Number: RS20724
Title: Federal Deposit and Share Insurance: Proposals for Change
Authors: Walter W. Eubanks, Specialist in Financial Economics 
Abstract: Several Congresses have seen legislation that would change the finances of the Federal Deposit Insurance Corporation (FDIC), the pricing of deposit insurance, and its coverage for customers' accounts. In the 109th Congress, the Federal Deposit Insurance Reform Act of 2005 and the Federal Deposit Insurance Conforming Amendments Act of 2005, P.L. 109-173 (119 Stat. 3601), were enacted on February 15, 2006. Collectively, these laws are referred to as the Reform Act of 2005. In the 110th Congress, the FDIC has been implementing the provisions of the Act. The Act sets the maximum deposit insurance coverage and sets up adjustments that authorize increasing coverage limits for inflation every five years. However, due to current financial crisis and evidence of public lack of confidence in the financial system, the Emergency Economic Stabilization Act (EESA) of 2008, increased the standard deposit insurance coverage from $100,000 to $250,000 and maintained retirement accounts' insurance coverage at $250,000. On December 17, 2008, because of rising bank failures, the FDIC board of directors approved the final rule for implementing a restoration plan to restore the designated reserve ratio to its minimum level by increasing assessments as mandated by the Reform Act of 2005. The proposed rules will take effect on January 1, 2009.
Pages: 6
Date: December 23, 2008