Having spent my career in banking, I’ve seen how trust is the foundation of everything we do. That includes banks and customers, regulators and institutions and within our communities. Nothing underscores that trust more than the Deposit Insurance Fund (DIF).

I’ve been reflecting on how we, as an industry, can help ensure that public confidence in the banking system remains strong and unwavering. That brings me to a key focus area I’d like to highlight for the year ahead: supporting the strength, sustainability and transparency of the DIF.

The DIF needs reform.

Key changes we are seeking include:

• A base increase from the existing $250,000 coverage.
• Indexing the increase so the coverage increases automatically with inflation increases. Having to ask Congress for an increase every 10+ years is not efficient.
• An increase in coverage on non-interest-bearing business accounts, providing protection for payroll accounts.
• Authority of the Treasury to invoke a temporary assets guarantee (TAG) for 120 days. This will be much faster than Congress having to approve TAG. TAG calms depositors by ensuring all deposits are protected. The 120-day period gives markets time to adjust and stabilize.
• Having the FDIC explore offering additional insurance to banks that wish to purchase it. This may or may not be appropriate for the FDIC, but it should be explored.
• Having the FDIC study what the costs will be for the industry. Senate Banking Committee Chairman Scott (R-SC) asked the FDIC to provide additional information about the amount of uninsured deposits in the U.S. banking system and the cost to banks should the deposit insurance limit be increased.

There are several legislative proposals regarding deposit insurance reform.

Congresswoman Waters (D-CA) reintroduced H.R. 4551, the “Employee Paycheck and Small Business Protection Act.” This bill would update the deposit insurance framework for business payment accounts to ensure small businesses can bank with community financial institutions and continue to pay their employees, even if their bank or credit union unexpectedly fails. This bill also enhances emergency tools for the FDIC and National Credit Union Administration (NCUA) to use in future crises.

Senator Hagerty (R-TN) filed an amendment that would insure up to $20 million per depositor in the aggregate across noninterest-bearing business accounts. He wanted the amendment to be included in the National Defense Authorization Act, but the amendment was not included. This concept was discussed in the Senate Committee on Banking, Housing and Urban Affairs on Sept. 10. We expect a bill to be introduced that includes increased coverage for non-interest-bearing business accounts.

CBA is committed to advocating for policies that protect the integrity of DIF and increase consumer confidence without placing undue burdens on banks.

Strong banks mean a strong DIF, and a strong DIF means a resilient financial system. Our job as leaders is to ensure that this cycle isn’t broken by short-term thinking or reactive policymaking.

That means advocating not just for today’s solvency, but for sustainability.