There does not seem to be any imminent likelihood of changes to U.S. deposit insurance coverage, FDIC Chairman Martin Gruenberg said.

Gruenberg Remarks: Addressing the International Association of Deposit Insurers, Gruenberg said that while there was considerable interest in reforming deposit insurance coverage policies in the wake of large bank failures earlier this year, that interest has dissipated with time. He noted that any change in deposit insurance coverage would require congressional legislation.

FDIC Report: In the IADI speech and in a separate speech at the 22nd Annual Bank Research Conference, Gruenberg discussed this year’s FDIC report outlining three potential options for deposit insurance reform:

  • Limited Coverage: Maintaining the current deposit insurance framework.

  • Unlimited Coverage: Extending unlimited deposit insurance coverage to all depositors.

  • Targeted Coverage: Offering different deposit insurance limits across account types, with business payment accounts receiving significantly higher coverage than other accounts.

FDIC View: In the report, the FDIC said it believes targeted coverage is the most promising option to improve financial stability relative to its effects on bank risk-taking, bank funding, and broader markets. In a statement on the release of the report earlier this year, Gruenberg said business payment accounts pose greater financial stability concerns than other accounts while posing a lower risk of moral hazard.

Community Bank Differentiation: ICBA has worked to ensure policymakers and the public distinguish community banks from larger and riskier banks since the immediate aftermath of this year’s failures, including through its ICBA National Campaign. Policymakers have responded by targeting new debt and capital proposals to banks over $100 billion in assets while exempting the vast majority of community banks from the FDIC’s proposed special assessment.