Congressman Cohen Welcomes Bipartisan Support for Increase in FDIC Insurance Coverage
Washington, DC – Congressman Steve Cohen (TN-09) today welcomed Sen. Barack Obama's call to increase the Federal Depositors Insurance Corporation (FDIC) insurance limits from $100,000 to $250,000 and urged his House colleagues to support it.
On September 22, Congressman Cohen introduced H.R. H. R. 6986, which would amend section 1821(a)(1) of title 12, United States Code, to raise the maximum Federal deposit insurance coverage from $100,000 to $200,000. He offered a similar proposal to Financial Services Chairman Barney Frank (MA-04) as an amendment to the financial rescue plan. He is pledging to work with his colleagues to include it in a newer version of the rescue package as a vehicle for compromise.
"This proposal will not only give consumers more protection in this uncertain environment, but it could help garner more votes from my colleagues who were not willing to support the bill that was defeated yesterday. Every day that passes without a plan, more jobs are threatened as sources of personal and business credit dry up," Cohen said. "We need to find areas of common ground and increasing the FDIC insurance is one issue on which Democrats and Republicans can agree."
Cohen continued, “If this measure can bring Democrats and Republicans together to pass a rescue plan, I’ll be particularly proud to have proposed the measure. I sent a letter to both Democrat and Republican leaders this morning urging the adoption of this proposal. Democratic leaders and I have been discussing this issue for over a week, and certainly welcome the support of Republican Leadership and rank-and-file Republicans to ensure it becoming a part of the rescue plan.”
To view the legislation in THOMAS, please visit: https://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.06986:
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Contact:
Marilyn Dillihay, Press Secretary, 202-225-3265
Charlie Gerber, Communications Assistant, 202-225-3265
TEXT OF LEGISLATION
Individual Depositor and Community Bank Protection Act of 2008 (Introduced in House)
HR 6986 IH
110th CONGRESS
2d Session
H. R. 6986
To amend section 1821(a)(1) of title 12, United States Code, to raise the maximum Federal deposit insurance coverage to $200,000.
IN THE HOUSE OF REPRESENTATIVES
September 22, 2008Mr. 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.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.This Act may be cited as the `Individual Depositor and Community Bank Protection Act of 2008'. SEC. 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.
SEC. 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'.
SEC. 4. EFFECTIVE DATE.The amendments made by this Act shall become effective on the date of enactment of this Act.
SEC. 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.
SEC. 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'.
SEC. 4. EFFECTIVE DATE.The amendments made by this Act shall become effective on the date of enactment of this Act.
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'.