Arlington, VA-The American Consumer Institute (ACI) joined a coalition of free market and consumer organizations in strongly opposing proposals to increase the Federal Deposit Insurance Corporation (FDIC) deposit insurance limit for non-interest-bearing transaction accounts. While framed as a stabilization measure, such legislation — including proposals to raise the insurance threshold to $10 million — would impose extraordinary costs on financial institutions and ultimately burden American consumers, taxpayers, and small businesses. Estimates indicate that increasing the limit could require a one-time $42 billion special assessment to recapitalize the Deposit Insurance Fund, creating heightened bailout risk and long-term economic consequences.
The coalition warns that higher insurance limits could result in significant increases to FDIC premiums, translating into higher consumer banking fees, reduced access to credit, and fewer favorable terms for families and small businesses. Further, disproportionately benefiting large corporate account holders would undermine the FDIC’s core mission of protecting ordinary depositors while introducing additional moral hazard into the financial system. ACI urges policymakers and members of the House Financial Services Committee to reject efforts that would shift financial risk to consumers and taxpayers, and to maintain policies that support competitive, affordable, and stable financial markets.
Read the full letter below.
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