

  Mr. COHEN. Madam Speaker, today I introduced the ``Individual 
Depositor and Community Bank Protection Act of 2008,'' which raises the 
federal deposit insurance limit from the current $100,000 to $200,000. 
This upward adjustment in the federal deposit insurance limit is long 
overdue. The last increase in the deposit insurance limit--to the 
current $100,000--was made 28 years ago, in 1980, the year Ronald 
Reagan was first elected President. This has been the longest period in 
history in which there has been no raise in the deposit insurance 
maximum. Since 1980, our nation's economy has changed, with an 
undeniable increase in income, prices, and wealth. By failing to raise 
the deposit insurance limit in kind, Congress has effectively weakened 
the federal guarantee underlying deposit Insurance.
  Deposit insurance, established in response to the financial meltdown 
of the 1930s that led to the Great Depression, is vital to consumer 
confidence and to the stability of our nation's banking system. It also 
is an effective mechanism for ensuring that small community banks can 
maintain a competitive position vis a vis large national banks. Large 
banks are not as dependent as small ones on deposit insurance because 
they are categorized as ``too big to fail'' and will be protected by 
the federal government should they run into financial trouble. As a 
result, they have a competitive advantage in securing depositors and in 
providing loans. Small community banks enjoy no such protection and, as 
a result, depend on a robust federal deposit insurance guarantee to 
reassure consumers that their money is safe in a community bank. 
Weakening deposit insurance effectively gives a competitive upper hand 
to the ever-shrinking number of large national banks and, in the long 
run, will limit the vitality and competitiveness of our nation's 
banking industry.
  At this moment of economic crisis and deep financial uncertainty for 
millions of Americans, I urge my colleagues to support this 
straightforward and long-overdue raise in the federal insurance deposit 
limit. It is vital to maintaining our nation's financial stability, 
ensuring a solid foundation for economic growth, promoting competition 
in the banking industry, and reassuring an anxious nation.

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