As federal policymakers continue active discussions around potential deposit insurance reform, IBAT recently sent a detailed letter to House Financial Services Committee leadership—including Chairman French Hill and Financial Institutions Subcommittee Chairman Andy Barr—as well as Texas members of the Committee and key executive-branch officials. The letter was intended to ensure IBAT’s position is clearly on the record as these conversations continue to evolve.
In the letter, IBAT outlines a pragmatic, pro-community bank framework aimed at strengthening depositor confidence without shifting disproportionate costs onto community banks serving local Texas markets. The proposal reflects conversations IBAT has held with members, as well as with congressional and executive-branch staff, and emphasizes targeted, workable reforms rather than sweeping or arbitrary increases to deposit insurance limits.
Key elements of the framework include:
- inflation-based adjustments to coverage limits without triggering special assessments on community banks;
- clear authority for the Federal Deposit Insurance Corporation (FDIC) to deploy a temporary TAG-style program during periods of financial stress;
- exemptions for community banks from special assessments tied to systemic risk events;
- and updates to least-cost resolution requirements to ensure uninsured depositors at small and midsize banks are not unfairly penalized.
Taken together, these measured recommendations are intended to help inform ongoing policy discussions as leaders consider next steps on deposit insurance reform.
